Fitch Upgrades Rushmore Loan Management Services' U.S. RMBS Servicer Ratings

NEW YORK--()--Fitch Ratings has upgraded Rushmore Loan Management Services' (Rushmore) U.S. residential mortgage servicer ratings as follows:

--U.S. residential primary servicer rating for Prime product to 'RPS3+' from 'RPS3'; Outlook Stable;

--U.S. residential primary servicer rating for Subservicing to 'RPS3+' from 'RPS3'; Outlook Stable;

--U.S. residential special servicer rating to 'RSS3+' from 'RSS3'; Outlook Stable.

The rating upgrades and Stable Outlook are based on enhancements to Rushmore's servicing platform, robust high-touch servicing model, integrated servicing technology, and comprehensive internal control environment. The ratings also reflect the financial condition of Rushmore, a non-publicly rated entity.

Rushmore has experience in servicing performing, re-performing and nonperforming loans, and is an approved seller/servicer for Fannie Mae, Freddie Mac and Ginnie Mae. Rushmore has servicing sites in Irvine CA, Dallas TX, and Puerto Rico. The Puerto Rico site was established to handle default servicing on loans secured by properties located in Puerto Rico. Rushmore also utilizes the Puerto Rico site for a number of back-office functions, in addition to a pilot program for call center functions that would leverage bi-lingual reps, for loans it services in the U.S. As of March 31, 2016, Rushmore was servicing more than 62,000 loans totaling $11.9 billion, an increase from approximately 46,000 loans totaling $9.1 billion as of March 31, 2015.

Rushmore continues to enhance its operational capabilities in loan administration and defaulted loan management, and has expanded its management, supervisor, and staffing levels as well as its off-shore capacity to accommodate its portfolio growth. In addition, Rushmore separated and internalized certain functions that had been handled on a shared basis with its parent, Roosevelt Management Company (Roosevelt).

Technology investments during the current review period include the implementation of a number of proprietary systems comprising an ARM and modified loan auditing system, an MI claim tracking system, and an SCRA tracking system. Rushmore also redesigned its borrower website to include more self-service features.

Rushmore has a robust single-point-of-contact (SPOC) model, in which all loans 45 or more days past due or identified as being in imminent default are assigned an account resolution specialist (ARS).

Rushmore's internal control environment incorporates an enterprise risk management (ERM) committee that meets monthly to identify, manage and report on the overall risks across the company. The ERM committee reviews findings from quality control, compliance, quality assurance, and internal audit. Internal audit is outsourced to an established independent auditing firm. Since Fitch's prior review, Rushmore completed its initial Regulation AB (Reg AB) report for the year ended Dec 31, 2015, which did not contain any instances of material non-compliance.

Rushmore is a wholly-owned subsidiary of Roosevelt, an investment management firm and asset manager of residential mortgage loans and REO assets. Since Fitch's prior review, majority ownership of Roosevelt was transferred to a newly created fund, President Residential Mortgage Partners, LP. According to the company, the new fund focuses on residential mortgage investments, and provides a significantly extended investment horizon and refreshed access to capital for the platform compared to the fund that was previously the majority owner.

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

Applicable Criteria

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

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=600065

Additional Disclosures

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1005451

Endorsement Policy

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

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Contacts

Fitch Ratings
Primary Analyst
Thomas Crowe
Senior Director
+1 212-908-0227
Fitch Ratings, Inc.
33 Whitehall St
New York, NY 10004
or
Secondary Analyst
Michael Laidlaw
Director
+1 212-908-0251
or
Committee Chairperson
Roelof Slump
Managing Director
+1 212-908-0705
or
Media Relations, New York
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Thomas Crowe
Senior Director
+1 212-908-0227
Fitch Ratings, Inc.
33 Whitehall St
New York, NY 10004
or
Secondary Analyst
Michael Laidlaw
Director
+1 212-908-0251
or
Committee Chairperson
Roelof Slump
Managing Director
+1 212-908-0705
or
Media Relations, New York
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com