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' parent company relationship, industry experience, its strong management and infrastructure, and its enhanced corporate governance structure and procedures.

SPS has been servicing residential loans for more than 27 years and RMBS transactions for 16 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.

SPS continues to acquire severely delinquent accounts, with limited or no customer contact from the previous servicers, but is able to maintain high loan resolution rates. The servicer maintains low accounts per employee in its primary collections and loss mitigation functions while continuing to achieve high customer contact and pre-foreclosure cure rates.

The servicer also continues its commitment to compliance, customer service and customer contact effectiveness of its core performance indicators across the servicing platform. In addition, SPS is currently diversifying its servicing platform to feature more performing and agency loans and subservicing transactions. SPS has indicated that over 60% of its portfolio is performing and the remaining portfolio consists primarily of high risk-loans requiring high-touch loss mitigation care. The servicer maintains a highly experienced senior management team averaging over 22 years of industry and 12 years of company tenure. No single-servicing function is 100% outsourced, and SPS does not offshore any customer-facing functions or responsibilities.

For this review period the servicer completed enhancements to its loss mitigation portal that allows mortgagors who are working with SPS on loss mitigation options to upload documents and to review detailed information about the current status of their application online, 24 hours a day.

The servicer also completed several enhancements to its telephony system that included co-browsing features to facilitate the call center associates to provide real time assistance to mortgagors who are completing items online. SPS also enhanced its call recording system that produced analytics that have been utilized for process improvements, training opportunities, enhanced customer experience, and improved portfolio performance.

The enhancements have led to material improvements in both customer service and collections average speed to answer (ASA) and abandonment rate metrics. In customer service, ASA improved to 8.97 seconds from 15.08 seconds with abandonment rate of .42% from .72%. Collections' ASA improved to 10.85 seconds from 14.10 seconds, and abandonment rate improved to 0.56% from 0.67%. These are among the best call center metrics among Fitch-rated servicers.

As of March 31, 2016, SPS primary serviced 409,247 loans totaling approximately $84 billion. The portfolio is broken down by rated products and includes the following: 373,363 subprime loans totaling $75.5 billion; 16,439 Alt-A loans totaling $7.1 billion; 14,313 closed-end second lien loans totaling $521 million and the special servicing portfolio consisted of 31,782 loans totaling $4.5 billion.

The servicer has its main servicing location in Salt Lake City, UT with an additional servicing site in Jacksonville, FL. During this review period the servicer successfully relocated its Salt Lake City headquarters and operations from five existing buildings into one building, which is located approximately four miles west of the previous campus, in Salt Lake City. Fitch will continue to monitor SPS' performance as it pursues its diversification strategy.

Fitch rates residential mortgage primary, master, and special servicers on a scale of 1 to 5, with 1 being the highest rating. Within some of these rating levels, Fitch further differentiates ratings by plus (+) and minus (-) as well as the flat rating. For more information on Fitch's residential servicer rating program, please see Fitch's report 'Rating U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria', dated April 23, 2015, which is available at 'www.fitchratings.com'.

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

Applicable Criteria

Rating Criteria for Structured Finance Servicers (pub. 01 Jul 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=884140

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=1009424

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/20160725005821/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
Thomas Crowe
Senior Director
+1-212-908-0227
or
Media Relations
Sandro Scenga, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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