Ocwen Loan Servicing (OCN) quickly expanded its mortgage servicing platform over the course of the past few months, but Fitch Ratings is concerned the company may have grown too quickly, prompting it to hold the company's servicer ratings on negative watch.

"Fitch believes the outsized scale of Ocwen's rapidly growing portfolio relative to the subprime industry and its offshore staffing strategy may pose challenges to an orderly transfer of servicing from Ocwen if a transfer were necessary at some point in the future," the ratings giant wrote. "The risk of a servicing disruption will be considered in the high-stress and low-probability scenarios used to analyze the ratings of high-investment grade bonds."

The report from Fitch comes soon after Ocwen and Walter Investment Management Corp. secured the winning bid for the Residential Capital mortgage servicing portfolio. ResCap, which was put into bankruptcy by Ally Financial, ended up at the center of a bankruptcy bidding war in which firms were competing for mortgage servicing rights. Ocwen and Walter Investment Management won, but the quick expansion may pressure the company's servicing quality, Fitch suggested.

Ocwen's platform also is dealing with new assets stemming from Ocwen's acquisition of Homeward Residential, which is expected to increase Ocwen's portfolio by 60% by the end of this year.

Fitch said it remains concerned about portfolio integration as loans move onto a new system and default management platform.

"[T]he additional time required for management involvement in planning and execution of the transfer while integrating the Homeward platform, and the aggregation of additional subprime loans on the Ocwen platform requiring immediate high-touch efforts," Fitch said.

Ocwen's primary servicer rating for its subprime product is currently at RPS3, which is a stable rating for a servicer. But it's just one notch above a ratings level where servicers are considered to be lacking in proficiency.