Fitch Affirms Selene Finance LP's U.S. RMBS Servicer Ratings

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed the U.S. residential mortgage servicer ratings for Selene Finance LP (Selene) with a Stable Outlook as follows:

--U.S. residential primary servicer rating for subprime product at 'RPS3+';

--U.S. residential primary servicer rating for prime product at 'RPS3+';

--Special servicer rating at 'RSS3+'.

The rating affirmations and Stable Outlook are based on the effectiveness of Selene's platform, its strength as a high touch servicer and its strong leadership. Additionally, the company maintains effective proprietary technology systems. The ratings also take into consideration Selene's developing internal risk management framework.

During the review period the servicer transitioned to a new CEO, Joe Pensabene, and added other new executive leadership including EVP's of special servicing and business development. The executive team members possess over 25 years of industry knowledge and experience. Fitch is familiar with the new members as they have held senior management positions at other Fitch rated servicers. Since Mr. Pensabene's arrival, significant enhancements have been implemented throughout the servicing platform to aid in overall efficiencies, with a strategy of growing the business while expanding existing relationships.

Additionally, Selene has implemented its internal audit program utilizing a third party vendor. In general, transitions to robust internal audit processes can lead to an initial increase in audit findings, but establishment of a viable internal audit program is expected to ultimately be beneficial to the company.

Furthermore, the ratings take into consideration the financial condition of Selene, a non-Fitch rated entity, as financial condition is a component of Fitch's servicer ratings.

Selene is owned by Selene Ventures LLC (99% limited partner) and Selene Ventures GP LLC (1% general partner). Selene Holdings LLC is the parent company. Selene's servicing operations are located in Houston, TX, Horsham, PA and Jacksonville, FL.

As of March 31, 2016, Selene serviced over 63,000 loans with an unpaid principal balance (UPB) of $9.4 billion. Selene's portfolio by UPB comprised 46% government-sponsored enterprise (GSE), 40% subprime, 12% prime, and 2% other.

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 on the Fitch Ratings web site at 'www.fitchratings.com'.

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

Applicable Criteria

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

Related Research

U.S. RMBS Servicer Handbook (Servicing At A Glance)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=872614

Additional Disclosures

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1007757

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/20160620006410/en/

Fitch Ratings, Inc.
Primary Analyst
Natasha Aikins
Director
+1-212-908-0272
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Thomas Crowe
Senior Director
+1-212-908-0227
or
Committee Chairperson
Roelof Slump
Managing Director
+1-212-908-0705
or
Meida Relations
Sandro Scenga, +1-212-908-0278
[email protected]

Source: Fitch Ratings

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