December 7, 2016 – Fitch Ratings-New York: 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 reflect Cenlar’s experienced management team, well developed servicing platform, effective corporate governance structure, platform growth, continued investment in technology, and the financial strength of its parent, Cenlar Capital Corporation (CCC), and the company’s growth.
Cenlar maintains a very effective and experienced management team that averages 30 years’ industry experience. Cenlar’s succession plan seeks to identify next generation candidates, who would be able to step in and take over existing positions as needed. The servicer continued to make enhancements to its systems and processes, which include improvements to its web and telephony systems and increased oversight functionalities.
Cenlar’s operations risk management and quality control program is modeled after Six Sigma quality principles. Cenlar uses a traditional three-lines-of-defense which includes extensive exception reporting, monitoring and self-assessment by the operational areas.
During this review period, the servicer strengthened and improved its operational areas through increased staffing and reporting functionalities. Fitch believes the continued enhancements made by the servicer strengthen its ability to comply with its regulatory servicing obligations while it grows.
Since the last review period, the servicer has grown its servicing portfolio by 71% and increased its full-time equivalents (FTEs) by 69%. The servicer expanded to two new locations in Tempe, AZ in addition to its five locations in Ewing, NJ. As of September 30, 2016, the servicer’s staffing totaled 1,867.
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.
As of Sept. 30, 2016, Cenlar serviced approximately 2.3 million loans totaling $500 billion.
Source: Primary Analyst, Michael Laidlaw, Director +1-212-908-0251; Secondary Analyst, Harper Williams, Committee Chairperson, Roelof Slump, Managing Director +1-212-908-0705; http://www.fitch.com