Fitch Monitoring Nationstar's U.S. RMBS Servicer Ratings Following Bank of
NEW YORK -- January 8, 2013
Fitch Ratings is monitoring Nationstar Mortgage LLC's (Nationstar) servicer
ratings following the announcement by Bank of America (BOA) on Jan. 7, 2013
that it plans sell to the company mortgage servicing rights (MSRs) on
approximately 1.3 million residential loans totaling $215 billion. Loan
transfers are expected to occur in multiple stages and to be completed by the
end of the third quarter 2013. Given the scale of the announced BOA
transaction as well as the on-going integration of Aurora Bank FSB's (Aurora)
servicing assets at Nationstar, Fitch is in active dialogue with the company
to assess how the acquisition of MSRs from BOA will be managed from both a
timing and resources standpoint.
At this time, Fitch does not believe the BOA transactions will impact
Nationstar's existing servicer ratings as existing ratings already reflect
Nationstar's capacity planning including staffing needs. However, Fitch will
closely monitor the loan transfers and subsequent performance to determine any
impact on Nationstar's servicer ratings. A significant deterioration in
operational capability or portfolio performance at the company could result in
a servicer rating downgrade or rating watch.
Fitch currently rates Nationstar 'RPS2' for primary servicer of subprime and
Alt-A product, and 'RSS2' for special servicer, all with a Stable Rating
Outlook. Nationstar recently completed its acquisition of Aurora's residential
mortgage servicing platform and assets, and integration of the former Aurora
servicing sites in Scottsbluff NE, Indianapolis IN, and Littleton CO. The
Aurora acquisition gave Nationstar increased capacity to grow its servicing
portfolio. Nationstar is looking to leverage its existing capacity and
infrastructure as well as expand into new markets, possibly leveraging
existing BOA resources.
As of Sept. 30, 2012, Nationstar's servicing portfolio was comprised of over
1.1 million loans totaling $198 billion. The servicing portfolio included over
247,000 first and second lien subprime loans totaling $56 billion and 43,000
Alt-A loans totaling $11.4 billion, with over 270,000 loans totaling $46.8
billion in special servicing. The MSR acquisition from BOA is expected to
increase Nationstar's servicing portfolio by approximately 100% over the
course of 2013.
Additional information is available at 'www.fitchratings.com'.
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Thomas Crowe, +1-212-908-0227
One State Street Plaza
New York, NY 10004
Diane Pendley, +1-212-908-0777
Sandro Scenga, New York, +1 212-908-0278
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