The U.S. servicing unit of Barclays Bank plc saw its servicer rating cut because of deterioration in modification efforts.
Moody’s Investors Service announced today the downgrade of Barclays Capital Real Estate Inc.’s subprime primary servicer quality rating to SQ2+ from SQ1-.
Servicer ratings range from a high of SQ1+ to a low of SQ5-.
Barclays Capital, which does business as HomEq Servicing, is an indirect subsidiary of London-based Barclays Bank PLC.
Barclay’s subprime servicing portfolio ended July at 211,712 loans for $33.1 billion. Most of the loans were acquired through third-party servicing relationships.
The ratings agency cited a lower assessment of Barclay’s loss mitigation.
“Moody’s observed some deterioration in the loss mitigation loan level analysis relative to peers, most noticeably in modification and other workout efforts on highly delinquent loans throughout the observation period,” the statement said.
But at the same time, re-defaults on Barclays’ modifications recently appear to be lower than for the rest of the industry.
The servicer operates centers in Boone, N.C.; Raleigh, N.C.; and Sacramento, Calif.
