Fitch Affirms Central Mortgage's US Residential Servicer Ratings; Withdraws Special Servicer Rating

NEW YORK--()--Fitch Ratings has affirmed the following U.S. residential mortgage primary servicer ratings for Central Mortgage Company (CMC):

--Primary servicer rating for prime product at 'RPS2+', Outlook Stable;

--Primary servicer rating for Alt-A product at 'RPS2+', Outlook Stable.

Additionally, Fitch has simultaneously affirmed CMC's special servicer rating at 'RSS2+' and withdrawn the rating for commercial reasons.

The rating affirmations and Stable Outlook reflect CMC's effectiveness in managing its growth objectives, experienced senior management team and staff, highly developed corporate governance structure, continued financial support from its parent, and effective use of systems and technology. In addition, the servicer continues to make enhancements to its control processes, including the addition of staff dedicated to strengthening its corporate governance structure. In addition, the servicer indicated that it had no adverse external audit or examination findings or deficiencies related to its foreclosure processes, 2014 Regulation AB or USAP reporting requirements for the period under review.

During 2014, CMC enhanced the loan servicing structure by creating the position of director of mortgage loan servicing. Additionally, in a continued effort to collaborate and streamline best practices across CMC and its sister-company, Arvest Mortgage Company (AMC), the mortgage systems division for both companies now reports to the executive director of mortgage servicing. In addition, the servicer completed several senior management changes that included the appointment of a new Chairman and CEO.

William Roehenbeck, the then CEO and Chairman, resigned in Jan. 2015 and was replaced by Steven Plaisance, who assumed both president and CEO functions. Steven was the former president and COO of CMC over the prior three years. Phillip Porter, who is the current COO of Arvest Bank, CMC's parent company, assumed the position of Chairman of CMC. In addition, the servicer had several promotions within its group and functional management teams. The changes reflect the strength of the servicer's succession planning and retention programs in its ability to adequately staff from within with equally qualified personnel. Fitch believes the structural and new reporting changes will enhance CMC's best practices across the servicing platform.

Since Fitch's last review, the servicer made several enhancements to its collections' strategy, controls and technology covering borrower contact, repayment and monitoring. The servicer updated its system to include loans with automated payment arrangements into the automated dialer when the current monthly payment is not processed by the 15th of the month. CMC also updated its telephony and Website systems to allow borrowers who are 0-62 days delinquent to be able to make one payment.

The ratings also take into consideration the financial condition of CMC and its parent, both non-publicly rated entities. However, Fitch's Financial Institutions group reviewed the companies' financial statements to provide an internal assessment as a company's financial condition is a component of Fitch's servicer rating analysis. Finally, the ratings reflect Fitch's overall concerns for the U.S. residential servicing industry. Chief among them is the ability to maintain high performance standards while addressing the rising cost of servicing and changes to industry practices, mandated by regulators and other parties.

CMC is headquartered in Little Rock, AR, and is a wholly owned subsidiary of Arvest Bank of Fayetteville, AR and an indirectly owned subsidiary of Arvest Bank Group, Inc. (ABG), a bank holding company. The corporation also owns AMC. CMC is solely engaged in servicing loans through acquisition of mortgage servicing rights and through subservicing arrangements. The servicer indicated that it generally does not service loans originated by its sister company, AMC or its parent, ABG.

As of March 31, 2015, CMC serviced 165,065 loans totaling $30.4 Billion. The current portfolio includes 6,716 prime loans totaling $1.9 billion and 6,743 Alt-A loans totaling $1.5 billion and 146,615 agency loans totaling $26.1 Billion.

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

Applicable Criteria

Rating Criteria for Structured Finance Servicers (pub. 23 Apr 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864375

Rating Criteria for U.S. Residential and Small Balance Commercial Mortgage Servicers (pub. 23 Apr 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864368

Additional Disclosures

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=985940

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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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
Thomas Crowe
Senior Director
+1-212-908-0227
or
Media Relations:
Sandro Scenga, New York, +1 212-908-0278
Email: sandro.scenga@fitchratings.com

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
Thomas Crowe
Senior Director
+1-212-908-0227
or
Media Relations:
Sandro Scenga, New York, +1 212-908-0278
Email: sandro.scenga@fitchratings.com