Standard & Poor’s Rating Services announced today that it has changed its outlook on the rankings of Nationstar Mortgage LLC.
S&P changed Nationstar’s rating as a residential mortgage primary, subprime and special loan servicer to “Developing,” largely as a result of its recent buy-up of mortgage servicing rights—including reverse mortgage servicing rights.
Previous outlooks on the company, as S&P notes, had been “Positive” for subprime and “Stable” for primary and special servicing.
Nationstar’s current rankings are “Above Average” for its primary and subprime servicing and “Average” for special loan servicing.
S&P’s outlook change to Developing reflects Nationstar’s announcement of the purchase of $215 billion in mortgage servicing rights from Bank of America in January.
The multi-billion dollar purchase represents approximately 1.3 million loans, writes S&P, with 47% of this servicing portfolio consisting of government-sponsored enterprise (GSE) and other government agency loans.
Consequently, the addition of these loans will increase the size of Nationstar’s portfolio by over 100%, writes S&P.
In the past two years, Nationstar has made a name for itself in the reverse mortgage servicing sector as it purchased both MetLife’s servicing rights, as well as $18 billion worth in rights to Bank of America’s reverse portfolio in December 2011.
Nationstar’s current servicing portfolio includes more than 1.8 million residential loans, amassing more than $300 billion in unpaid principal balance as of 2013.
Written by Jason Oliva