New Century's Servicer Ratings Affirmed
Moody's Investors Service announced that it has affirmed New Century Mortgage Corporation's rating of SQ3+ as a primary servicer of subprime residential mortgage loans. In a statement, the rating agency noted the New Century displayed average collection abilities, average loss mitigation results, above average foreclosure and real estate owned (REO) timeline management and average servicing stability. New Century, a wholly-owned subsidiary of New Century Financial Corporation, is a mortgage finance company engaged in the business of originating, purchasing, and servicing mortgage loans secured primarily by first and second mortgages. The company's servicing operations are based in Santa Ana, California. Moody's said that New Century has diversified its servicing portfolio through the acquisition of the prime and Alt-A platforms from the Royal Bank of Canada and expects to grow this portfolio in 2007. The servicing portfolio totaled 234,512 loans with an unpaid balance of approximately $43 billion as of November 30, 2006. Moody's highlighted New Century's solid ability to service delinquent loans that have less than two years of seasoning, and noted that the company has continued to make enhancements to its operations, such as increasing the scope of its foreclosure committee to review all loans as they enter the foreclosure process. The company has also implemented technology to better manage the REO process, according to the agency review. In addition, Moody's said New Century has entered into an agreement to acquire a redundant servicing site in Fishers, Indiana. Operations are scheduled to begin in February 2007. A redundant site may provide benefits such as access to additional labor pools, better disaster recovery preparedness, and easier coverage of a full range of call center hours as they are in different time zones. Moody's SQ ratings range from SQ1 (strong) to SQ5 (weak). Where appropriate, a "+" or "-" modifier will be appended to the relevant rating to indicate a servicer's relative servicing quality within a particular category.