The ability of MetLife Home Loans (MET) to adequately service mortgages tied in Fannie Mae and Freddie Mac bonds is winning plaudits at Fitch Ratings.

A recent review from the credit ratings agency find mortgages collections, loss mitigation, bankruptcy, foreclosure, REO and claims processing operations at MetLife are improving.

Fitch’s long-term issuer default rating for MetLife is A with a stable rating outlook.

“MetLife Home Loans demonstrated the ability to keep delinquent loans cash flowing and to resolve seriously delinquent loans through repayment plans, forbearance plans, and modifications,” Fitch said in a report based on the review of the company’s default performance capabilities.

MetLife declined to comment on the findings.

In April 2011, a consent order with the Federal Reserve and the Office of the Comptroller of the Currency forced MetLife to adhere to certain standards regarding the handling of foreclosures and default management.

Fitch reported that MetLife, which quit the mortgage origination business in January, has increased its collections department staff with permanent employees, shifting away from the temp-to-perm strategy. The company is also expanding its collections supervisors and team leads and terminated a third-party outsourcing relationship that handled about 30% of its inbound collection call volume.

MetLife’s average hold time for incoming collection calls shrunk to 90 seconds during the review period from 128 seconds ing the prior review period, while the average abandonment rate decreased to 5.5% from 11.2%. However, while the trend is improving, call metrics for the current review period are still considered high compared to most other rated servicers.

In fourth quarter of 2010, reports surfaced that MetLife employees were robo-signing mortgage affidavits without knowledge of certain elements in the case, causing longer delayed foreclosures and longer REO timelines. MetLife responded, saying that as part of its practice, "MetLife Home Loans verifies mortgage information included in affidavits filed in foreclosure proceedings and is satisfied that the information is accurate.

In that same quarter, the company implemented new procedures for employees who execute foreclosure affidavits. Since then, MetLife conducted additional training for employees who regularly sign or notarize foreclosure-related documents and enhanced its document execution quality control process to include a formal checklist.

In November 2011, MetLife brought all foreclosure processes back in house. And then in January, it stopped originating mortgages. Discussions between MLHL’s management and Fitch revealed that the former’s mortgage servicing operations would not be impacted by these decisions in the near term, Fitch said.

As of Dec. 31, the MetLife forward mortgage servicing portfolio contained more than 437,000 loans totaling $85.8 billion, including more than 419,000 agency loans totaling $79.8 billion.

At the time of Fitch’s review, MetLife was not servicing any loans in non-agency RMBS transactions.

jhilley@housingwire.com

@JustinHilley