“CHARLOTTE, North Carolina (Reuters) – Bank of America Corp’s (BAC.N) mortgage servicer quality ratings were downgraded by Moody’s (MCO.N) on Tuesday, because of a deterioration in the company’s collections and loss mitigation on home loans.
The credit rating agency said it downgraded both BAC Home Loans Servicing LP and Bank of America, N.A. to SQ2 from SQ1 as a primary and special servicer for both first and second lien mortgages.
Moody’s action moves BofA down one notch from the highest rating on a five-step scale used by the ratings agency for mortgage servicing. Moody’s also said it would maintain a review for possible future ratings cuts, except as a primary servicer of second lien mortgages.
A BofA spokesman Dan Frahm said the downgrade was not a surprise, and the cuts reflected a recent settlement with bank regulators over problems with the industry’s foreclosure practices.”
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