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

NEW YORK--()--Fitch Ratings has affirmed The Bank of New York Mellon (BNY Mellon) U.S. residential master servicer rating at 'RMS2'/Stable Outlook:

The rating affirmation and Stable Outlook reflects the master servicer's organizational changes, experienced management team, enhanced primary servicer oversight program and the financial strength of its parent, The Bank of New York Mellon Corporation. Fitch rates the parent 'AA-'/'F1+'/Stable Outlook effective July 12, 2016. Additional information on the parent is available at 'www.fitchratings.com'.

The rating takes into consideration the strategic platform changes of BNY Mellon to diversify the master servicing platform by integrating the servicing oversight functions for non-RMBS loans, in particular assuming oversight responsibilities for over 121,000 government-sponsored enterprise (GSE) loans and the 250 additional primary servicers.

During this review period, the master servicing completed several management team and staff cross training initiatives to accommodate the new loans into its master servicing operations. BNY Mellon has also automated several reporting functionalities and will be increasing the usage of SBO2000, its master servicing system, to provide additional and customized reports to meet both investor and regulatory requirements.

The master servicer indicated that the changes reflect the need to complete ownership over all aspects of the loan transactions, to develop and enhance economies of scale and to maintain best practices. BNY Mellon master servicer also completed several training and reporting enhancements that will materially improve its product diversification efforts.

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, 2016 BNY Mellon master serviced 159,439 loans totaling $22.5 billion. This is further broken down into 38,160 non-agency RMBS loans totaling approximately $5.5 billion and 121,275 GSE loans totaling approximately $17 billion.

Fitch believes the master servicer maintains high standards as an effective master servicer and evidences strong oversight functionalities over its primary servicers. Furthermore, BNY Mellon's diversification efforts take advantage of its existing shared services among its enterprise-wide loan operations. This is expected to further enhance its master servicing effectiveness.

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 Servicer Rating Criteria', dated April 23, 2015, which is available at 'www.fitchratings.com'.

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

Additional Disclosures

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Contacts

Fitch Ratings
Primary Analyst
Michael Laidlaw
Director
+1-212-908-0251
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Harper Williams
Analyst
+1-646-582-4926
or
Committee Chairperson
Roelof Slump
Managing Director
+1-212-908-0705
or
Media Relations
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Michael Laidlaw
Director
+1-212-908-0251
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Harper Williams
Analyst
+1-646-582-4926
or
Committee Chairperson
Roelof Slump
Managing Director
+1-212-908-0705
or
Media Relations
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com