Fitch Ratings-New York-08 March 2019: Fitch Ratings has affirmed the U.S. residential mortgage servicer rating for Cenlar FSB (Cenlar) as follows: –U.S. residential primary servicer rating for prime product at ‘RPS2’; Outlook Stable. The rating affirmations and Stable Outlook take into consideration the ongoing subservicing transfer arrangement with CitiMortgage, Inc. (Citi), changes to Cenlar’s senior management team and the restructuring of its servicing and enterprise-wide risk management operations. Additionally, the assessment considers Cenlar’s continued investments in its systems, facilities, and technology and the support of its parent, Cenlar Capital Corporation (CCC). Cenlar entered into an agreement with Citi to subservice Citi-owned loans and acquire Citi’s government sponsored entities’ mortgage servicing rights (MSRs). The transfers, which began in 2018, are expected to be completed in late 2019 and will include ongoing flow servicing for Citiowned originated loans. During this review period, Cenlar added several externally recruited members to its senior management team; the new management team is experienced and has worked in executive/senior management capacities within the mortgage industry and are expected to enhance Cenlar’ servicing capabilities. In addition, Cenlar made several operational changes to better align resources within similar responsibilities. The changes facilitated increased efficiency and streamlined existing processes across compliance, risk management, borrower operations and technology. The servicer maintains a robust risk and control self-assessment framework and has a highly developed corporate governance program. Cenlar employs 2,260 full time equivalents (FTEs), which represent a 5% increase in staffing from one year ago. The servicer effectively incorporated and trained a selected group of former Citi’s FTEs into its operation whose services were transitioned to Cenlar as part of the subservicing agreement. As of Dec. 31, 2018, Cenlar serviced approximately 2.4 million loans totaling $557.34 billion. This is further broken down as 2.1 million agency loans totaling $441.1 billion; approximately 325,000 loans serviced for others totaling $103.6 billion; approximately 17,000 non-agency RMBS loans totaling $9.2 billion and 950 owned loans totaling $413.6 million. Cenlar, an operating subsidiary of CCC, is a privately held (employee-owned), federally chartered savings bank. Fitch does not rate the credit or financial strength of Cenlar or its parent CCC. However, Fitch’s financial institutions group reviewed Cenlar’s financial statements to provide an internal assessment, as a company’s financial condition is a component of Fitch’s servicer rating analysis. 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 “Criteria for Rating U.S. and Canadian Residential and Small Balance Commercial Mortgage Servicers” dated February 2017, which is available at ‘www.fitchratings.com‘. Contact: Primary Analyst Michael Laidlaw Director +1-212-908-0251 Fitch Ratings, Inc. 33 Whitehall Street New York, NY 10004
Secondary Analyst Sean Carroll Analyst +1-646-582-4758
Committee Chairperson Roelof Slump Managing Director +1-212-908-0705
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