Fitch Ratings upgraded its ratings and outlook on Homeward Residential as a mortgage servicer to positive while still holding a negative outlook on the nation’s overall mortgage servicer ratings sector, a position it’s held since November 2010.

In February, American Home Mortgage Servicing Inc. changed its name to Homeward Residential to reflect the company's entrance into the correspondent and warehouse lending markets.

The upgrade to Homeward’s subprime servicer rating and the positive outlook placed on all ratings reflects improvements in its governance and compliance structure, significant additions to its executive and senior management positions, and material changes to its default programs, which include the introduction of a single point of contact program.

Fitch said Homeward's subprime servicing performance is consistent with that of its other servicing product areas.

Homeward made changes to functions performed at offshore operations, shifting its specialized loss mitigation responsibilities from its captive site in India to domestic operations. And it also implemented increased risk management and internal control processes and procedures, continued material investments in infrastructure and technological enhancements, and increased training, staff development and retention programs throughout the servicing platform.

As of Dec. 31, Homeward serviced 374,827 loans totaling $70.7 billion — or 55,860 prime loans totaling $10.8 billion, 127,463 Alt-A loans totaling $30 billion, 148,558 subprime loans totaling $24.3 billion, 11,899 second lien products totaling $495.8 million and 31,044 agency loans totaling $5.06 billion.

The portfolio contained 13,691 special serviced loans totaling $3.05 million.

“Homeward continues to expand its servicing platform through mortgage servicing rights acquisitions and indicated that they will also be utilizing their origination platform and seeking subservicing and special servicing opportunities,” Fitch noted.

Fitch's negative outlook on the nation’s residential mortgage servicer ratings sector is a result of increased concerns surrounding alleged procedural defects in the judicial foreclosure process.

Click on the image below for Fitch's ratings actions toward Homeward Residential: