Fitch Affirms EverBank's Servicer Rating; Outlook Stable

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has taken the following rating action on the U.S. residential mortgage servicer rating of EverBank FSA dba Everhome Mortgage (EverBank):

--Residential primary servicer rating for Prime product affirmed at 'RPS3'; Outlook Stable.

EverBank is a subsidiary of EverBank Financial Corp and is a diversified financial services company, based in Jacksonville, FL, providing banking, mortgages and investment services. EverBank originates prime residential mortgage loans and focuses on jumbo prime mortgages that it retains on its balance sheet.

The servicer rating affirmation and Stable Rating Outlook take into consideration EverBank's enterprise-wide corporate governance practices, its experienced management team, increased automation and rebranding programs, and its recently established corporate growth strategies. Fitch believes that the company has effectively realigned itself with a strategic focus on servicing performing loans while retaining the basic levels of default management to adequately perform its functions. The rating action also reflects the platform changes and the servicer's proficiency in executing its realigned servicing responsibilities.

EverBank continues to transition its servicing platform to develop a primarily performing, high-quality agency and private banking portfolio, while concentrating on expanding its core banking relationships through the origination and servicing of prime jumbo mortgages to its banking clients. The servicer effectively reduced its non-performing loan (NPL) and real estate owned (REO) portfolios through the sale of over 152,000 loans valued at $9.8 billion to Green Tree Servicing, LLC (Green Tree) and has another 50,000 loans valued at $6.5 billion to be transferred to Nationstar Mortgage, LLC, pending investor approvals, during the third quarter of 2015.

As of June 30, 2015, EverBank's overall delinquency rate was 5.12%, as compared to 11.53% prior to the transfer to Green Tree. The servicer indicated that it would retain default management capabilities by merging the remainder of the default operations into the asset management group, and expand its single point of contact (SPOC) approach.

The servicer indicated that the sales include both residential and commercial loans, which incorporates all of its non-strategic business relationships. EverBank will be focusing on customers who have developed banking relationships that include other non-mortgage-related arrangements with the bank. In addition, the company indicated that it intends to build its private banking-client relationships and expand its jumbo prime lending and loan retention programs. EverBank has exited the wholesale origination market and expanded its HELOC and jumbo hybrid-ARM and fixed-rate products while expanding its retail and correspondent lending programs.

The servicer continues to make changes to its risk management controls as it works to comply with a heightened regulatory environment. During the period under review, EverBank redesigned its enterprise-wide risk management group into four segments: consumer-facing, commercial, financial oversight. and information technology, to further enhance coverage and oversight of all risk throughout the organization. EverBank completed its Reg AB report for the period ended Dec. 31, 2014, with no material non-compliance issues.

Fitch believes that the realignment within the default management department and the sale and transfer of the non-performing loans will materially improve the servicer's delinquency performance. Fitch will continue to monitor the servicer's effectiveness in recruiting and retaining experienced personnel needed to perform all servicing functions..

EverBank, headquartered in Jacksonville, FL, has been servicing residential mortgage loans for over 53 years through predecessor name changes and acquired companies. Prior to rebranding as EverBank in 2004, the company had acquired or joint-ventured to form various mortgage and/or banking operations. In 2007, EverBank acquired mortgage servicing assets from NetBank and in 2010, acquired the banking operations of Bank of Florida. As of June 30, 2015, EverBank was servicing 256,315 residential mortgage loans totaling $44.8 billion. This included approximately 195,876 agency loans totaling $29.7 billion, 9,689 non-agency RMBS prime loans totaling $2.3 billion, and 50,750 owned and third-part services loans totaling $12.6 billion

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Rating Criteria for Structured Finance Servicers', April, 2015

--'Rating U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria' (April 2015).

Applicable Criteria

Rating Criteria for Structured Finance Servicers (pub. 23 Apr 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864375

Rating Criteria for U.S. Residential and Small Balance Commercial Mortgage Servicers (pub. 23 Apr 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864368

Additional Disclosures

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=989562

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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View source version on businesswire.com: http://www.businesswire.com/news/home/20150817006109/en/

Fitch Ratings
Primary Analyst
Michael Laidlaw
Director
+1-212-908-0251
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
or
Secondary Analyst
Roelof Slump
Managing Director
+1-212-908-0705
or
Committee Chairperson
Grant Bailey
Managing Director
+1-212-908-0544
or
Media Relations:
Sandro Scenga, New York, +1 212-908-0278
Email: [email protected]

Source: Fitch Ratings

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