Fitch upgrades Ocwen to B+

Fitch Ratings said it upgraded Ocwen Financial Corp.'s long-term issuer default rating to B+ from B, affirmed the short-term rating at B and changed the outlook to stable from positive.

The agency said the upgrade reflects Ocwen's stabilized core operating performance and ability to maintain market share amid competing "in-house" servicers. In addition, Fitch recognized the company's strong loss mitigation capabilities in the subprime arena and significant cost advantages provided by off-shoring and technology.

Nonetheless, developing legislative and regulatory scrutiny of subprime mortgage lending could negatively affect Ocwen's business, and Fitch said Ocwen's ratings remain constrained by its heavy customer concentration and lack of contractually obligated revenue.

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