Moody's Investors Service downgraded the mortgage servicer rating of JPMorgan Chase (JPM) and Chase Home Financing. Analysts said continued deterioration of JPMorgan's mortgage collections metrics is largely responsible for the downgrade. Additionally, ongoing problems with foreclosures and operational challenges due to changes from Dodd-Frank financial reform also contributed to the downgrade. Moody's rates mortgage servicers' ability to prevent or mitigate asset pool losses as markets move on a scale of SQ1 to SQ5, with the latter being the weakest. Analysts assess the effectiveness of a servicer's collection efforts by analyzing delinquency roll rates, according to Moody's. The ratings for JPMorgan Chase's prime and subprime residential mortgage loans fell to SQ2 from SQ1 and remain on review for additional downgrades, because of "deficiencies in Chase's foreclosure process." Moody's lowered Chase's collections assessments to above average from strong. As of March 31, Chase's servicing portfolio included about 8.3 million mortgages with an unpaid principal balance of $1.19 trillion, according to Moody's. The ratings also reflect analysts' estimates of the impact servicing will have on the on-going credit performance of the portfolio. In early May, Moody's lowered the servicer ratings of Bank of America (BAC) for similar deterioration of the metrics of the bank's mortgage portfolio, which about $2.09 trillion. In June, Fitch Ratings downgraded nine mortgage servicers because of tougher regulations and the lack of urgency these companies displayed in response to the foreclosure crisis. Write to Jason Philyaw. Follow him on Twitter @jrphilyaw.