Credit Suisse: Fitch Affirms US RMBS Servicer ratings of Select Portfolio Servicing; Outlook stable


Fitch Ratings asserted the following we ratings of primary and special residential services for Select wallet service (SPS).

American residential evaluation of the main service agent for product Alt-A at “RPS1-“; Outlook stable;

American residential rating of the main service for the Subprime product at “RPS1-”; Outlook stable;

American residential first specialized service rating for the Closed-End Second Links product at “RPS1-”; Outlook stable;

American residential special service qualification at “RSS1-“; Stable outlook.

RATING ACTIONSENTITY/DEBT	RATING		PRIOR

Select Portfolio Servicing, Inc.

? RMBS Main Alt-A Servicer

RPS1- 	Affirmed		RPS1-

? RMBS Primary Specialty Servicer – Second Link

RPS1- 	Affirmed		RPS1-

? RMBS Primary Subprime Servicer

RPS1- 	Affirmed		RPS1-

? Special RMBS server

RSS1- 	Affirmed		RSS1-

SEE ADDITIONAL EVALUATION DETAILS

Main scoring drivers

The affirmation of ratings and outlook reflects the continuous improvements of the SPS system and processes and the constant improvement in portfolio performance. The Maintenance Officer demonstrates effective defect management practices, a strong management team and staff, and highly developed enterprise risk management controls and processes.

The ratings also take into consideration the support of its ultimate parent company, Credit Suisse Group, AG (Credit Suisse), which is rated “A-” / negative, as of April 1, 2021, through Fitch Ratings, Inc.

SPS has been managing residential mortgages since 1989 and RMBS transactions since 2000. SPS is a high-interacting special service, providing effective default service results for third parties by focusing on its core loss mitigation strengths , compliance and management of deadlines. SPS’s portfolio reflects a history of acquiring repeatable, non-performing and seasoned loans from major issuers as well as seasoned service default portfolios from major banking services. In addition, SPS maintains ongoing relationships with investors in newly issued residential loans and actively participates in the management of loans acquired through the residential mortgage conduit from Credit Suisse.

In response to the coronavirus pandemic, SPS took proactive steps to ensure that the quality of its service was not significantly affected. Beginning in mid-March 2020, SPS launched its response to the pandemic by moving both its call center and full-time equivalents (FTEs) without customer contact to work from home. SPS also said it provides laptops, wireless access points and other essential office equipment to its associates overseas to work from home, which has improved its ability to limit interruptions in the provision of services, while maintaining a high quality of work.

Some of the main developments related to the coronavirus include:

Effectively transitioned over 70% of its staff to a work-from-home environment by the end of March 2020. The maintenance department used its contact-intensive service strategies and proprietary technology , which includes Topic Tracker and Customer 360-degree HUB, to improve its customer service processes during the pandemic period.

SPS said more than 180,000 mortgages sought help during this period. From June 30, 2021, 130,000 mortgages who have requested help are up to date; 25,000 are in active loss mitigation; 15,000 are still in abstention and about 10,000 are delinquents.

The 25,000 loss mitigation loans generated 55.7% of cash flow; participation in the scheme is as follows: 16% unemployment; 23% repayment plan; 24% test changes and 37% are under review pending a full application.

SPS indicated that as of June 30, 2021, it received full or partial payments from 93.8% of customers affected by the coronavirus. The server agent said its policy maximizes cash flow for investors and mitigates the risks that would be associated with post-forbearance lump-sum payments.

As a Special Provider, SPS has a robust process for mapping, reviewing and reconciling in-flight loss mitigation files from other providers to ensure a seamless transition for customers. On transferred loans, SPS confirms that relevant documentation is included in the transfer, reconciles loan and modification documents, performs quality control functions, and initiates welcome calls, letters and email communications (the if applicable) at the time of transfer. Fitch expects SPS’s proactive approach to ensuring smooth loan transfers will better position its associates to help defaulting borrowers.

SPS continues to integrate multiple digital technologies into its service platform to support anticipated growth goals, enhance the customer experience, and adapt to the changing technology landscape. The customer-oriented and mobile-ready website has been redesigned during this review period and is complemented by a customer account dashboard that displays account details, payment information, important messages and answers to account-specific questions. The service agent uses text messages and e-mail communications with customers.

From June 30, 2021, SPS has managed approximately 999,400 residential mortgage loans with an outstanding principal balance of $ 176.0 billion, which represents a 6% decline in the portfolio year-on-year. The service portfolio consists of 874,000 non-agency RMBS loans totaling approximately $ 152.0 billion, 86,700 loans managed by third parties totaling $ 17.2 billion and around 38,800 agency loans totaling $ 6.75 billion.

Further information is available at www.fitchratings.com

PARTICIPATION STATUS

The rated entity (and / or its agents) or, in the case of structured finance, one or more parties to the transaction participated in the rating process, except that the following issuer (s), if any, have not participated in the rating process, or provide additional information, beyond the publicly available information of the issuer.

APPLICABLE CRITERIA

Rating criteria we and Canadian Residential and Small Balance Commercial Mortgage Servicers (pub. 07 Feb 2020)

Credit Officer Rating Criteria (pub. 08 Feb 2020)

ADDITIONAL INFORMATION

Solicitation status

Approval policy

APPROVAL STATUS

Select Portfolio Servicing, Inc. 	-
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