Fitch Affirms Select Portfolio Servicing's U.S. RMBS Servicer Ratings

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed the following U.S. residential primary and special servicer ratings for Select Portfolio Servicing (SPS):

--U.S. Residential primary servicer rating for Alt-A product at 'RPS1-'; Outlook Stable;

--U.S. Residential primary servicer rating for Subprime product at 'RPS1-'; Outlook Stable;

--U.S. Residential primary specialty servicer rating for Closed-End Second Liens product at 'RPS1-'; Outlook Stable;

--U.S. Residential special servicer rating at 'RSS1-'; Outlook Stable.

The servicer rating affirmations and Stable Rating Outlook reflect SPS's experienced senior management team, its strong corporate governance and risk management practices, effective foreclosure processes and its highly customized loan modification approval system. The servicer continues to utilize its proprietary loss mitigation systems in maintaining and improving performance in most products. The ratings also take into consideration the parent's support for funding, mortgage servicing right acquisitions, technology, and staff development and training.

SPS has been servicing residential loans for more than 26 years and RMBS transactions for 15 years. SPS is wholly owned by Credit Suisse Group, AG (Credit Suisse). The servicer does not originate or purchase loans but provides servicing for third parties while acting as a key component of Credit Suisse's residential mortgage conduit. The servicer also acquires special servicing and seasoned portfolios from underperforming servicers.

During the period reviewed by Fitch, SPS increased its third-party arrangements in support of the parent's conduit activities. The conduit delivers primarily jumbo products on a monthly basis, with typical loan size ranging from $500,000 to $1 million. The servicer also indicated that it plans to change its portfolio structure to feature more performing loans and expand its subservicing platform.

The servicer continues to be an effective special servicer with a strong performance history for its loss mitigation and optimal pre-foreclosure sale resolutions. The servicer is capable of identifying and completing targeted solutions based on the customers' ability and willingness to pay as part of its analysis for determining cash flow options.

SPS continues to make enhancements to its regulatory environment. Since March 2014, SPS increased its risk management personnel by 67%, which now includes a total 60 FTEs dedicated to the enterprise risk management processes and controls. The servicer maintains highly developed internal and external audit control processes with oversight by its executive management team and its parent. The servicer indicated that it is under no adverse regulatory actions and was in full compliance with its 2014 Reg. AB requirements.

As of June 30, 2015, SPS primary serviced 419,624 loans totaling $86 billion. The portfolio is broken down by rated products and includes the following: 380,844 subprime loans totaling $76.4 billion; 18,437 Alt-A loans totaling $8.3 billion; 14,633 closed-end second lien loans totaling $516 million and the special servicing portfolio consisted of 33,895 loans totaling $4.8 billion.

The servicer has its main servicing location in Salt Lake City, UT with an additional servicing site in Jacksonville, FL. SPS indicated that it does not offshore any customer contact functions and no single function performed by the servicing platform is completely outsourced.

Fitch will continue to monitor SPS as it diversifies its servicing portfolio while maintaining the requisite controls to remain an effective servicer.

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

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=989563

Endorsement Policy

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

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150817006179/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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