Collection ratings cut for 3 lenders
Moody’s Investors Service cut the ratings on the payment-collection abilities of sub-prime mortgage lenders Option One Mortgage of Irvine, Accredited Home Lenders Holdings Co. of San Diego and NovaStar Financial Inc. of Kansas City, Mo.
More than 50 mortgage companies have shut down, scaled back or been sold since the start of 2006 amid rising late payments, lower sales prices for loans considered at the greatest risks of defaults and margin calls from creditors as a result.
Option One’s ratings remained three levels above average, while the other two companies fell to just one level above average. Officials with the three companies didn’t immediately return telephone messages.
Servicer ratings affect how much protection for investors ratings firms require when mortgages are packaged into bonds, and the firms’ later reviews of the bonds’ creditworthiness.