Fitch Affirms BLS's Commercial Special Servicer Rating

NEW YORK--()--Fitch Ratings has affirmed Bayview Loan Servicing, LLC's (BLS) commercial special servicer rating at 'CSS3'.

The rating reflects Fitch's assessment of BLS's experienced management team, well established internal control environment, and the company's history servicing small balance commercial loans as well as larger balance commercial mortgage workout experience. The special servicer rating also reflects a historically limited focus on commercial loans and CMBS, continued elevated turnover, limited but suitable asset management technology and controls around approvals for resolution strategies, as well as the company's financial condition.

BLS experienced elevated overall turnover of 23% (down from 37% at Fitch's last review) due to 10 employee departures, one (10%) was an internal transfer, allowing BLS to retain the employee and their experience within the organization. Turnover in the last 12 months was concentrated at the staff and middle management levels and while higher than some of their Fitch-rated peers, it is consistent with the runoff in the commercial servicing portfolio.

Bayview Loan Servicing, LLC is the servicing arm of Bayview Asset Management, LLC (BAM), a manager of funds that invests in commercial and residential whole loans as well as asset-backed securities and other mortgage-related assets. BLS, established in 1999, provides residential mortgage, small balance commercial, and commercial loan special servicing. Commercial loans represent approximately 6% of BLS's total servicing portfolio, reflecting a focus historically on residential loans.

BAM anticipates future growth in the commercial mortgage portfolio to come from BAM managed fund investments (including originations) and CMBS investments. BAM continues efforts to raise opportunity funds which contain CRE components, and the company continues to invest in building out its CMBS group. The company, through affiliates, has begun investing in investment grade and interest only classes of recent vintage multi-borrower CMBS transactions as well as investment and non-investment grade classes of single transactions, although none of the investments represent controlling class holder rights.

As of June 30, 2016, the company was named special servicer for 6,039 non-CMBS CRE loans totaling just under $1.7 billion, which continues to run-off.

The servicer rating is based on Fitch's methodology, as described in the reports highlighted at the end of the press release.

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

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+1-212-908-0714
Fitch Ratings, Inc.
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or
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James Bauer
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+1-212-908-0343
or
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Jonathan Teichmann
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+1-212-908-0862
or
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Contacts

Fitch Ratings
Primary Analyst
Andrew Foster
Director
+1-212-908-0714
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
James Bauer
Director
+1-212-908-0343
or
Committee Chairperson
Jonathan Teichmann
Senior Director
+1-212-908-0862
or
Media Relations
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com