Fitch Places Everbank's Residential Primary Servicer Rating on Watch Negative

NEW YORK--()--Fitch Ratings has placed the following U.S. residential mortgage servicer rating of EverBank FSA dba Everhome Mortgage (EverBank) on Rating Watch:

--Residential primary servicer rating for Prime product at 'RPS3+'; Rating Watch Negative.

The Rating Watch Negative is based on significant and ongoing changes to the servicer's platform. In November 2013, the servicer announced a realignment of its servicing platform to maintain primarily performing, high quality agency and private banking loans while selling the servicing rights to approximately 180,000 non-performing loans and retaining 250,000 performing loans on its platform. The servicer indicated that the transfer would be ongoing until March 2014 and possibly further extended throughout the year. Additionally, the servicer explained that the purchaser would also be acquiring office space and approximately 500 full time equivalents from the servicer's Jacksonville location.

EverBank indicated that it would retain its default management capabilities by merging the remainder of the default management group with the asset management group and expand its single point of contact (SPOC) relationship for its default servicing platform. The servicer indicated that after the transfer, the portfolio's delinquency rate will decline to 3% from 13%.

While Fitch believes that the realignment within the default management department and the sale and transfer of the nonperforming loans will materially improve the servicer's delinquency performance, the new structure and staffing levels are in transition, and this may further impact its servicing performance and abilities.

EverBank is headquartered in Jacksonville FL and has been servicing residential mortgage loans for over 52 years through its many predecessor name changes and acquired companies. Prior to rebranding as EverBank in 2004, the company had acquired or joint-ventured to form various mortgage and/or banking operations. In 2007, EverBank acquired mortgage servicing assets from NetBank and in 2010, acquired the banking operations of Bank of Florida. As of Sept. 30, 2013, EverBank was servicing 434,849 residential mortgage loans totaling $61.3 billion. This included 10,694 non-agency RMBS prime loans totaling $2.5 billion.

Fitch will continue to monitor and review the ongoing changes at EverBank in consideration of its prime servicer rating.

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

Applicable Criteria and Related Research:

--'Rating Criteria for Structured Finance Servicers' (Feb. 26, 2013);

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

Applicable Criteria and Related Research:

Rating Criteria for Structured Finance Servicers

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=699690

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=811971

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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
Roelof Slump
Managing Director
+1-212-908-0705
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
Roelof Slump
Managing Director
+1-212-908-0705
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