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 Outlook Stable reflect CMC's experienced and highly tenured management, competitive performance metrics and continued financial support from its parent. In addition, the servicer completed various enhancements to its overall internal control processes as evidenced by the corporate governance, reporting and technological changes that began since early 2013. The servicer also indicated that it had no adverse external audit or examination findings or deficiencies related to its foreclosure processes, Regulation AB or USAP reporting requirements for the period under review.
The servicer completed various organizational and structural realignments to strengthen its enterprise-wide reporting structure, to include independent testing and oversight covering continuous monthly, quarterly, and annual testing, with direct reporting to senior and executive management teams and subsequently its board of directors. The servicer hired a senior vice president, director of mortgage compliance, to coordinate its enterprise-wide mortgage servicing quality control and compliance efforts. CMC also created three servicing compliance coordinator positions with responsibilities for monitoring all legal requirements and regulations related to mortgage servicing. The coordinators have extensive background in quality control and default mortgage servicing.
Since Fitch's last review, the servicer experienced material improvements in its customer call metrics, which saw its customer service average speed to answer reduced to 16 seconds from 75 seconds and abandonment rate improved to .77% from 3.67%. While its collections calls average hold time decreased to 28 seconds from 39 seconds and abandonment rate reduced to 2.51% from 3.36%. The servicer indicated that the improvements were attributable to stronger line management, its enhanced telephony system and changes made to its staffing model. The servicer also made structural improvements to its management oversight of customer correspondence and the single point of contact areas. Fitch believes that the changes will benefit the company in maintaining a high performance standard.
The ratings also 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 reflect Fitch's overall concerns for the U.S. residential servicing industry. Chief among
them is the ability to maintain high performance standards while addressing the rising cost of servicing and changes to industry practices, 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. The servicer indicated that it generally does not service loans originated by its sister company, AMC or its parent, ABG.
As of March 31, 2014, CMC serviced 170,489 loans totaling $32.02 Billion. This represents a reduction from 195,257 loans that totaled $38.5 billion as of March 31, 2013. The current portfolio includes 7,340 prime loans totaling $2.15 billion and 7,505 Alt-A loans totaling $1.8 billion. CMC does not currently perform any third-party special servicing but is subservicing 12,156 loans totaling $2.6 billion and has maintained the capacity to perform these functions.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Rating Criteria for Structured Finance Servicers', Jan. 30, 2014;
--'Rating U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria', dated Jan. 31, 2014.
Applicable Criteria and Related Research:
Rating Criteria for US Residential and Small Balance Commercial Mortgage Servicers
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=731747
Rating Criteria for Structured Finance Servicers
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=731750
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=831507
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