Fitch Affirms The Bank of New York Mellon's U.S. RMBS Master Servicer Rating

NEW YORK--()--Fitch Ratings affirms The Bank of New York Mellon (BNY Mellon) U.S. residential master servicer rating at 'RMS1'. The Rating Outlook is Stable.

The master servicer rating affirmation and Stable Rating Outlook reflect BNY Mellon's increased scope and frequency of its primary servicer review process including Consent Orders, Attorneys General's and the Consumer Financial Protection Board's (CFPB) servicing requirements. Also, included is the increased oversight of the servicers' loss mitigation and modification decisions. All servicers in the master servicing portfolio are reviewed annually, whether through desktop or on-site reviews.

In addition, the rating action reflects the financial strength of its parent The Bank of New York Mellon Corporation, which is rated 'AA-/F1+' with a Stable Outlook by Fitch. Additional information on the parent is available at 'www.fitchratings.com'.

The rating action also reflects the master servicer's experienced senior management team, although during the period under review, the master servicing platform lost two senior managers from its operations. However, BNY Mellon indicated that as part of the company's succession planning process, the positions were filled through two internal promotions. The senior management team averages over 22 years of industry and company experience, and the company has a robust cross-training development program for all managers across all departments and functions.

For the period ended Dec. 31, 2012, BNY Mellon's external auditors reported that the master servicing platform had one instance of Reg AB non-compliance pertaining to a custodial account that was not maintained as set forth in the transaction agreements. In the prior year, the master servicer had two other non-compliance issues that were subsequently remediated.

BNY Mellon's master servicing platform is headquartered in New Albany, OH with a second location in Pittsburgh, PA, which provides additional back-up capacity for its business operation. As of June 30, 2013, BNY Mellon master serviced 52,918 loans totaling $8.6 billion, which included 52, 578 non-agency RMBS loans totaling $8.5 billion and 340 other loans totaling $78 million.

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 and small Balance Commercial Mortgage Servicers', dated Nov. 29, 2006 and 'Global Rating Criteria for Structured Finance Servicers' dated Jan. 31, 2011, which is available on the Fitch Ratings web site at 'www.fitchratings.com'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Rating U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria', dated Jan. 31, 2011.

Applicable Criteria and Related Research:

U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=600065

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=802533

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Contacts

Fitch Ratings
Primary Analyst
Michael Laidlaw
Director
+1-212-908-0251
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst
Diane Pendley
Managing Director
+1-212-908-0777
or
Committee Chairperson
Grant Bailey
Managing Director
+1-212-908-0544
or
Media Relations:
Sandro Scenga, +1-212-908-0278 (New York)
sandro.scenga@fitchratings.com

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Contacts

Fitch Ratings
Primary Analyst
Michael Laidlaw
Director
+1-212-908-0251
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst
Diane Pendley
Managing Director
+1-212-908-0777
or
Committee Chairperson
Grant Bailey
Managing Director
+1-212-908-0544
or
Media Relations:
Sandro Scenga, +1-212-908-0278 (New York)
sandro.scenga@fitchratings.com