NEW DELHI & SYDNEY, Australia & SINGAPORE - (Business Wire) Fitch Ratings takes the following actions on Carrington Mortgage Services, LLC's (CMS) U.S. residential servicer ratings:
--The residential primary servicer rating for subprime product upgraded to 'RPS3-' from 'RPS4';
--The residential special servicer rating assigned at 'RSS3-'.
The recommended rating actions reflect CMS' effective loan administration processes, improved control environment and focused default management practices. The special servicer rating is based on CMS' established processes for managing and liquidating non-performing loans and real estate owned (REO) assets.
In March 2007, Carrington Capital Management, LLC (CCM) established CMS to act as its servicer, and in May 2007, CMS bid on and won the right to acquire the New Century servicing platform after the company declared bankruptcy. CMS operates its primary servicing platform from Santa Ana, California with a secondary redundant site in Fishers, Indiana. As of June 30, 2008, CMS serviced a portfolio of over 86,400 loans with an outstanding principal balance in excess of $16 billion. The portfolio comprises over 93% subprime and 7% second lien product by loan volume. The company's strategic initiatives include the development of third-party special servicing relationships.
As of the Fitch review, CMS had completed the stabilization and integration of the New Century servicing platform. Since the prior review the company established an internal audit program, hiring a new Vice President of Internal Audit, and completed audits for four major servicing functions. Additionally, the company completed re-writing its policies and procedures and created full redundancy of all critical systems between the Santa Ana and Fishers sites. However, CMS experienced slightly higher than average turnover rates for some areas of servicing.
Fitch believes that CMS maintains a scalable servicing platform with an experienced management team, adequate technology, focused procedures, and controls in place to support its current servicing portfolio. Fitch will continue to closely monitor CMS' ability to maintain portfolio and operational performance, and attract and retain servicing staff in a high delinquency 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 Mortgage Servicers', dated Nov. 29, 2006, which is available on the Fitch Ratings web site at www.fitchratings.com.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 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 Ratings, New York
Stephanie Whited, 562-481-1368
Mary Kelsch, 212-908-0563
or
Media Relations:
Sandro Scenga, 212-908-0278
Email: sandro.scenga@fitchratings.com
