U.S. money manager takes aim at subprime servicer

A money manager owned by Canada's Manulife Financial Corp is seeking to fire one of the largest subprime mortgage companies in the United States, claiming that Carrington Mortgage Services is unfairly tarnishing some bonds.

Declaration Management & Research, which manages $12 billion, is trying to rally other investors to help it take on Carrington, which it claims has failed to manage loans to provide the best possible returns for all bondholders.

Carrington appears to favor practices that steer payments to the riskiest parts of bonds, some of which it may own, according to analysts.