DBRS Confirms First National Financial LP’s Primary, Master and Special Servicer Evaluations as Adequate

DBRS has today confirmed the evaluation of First National Financial LP (Servicing)’s (FNF or the Company) Primary, Master and Special Commercial Mortgage Servicing capabilities as Adequate.

Formed in 1988 and headquartered in Toronto, FNF originates and services commercial and residential mortgage loans, including commercial mortgage-backed securities (CMBS). Its servicing office is in downtown Toronto, with origination offices throughout Canada. FNF’s parent company, First National Financial Corporation, is currently rated BBB by DBRS, with a Stable trend.

FNF’s strengths include its experienced commercial mortgage management and staff, its above-average employee training program and the financial strength of its parent. One of the Company’s challenges is its ability to effectively service its commercial mortgage loans with its relatively small servicing staff. FNF continues to address this issue by increasing its focus on the automation of servicing tasks and reporting, and by streamlining its operations. Another challenge is the runoff of the Company’s CMBS portfolio. FNF management has indicated its commitment to servicing its current CMBS portfolio and its interest in servicing and originating CMBS loans in the future, should the opportunity arise.

As of March 31, 2014, FNF’s servicing portfolio consisted of 5,195 loans totalling $17.24 billion, of which 607 loans, totalling $3.14 billion, were CMBS. The Company was also named Master Servicer for ten CMBS transactions, oversaw five third-party primary servicers, was named Special Servicer for eight CMBS transactions and was actively specially servicing one loan with an unpaid principal balance of $1.4 million.

The servicer evaluations reflect a comprehensive review of the FNF organizational structure, the management team, asset administration, loss management, technology, staffing and training, procedures and controls, and financial strength.

Notes:
All figures are in Canadian dollars unless otherwise noted

The applicable methodology is Canadian Residential Mortgage Servicer Evaluations, which can be found on our website under Methodologies.

DBRS will publish a full report shortly that will provide additional analytical detail on this rating action. If you are interested in receiving this report, contact us at info@dbrs.com.