Fitch Ratings said this morning that Fremont Investment and Loan's 'RPS4' subprime servicer rating remains on negative watch for a future downgrade amid the possible sale of the company's servicing platform and uncertainty over future portfolio growth (Fremont exited the subprime origination business in March). From the press statement, some insight into what's been taking place at the company's servicing operations:
The company operates redundant servicing sites from Ontario, CA and Irving, TX. Since the prior review, FIL's servicing manager of the Ontario site departed and was replaced by a manager with 14 years of industry experience. The servicing division has continued to refine its servicing platform through operational and technological improvements. To address the rising delinquencies, FIL increased staff in both its sites, particularly in the areas of loss mitigation and default management. A dedicated ARM team was developed to focus on proactive contact with borrowers prior to any ARM re-sets. Additionally, the company outsourced its foreclosure, bankruptcy, and eviction processes and initiated an outsourcing relationship with a CA-based asset management company to manage real estate owned (REO) inventory overflow.
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