Fitch Ratings has affirmed Bayview Loan Servicing, LLC's (BLS) U.S. residential special servicer rating as follows:
--Special servicer rating at 'RSS2'.
The special servicer rating reflects the company's ability to manage and liquidate nonperforming residential mortgage loans and real estate owned (REO) assets utilizing its solid default management expertise and advanced technology, which are integral components of special servicing. The rating also reflects BLS' experienced management and staff, enhanced loan administration procedures, and expanded training programs. In addition, the rating was determined in accordance with Fitch's criteria 'Rating U.S. Residential Mortgage Servicers' and 'Global Rating Criteria for Structured Finance Servicers'.
Headquartered in Coral Gables, FL, BLS is the servicing arm of Bayview Asset Management, LLC (Bayview). On June 1, 2007 Bayview Financial Holding, LP (BFH) was formed to hold Bayview Financial, LP and Bayview Lending Group, LLC. (BLG). In October 2008, a new subsidiary Bayview Asset Management (BAM) was created with Blackstone Capital Partners, an affiliate of The Blackstone Group, holding 46 percent ownership interest. Bayview is a full-service real estate investment and mortgage finance company. Fitch does not rate the credit or financial strength of BLS or its parent Bayview; however, Fitch's financial institutions group has reviewed the company's financial statements, and its analysis is incorporated into the servicer ratings.
The company's niche is servicing and buying seasoned subperforming and nonperforming residential and small balance commercial mortgage loans. As of July 31, 2009 BLS serviced 27, 566 residential mortgage loans totaling $4.2 billion representing an increase from 20,741 loans totaling approximately $2.3 billion. The servicer's portfolio is further broken down as follows: 13,930 ($1.4 billion) private residential mortgage-backed securities (RMBS), 8,311 ($1.8 billion) third party servicing, 5,172 ($835 million) owned portfolio, and 153 ($5.7 million) agency loans.
During 2009 BLS increased staffing by 43 full-time employees, introduced a new hire training program, and initiated a professional development program to identify and develop team leaders within the company. The servicer expanded its branch operations in Pompano Beach, FL and launched a new default site operation in Ft. Washington, PA. BLS also completed two new third-party servicing arrangements and is pursuing additional third party servicing arrangements; however, current market conditions could create challenges to growth.
BLS is also an active participant in the Treasury's Home Affordable Modification Program (HAMP). The servicer continues to make upgrades and enhancements to its loan administration and default processes and procedures including: introduction of a robust automated functionality for uploading bulk servicing data, automation of escrow administration functions, and deployment of a new Bayview loan servicing web site to enhance customer service capabilities. BLS also upgraded its telephony systems and expanded call center coverage. As of the review period ended July 31, 2009 BLS completed 9,499 loss mitigation cases including 4,190 modifications. The servicer increased its promises to pay to 45% from 31% and increased its promises kept to 69% from 66%.
Fitch believes that BLS has an experienced and tenured management team, highly developed control environment, and appropriate systems and technology to effectively manage its current servicing portfolio. However, Fitch will continue to monitor BLS' performance and operational capabilities as the company pursues its growth initiatives and manages increased delinquencies in its portfolio.
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 and 'Global Rating Criteria for Structured Finance Servicers' dated Sept. 30, 2009, which are available on the Fitch Ratings web site at 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'.
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