Cenlar FSB STRONG Mortgage Loan Servicer Ranking Affirmed; Outlook is Stable

OVERVIEW

  • We affirmed our STRONG ranking on Cenlar FSB, a wholly owned subsidiary of Cenlar Capital Corp., as a residential mortgage loan servicer.
  • The affirmation reflects Cenlar’s well seasoned management team, solid infrastructure, and sound controls in its servicing operations.
  • Cenlar also exhibits solid risk management and thorough policies and procedures.

September 1, 2011, New York, (Standard & Poor’s) – Standard & Poor’s Ratings Services today affirmed its STRONG ranking on Cenlar FSB (Cenlar), a wholly owned subsidiary of Cenlar Corp., as a residential mortgage loan servicer. The outlook is stable.

The overall rankings are supported by STRONG subrankings for management and organization and loan administration.

The ranking affirmation reflects the company’s well seasoned management team, solid infrastructure, and sound controls in its servicing operations.

As a third-party mortgage servicer, we believe Cenlar remains focused on the importance of providing its clients and their borrowers with premier service. The company is one of the leading subservicers in the U.S., with more than 100 subservicing relationships. In late 2009, Cenlar substantially increased its servicing portfolio as a result of the collapse of Taylor Bean and Whitaker (originator and servicer) and the subsequent transfer of mortgage loans primarily from government-sponsored entities (GSEs).

In our opinion, Cenlar maintains a sound level of automation and effective use of technology, has thorough policies and procedures, offers its staff extensive and comprehensive training programs, and has demonstrated default management expertise. Operational metrics Cenlar provided through Standard & Poor’s SEAM (Servicer Evaluation Analytical Methodology) questionnaire indicate that the company compares, overall, favorably with other mortgage servicer we monitor. In our opinion; however, telephony statistics in collection and loss mitigation should be strengthened to align with current customer relations statistics.

Cenlar’s dedicated and experienced process improvement team continuously evaluates its servicing operations technology, applications, and processes to improve operating efficiencies. Cenlar accomplishes this through reengineering, investing in technology, and contracting with business partners to perform traditional services. The company’s level of automation, solid management team, and default management expertise allows Cenlar to continue to minimize portfolio risk through reliable internal controls and prudent loan servicing practices. In addition, we believe the company’s extensive and comprehensive training programs, along with management’s commitment to employee development, have enabled Cenlar to successfully retain employees, which allows for a stable and constant operating environment.

Overall delinquency statistics, based on the servicing portfolio characteristics, in our opinion, continue to align with relevant averages reported by the Mortgage Bankers Association of America. As a third-party servicer, Cenlar works with its clients to proactively identify alternatives to foreclosure.

Outlook

The outlook is stable for residential mortgage servicing. We believe that over the next 12 to 18 months, Cenlar will continue to focus on maintaining its firm operational performance and ensure that it has appropriate staff levels, vendor partners, and technology in place to effectively manage its servicing portfolios. In addition to servicing its clients’ portfolios, Cenlar provides interim servicing, which greatly expands the company’s annual servicing business. Standard & Poor’s believes that Cenlar will remain a solid residential mortgage loan servicer for a wide variety of investors.

Source: Standard & Poor’s, Primary Servicer Analyst: Edward Highland, New York (1) 212-438-1287, edward_highland@standardandpoors.com; Secondary Contact: Todd Niemy, New York (1) 212-438-2494, todd_niemy@standardandpoors.com; www.standardandpoors.com/ratingsdirect.

Media Contact

Adrienne Kowalski

Director,
Corporate Communications
Phone: 609-883-3900, ext. 7136
Email: arkowalski@cenlar.com