Fitch Affirms Bayview's Resi and Small Balance Comm'l Servicer Ratings; Outlook Stable

NEW YORK--()--Fitch Ratings has affirmed Bayview Loan Servicing, LLC's (BLS) U.S. residential special and small balance commercial servicer ratings as follows:

-- U.S. Residential Special Servicer Rating at 'RPSS2+' Outlook Stable;

-- U.S. Small Balance Commercial Primary Servicer Rating at 'SBPS2+'Outlook Stable;

-- U.S. Small Balance Commercial Special Servicer Rating at 'SBSS2+' Outlook Stable.

The affirmation and Stable Outlook reflect BLS's corporate governance and control enhancements to align with current regulatory mortgage servicing requirements and guidelines. The servicer maintained its managed growth approach and has further developed the necessary internal controls to effectively achieve its objectives.

The servicer utilizes an effective proprietary model in determining at-risk loans for loss mitigation considerations and effective use of its proprietary net present value model in loss mitigation calculations.

During the period under review, BLS hired a seasoned attorney to fill the newly created position of chief compliance officer and increased full-time equivalent (FTE) positions in its internal audit and compliance areas. The servicer indicated that the newly created positions reflect its growth and the need to enhance the management structure between the respective business units and senior management.

BLS provides full-service residential mortgage and small balance commercial loan primary and special servicing. The servicer continues to grow its component service business which includes loss mitigation, bankruptcy, foreclosure, and REO services to its business clients. As of Sept. 30, 2014, BLS component serviced 28,589 residential mortgage loans totaling $4.935 billion. Since January 2014, the servicer increased the number of FTEs to 215 from 75 in its component service business and for the 12-month period ended Sept. 30, 2014, added 106 new positions.

Furthermore, in anticipation of future planned growth, the servicer added a new office in Miami and expanded its Ft. Washington, PA, Hurst, TX and Pompano Beach, FL locations. In addition, over the past year, BLS completed several significant third-party arrangements to provide enhanced due diligence reviews over various servicing functions to comply with its business and regulatory needs.

As of Sept. 30, 2014, BLS serviced 88,869 residential mortgage loans totaling $19.6 billion. This is further broken down by product as follows: private RMBS 47,034 loans totaling $9.5 billion, third-party servicing 22,928 loans totaling $6.5 billion, an owned portfolio of 18,839 loans totaling $3.5 billion, and agency 67 loans totaling $1.8 million. In addition, the servicer primary serviced 3,261 small balance commercial loans totaling $1 billion and special serviced 2,667 small balance loans totaling $948 million.

Fitch does not publicly rate the credit and financial strength of BLS or its parent, Bayview Asset Management, LLC (BAM). However, Fitch's financial institutions group reviewed BLS's financial statements to provide an internal assessment, as a company's financial condition is a component of Fitch's servicer rating analysis.

Headquartered in Coral Gables, FL, BLS is the servicing arm of BAM, which was created in October 2008 with Blackstone Capital Partners, an affiliate of The Blackstone Group, holding a minority ownership interest. The parent is a privately held fund management business involved in mortgage acquisition and securitization.

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. 2014.

Applicable Criteria and Related Research:

U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria -- Effective January 31, 2011 to January 30, 2014

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=943937

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Contacts

Fitch Ratings, Inc.
Primary Analyst
Michael Laidlaw Director
+1-212-908-0251
Fitch Ratings, Inc.
One State Street Plaza
New York, N.Y. 10004
or
Secondary Analyst
Roelof Slump
Managing Director
+1-212-908-0705
or
Committee Chairperson
Vanessa Purwin
Senior Director
+1-212-908-0269
or
Media Relations
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings, Inc.
Primary Analyst
Michael Laidlaw Director
+1-212-908-0251
Fitch Ratings, Inc.
One State Street Plaza
New York, N.Y. 10004
or
Secondary Analyst
Roelof Slump
Managing Director
+1-212-908-0705
or
Committee Chairperson
Vanessa Purwin
Senior Director
+1-212-908-0269
or
Media Relations
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com