OneWest Bank FSB hopes to unload a subsidiary that at one time was the second-biggest originator of reverse mortgages.
The Pasadena, Calif.-based company inherited Financial Freedom Senior Funding Corp. when it took over failed IndyMac Bank FSB in July 2008.
The subsidiary, which now operates as Financial Freedom Acquisition LLC, was the second biggest originator of reverse mortgages in 2007 behind Wells Fargo Bank, N.A.
But OneWest decided in 2011 to stop originating reverse mortgages.
Now OneWest is looking to sell the unit’s servicing operations and portfolio, according to Moody’s Investors Service.
The ratings agency announced a downgrade of Financial Freedom’s servicer quality assessment to SQ3 from SQ3+.
Moody’s is concerned about the uncertainty of Financial Freedom’s future.
“Financial Freedom continued to underperform in certain performance metrics related to its call center and assignment pipeline,” the report said. “The reverse mortgage servicer’s abandonment rates and average speeds of answer were poor, averaging over 14 percent and over 160 seconds in the twelve months ended September 2013.”
Financial Freedom serviced 120,488 reverse mortgages for $22.7 billion as of Jan. 31.
Its servicing operations has 309 full-time employees.
