Moody's Investors Service on Thursday downgraded the servicer quality ratings of two JPMorgan Chase & Co. units, citing deterioration in their collections and foreclosure processes and "operational challenges" due to the current regulatory environment.
The servicer quality ratings of JPMorgan Chase Bank and Chase Home Finance LLC were each downgraded one notch to an "above average" rating from their previous "strong" rating. Moody's also put both units on review for possible further downgrades due to deficiencies in Chase's foreclosure process and the deterioration of certain metrics relative to its peers.
In September, Moody's placed all of JPMorgan's servicing ratings on review. Chase's servicing portfolio totals 8.3 million loans with an unpaid principal balance of $1.19 trillion.
A JPMorgan Chase spokesman declined to comment.
Servicer quality ratings are generally commissioned by the servicers themselves. Even with recent downgrades, the top three ratings agencies, including Fitch Inc. and Standard & Poor's, still consider the top servicers to have demonstrated high performance despite consent orders by federal regulators that indicate otherwise.
