Fairbanks Capital, the sub-prime servicer whose aggressive growth landed it in hot water with regulators and asset-backed investors in recent years, is now actively soliciting new business on the back of a recent upgrade from Standard & Poor's. The company is seeking to sign up dealers and investors by convincing them it has new management and controls in place to prevent the over-extension that led to customer complaints and regulatory intervention. "We have been in complete run off for the last 12 months but we're back and open for business," Jim Ozanne, ceo, told BW. The servicer hosted a reception for ABS industry participants in New York last Thursday to update them on its progress and make its case. Ozanne said dealers such as RBS Greenwich Capital, Lehman Brothers and Deutsche Bank have all signaled their willingness to do business with Fairbanks again and now the company has to convince investors. "We have to go about showing that Fairbanks is a new company; we've been through the gauntlet."
One official at a dealer firm said it remains to be seen whether Fairbanks will be successful and that investors have long memories. S&P's downgrade of Fairbanks' servicer rating to below average last year triggered a wave of selling on deals it was involved in and highlighted the growing importance of the servicer's role, particularly in the sub-prime market.
At the meeting with investors and dealers, Matt Hollingsworth, president and chief operating officer, said Fairbanks will pursue only a moderate growth strategy. "We have more people working on fewer accounts than we did a year ago. We will not go out and exponentially grow the business and create the same problems we had in the past," he said.
