Moody's pushes up PHH

Moody's Ratings said it upgraded PHH Mortgage Corp.'s (PMC) corporate family rating to B3 from Caa1 and affirmed its B2 senior secured debt rating. PMC's outlook was changed to stable from positive.

The CFR upgrade follows PMC's progress towards achieving sustainable profitability, Moody’s said.

PMC’s parent company Ocwen Financial Corp. settled all its legal matters and is now able to acquire new mortgage servicing rights.

“The firm has also grown and expanded its network of capital partners that will enable it to continue to grow its servicing business, particularly its subservicing portfolio. As with other non-bank mortgage finance companies, PMC has experienced profitability headwinds due to the high-interest rate environment, which has depressed mortgage originations. However, PMC has developed a lower cost structure over the last two years, which should allow it to earn solid returns over time,” Moody’s said in a press release.

PMC's stable outlook reflects an expectation that Ocwen will report better earnings and capitalization over the next 12-18 months, Moody’s said.

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