Credit Rating Agency

Moody’s: Five Subprime Servicers Face Ratings Downgrade 

Moody’s Investors Service said late Wednesday that it had placed five of the nation’s largest subprime servicers — Ameriquest, Specialized Loan Servicing, New Century, Accredited, and NovaStar — on review for a possible servicer ratings downgrade. According to a review of past ratings actions at Moody’s, the move likely represents the first time the agency has simultaneously placed several large lenders on a ratings review. Moody’s cited increasing risks to liquidity at each company as the driving factor behind its decision to review the ratings of each servicer. In addition to citing ongoing troubles in the subprime credit sector, the rating agency also acknowledged increasing volatility in the Alt-A mortgage market as well.