Fitch Affirms Ocwen's Resi and Special Servicer Ratings

NEW YORK - Fitch Ratings affirms Ocwen Financial Corporation's RPS2 residential primary servicer rating for subprime mortgages and its RSS2 residential special servicer rating. The ratings are based on Ocwen's capabilities in loan administration and default management, servicing technology, established training programs, and effectiveness in servicing nonperforming loans and liquidating real estate owned assets.

As of Sept. 30, 2006, Ocwen serviced over 445,000 loans totaling $50 billion, an increase of 36.5 percent in loan count and 38.9 percent in unpaid principal balance from 326,000 loans totaling $36 billion as of June 30, 2005. The portfolio is comprised of $39.5 billion of subprime loans, with the balance consisting of conforming, Alt-A, FHA/VA and high loan-to-value loans. Ocwen currently has four servicing sites located in West Palm Beach and Orlando, FL, and Bangalore and Mumbai, India.

Since Fitch's prior review, Ocwen reconfigured its Interactive Voice Response (IVR) unit to provide more customer self-fulfillment options, including full Spanish functionality, the ability to make payments by phone, and request payoff quotes for loans that are less than 59 days delinquent; enhanced call routing and prioritization for incoming calls; and created a specialized group to focus on early payment defaults using manual calling campaigns and a door knocker service in cases where the company is unable to contact the borrowers. Ocwen continues to develop its interactive agent scripting for customer service and collections calls. In addition, Ocwen set up a dedicated disaster recovery site in India and completed initial application recovery testing for servicing related systems with no significant issues noted.

Ocwen continues its efforts to resolve its outstanding litigation. To date, the company has been successful in resolving some of the lawsuits and continues to work to have the remaining cases dismissed, consolidated, or moved to more favorable venues. Fitch takes these charges very seriously and will continue to monitor the company's legal situation in order to evaluate any potential impact on Ocwen's loan servicing and operational capabilities. If at any time Fitch determines that Ocwen no longer meets the requirements of a servicer at its current rating level, Fitch will take immediate and definitive action with regard to Ocwen's servicer ratings.

Fitch rates residential mortgage primary, master, and special servicers on a scale of one to five, with one being the highest rating. Within some of these rating levels, Fitch further differentiates ratings by plus (+) and minus (-) as well as the flat rating.

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