Even with the Federal Deposit Insurance Corporation (FDIC) as conservator, Fitch Ratings announced last week that they downgraded Financial Freedom’s residential primary specialty-reverse mortgage servicer rating to RPS5. As a result of the servicer being downgraded to the lowest rating, it has been removed from Rating Watch Negative where it was originally placed on May 20, 2008.
The uncertain future of Financial Freedom’s parent company IndyMac is hurting the the company with other rating agencies like Standard & Poor’s and Moody’s as well. Both companies recently downgraded FF’s servicer rating.
What I find interesting is the downgrades come after the FDIC has stated it will invest in the servicing operations to maintain the value of the platform which is expected to be sold in the near future. The million dollar question which no one seems to have an answer for is, who is going to buy it?