ֳ

Rating Action Commentary

ֳ Affirms Nationstar's U.S. RMBS Master Servicer Rating

Tue 14 Jan, 2020 - 9:34 AM ET

ֳ-New York-14 January 2020: ֳ has affirmed the U.S. residential mortgage master servicer rating for Nationstar Mortgage LLC, an indirect subsidiary of Mr. Cooper Group Inc., as follows:

--U.S. residential primary servicer rating for master servicing at 'RSM2+'.

The Rating Outlook is Stable.

The affirmation and Stable Outlook reflect Nationstar's experienced senior management and staff, enterprise-wide control environment, operational enhancements, and focus on subservicer performance and compliance.

Nationstar's master servicing team oversees 60 primary servicers and subservicers as well as 477 securitizations and whole loan transactions. Operational enhancements during the current review period included several process improvements in connection with administering trust collapses and a tool to facilitate reconciliation of servicer remittances.

Master servicing has demonstrated strong control processes utilizing the SBO2000 master servicing system by Alan King and Co., Inc., (SBO2000) and several additional vendor and proprietary systems. Quarterly risk and control self-assessments are performed, which are supplemented by an internal audit every other year. The Reg AB report for the year ended Dec. 31, 2018 had no instances of material noncompliance. These results are consistent with the prior review periods.

Nationstar provides investors with performance data of publicly traded master serviced loans using its web portal. The web portal's field definitions allow investors the ability to obtain customized views of the pool data as well as loan-level detail.

As of Sept. 30, 2019, Nationstar continues to be the second largest master servicer in the U.S. with a master servicing portfolio composed of approximately 301,783 loans totaling $61.4 billion, which increased YoY from 275,899 loans totaling $49.1 billion as of Sept. 30, 2018. Nationstar added seven new issuers in 2018 and six new issuers as of Sept. 30, 2019. Nationstar was named Master Servicer on 20 new securitizations in 2018, and 44 new securitizations to date as of Sept. 30, 2019, which resulted in adding 38 new servicers during a 21 month period, ending Sept. 30, 2019. The top three subservicers, based on loan volume, accounted for about 87% of Nationstar's master servicing portfolio.

ֳ does not publicly rate the credit and financial strength of Mr. Cooper. However, ֳ's financial institutions group reviewed Mr. Cooper's financial statements to provide an internal assessment, as a company's financial condition is a component of ֳ's servicer rating analysis.

ֳ 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, ֳ further differentiates ratings by plus (+) and minus (-) as well as the flat rating. For more information on ֳ's residential servicer rating program, please see ֳ's report "Criteria for Rating U.S. Residential and Small Balance Commercial Mortgage Service," dated February 2017 and available at .

Contact:
Primary Analyst
Richard Koch
Director
+1-646-582-4480
ֳ, Inc.
33 Whitehall Street
New York, NY 10004

Secondary Analyst
Caroline Otis
Analyst
+1-646-582-3547

Committee Chairperson
Roelof Slump
Managing Director
+1-212-908-0705


Media Relations: Sandro Scenga, New York, Tel: +1 212 908 0278, Email: sandro.scenga@thefitchgroup.com

Additional information is available on
Applicable Criteria
Criteria for Rating Loan Servicers (pub. 23 Feb 2017)
Criteria for Rating U.S. and Canadian Residential and Small Balance Commercial Mortgage Servicers (pub. 23 Feb 2017)

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