MetLife Mortgage Service Is Worse Than Peers, Moody’s Says

MetLife Inc. (MET), the U.S. life insurer expanding its mortgage business, had the servicer-quality rating on its home-loan business cut by Moody’s Investors Service.

“The rating downgrade is mainly due to deterioration in call-center metrics for the customer-service department, indicating an insufficiently staffed customer-service call center,” Moody’s said today in a statement. “Abandonment rates in 2010 reached 30 percent for customer service, performance levels that are significantly worse than its peers.”

MetLife is adding to its lending and mortgage-servicing businesses as near-record low interest rates pressure returns on insurance sales. New York-based MetLife, the biggest U.S. life insurer, uses television ads to sell so-called reverse mortgages to older homeowners. In June, the company agreed to supply KB Home with loans for first-time buyers.

MetLife’s servicer-quality rating was cut to SQ3+ from SQ2- by Moody’s. The rating firm said it also withdrew the grade at MetLife’s request.

“MetLife Bank consistently has received high servicing quality ratings from the Department of Housing and Urban Development and Freddie Mac,” said David Hammarstrom, a MetLife spokesman, in an e-mailed statement. “MetLife Home Loans had been rated by Moody’s because it had sub-serviced private label mortgage backed securities on behalf of First Tennessee Bank, N.A. Given that we are no longer sub-servicing these securities, we requested that Moody’s withdraw its rating.”

To contact the reporter on this story: Andrew Frye in New York at afrye@bloomberg.net;

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net.

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