NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed the following U.S. residential mortgage primary servicer ratings for Central Mortgage Company (CMC):
--Primary servicer rating for prime product at 'RPS2+'; Outlook Stable;
--Primary servicer rating for Alt-A product at 'RPS2+'; Outlook Stable;
--Special servicer rating at 'RSS2+'; Outlook Stable.
The rating affirmations and Stable Outlook reflect CMC's continued efforts in establishing controls to conform to the ongoing regulatory and compliance changes. The servicer hired additional compliance coordinators to cover all legal and regulatory matters related to mortgage servicing. CMC also completed various organizational and structural realignments to strengthen the enterprise-wide reporting and oversight functionalities. In addition, CMC completed various promotions and terminations within its group managers that align with the servicer's succession planning and employee retention policies. CMC also increased its classroom-training program with the addition of 18 new classes for the period under review.
The servicer introduced an enhanced telephony system and strengthened its management oversight of the call center operations, by realigning associates by teams with the team lead responsible for mentoring and training of new members. Due to these changes the servicer experienced deterioration in its average customer service hold time. However, CMC provided a trending report that indicated the average hold time being reduced to 30 seconds from its high of 78 seconds and the abandonment rate improving to 1.3% from 3.67%. The servicer also made various enhancements to its primary operating default management system, imaging, and increased its website functionalities. Fitch believes that these are positive changes that are likely to benefit the company in maintaining its performance standards.
In addition, the ratings take into consideration the financial condition of CMC and its parent, both non-rated entities, as financial condition is a component of Fitch's servicer ratings. Finally, the ratings also reflect Fitch's overall concerns for the U.S. residential servicing industry. These include the ability to maintain high performance standards while addressing the rising cost of servicing and changes to industry practices, which is likely to be mandated by regulators and other parties.
CMC is headquartered in Little Rock, AR and is a wholly owned subsidiary of Arvest Bank of Fayetteville, AR and an indirectly owned subsidiary of Arvest Bank Group, Inc., a bank holding company. The corporation also owns Arvest Mortgage Company (AMC). CMC is solely engaged in servicing loans through acquisition of mortgage servicing rights and through subservicing arrangements. CMC does not service loans originated by its sister company, AMC.
As of March 31, 2013, CMC serviced 195,257 loans totaling $38.5 billion, an increase from 172,052 loans that totaled $33.02 billion as of March 31, 2012. The current portfolio includes 8,343 prime loans totaling $2.54 billion and 8,610 Alt-A loans totaling $2.1 billion. CMC does not currently perform any third-party special servicing but is subservicing more than 47,965 loans totaling $11.2 billion. Fitch will continue to monitor CMC's ability to manage its growth while maintaining performance in a changing mortgage servicing environment.
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 Jan. 31, 2011, which is available on the Fitch Ratings website at 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Rating Criteria for Structured Finance Servicers', Aug. 13, 2010;
--'Rating U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria', dated Jan. 31, 2011.
Applicable Criteria and Related Research:
Rating Criteria for Structured Finance Servicers
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=699690
U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=600065
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=796274
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.