The mortgage servicer rating at SunTrust Mortgage Inc. has been downgraded because of potential liability for large servicers that weren’t among the five that already settled.
The downgrade was reported Tuesday by Moody’s Investors Service.
According to the New York-based ratings agency, SunTrust’s servicer quality rating as a primary servicer of prime mortgages was lowered to SQ2 from SQ2+.
Moody’s ratings range from the best possible rating of SQ1+ to the lowest rating of SQ5-.
Moody’s first flagged the rating for a possible downgrade in October 2010 as a result of the irregularities in the servicer’s foreclosure processes.
“Although SunTrust has re-verified and resubmitted pending affidavits and improved their document execution process, Moody’s believes that the attorneys general settlement will likely be expanded to include SunTrust and the full financial and operational impact of the settlement is still unknown,” the statement said.
Other factors prompting the downgrade include deterioration of the company’s collections and timeline performance metrics.
Moody’s noted that further downgrades could follow.
SunTrust serviced 904,609 loans for $158 billion as of Dec. 31, 2011, according to the ratings agency.
