DBRS Confirms First National Financial’s Primary Residential Mortgage Servicing and Special Residential Mortgage Servicing as Good

DBRS has today confirmed both the Primary and Special Residential Mortgage Servicing of First National Financial LP (FNF or the Company) as Good.

The confirmation reflects DBRS’s review of the changes and updates since the last review in May 2013 in the areas of company structure, management experience and outlook, asset administration, loss management, technology, financial strength, staffing and training, and procedures and controls.

The confirmation is based on the following factors:

(1) FNF’s more than 25 years of experience in originating and servicing residential loans.

(2) Demonstrated strength in technology and commitment to providing customers with superior customer service, such as the implementation of paperless technology that enables cost-effective and efficient residential mortgage origination and administration.

(3) Ability to grow mortgages under administration and capitalize on servicing economies of scale.

(4) The comfort of mortgage insurers with the Company’s servicing capacity, where 83% of its serviced portfolio is insured and no claim has ever been rejected by the mortgage insurers.

(5) FNF undertook many initiatives since 2009 to improve servicing capability and efficiency in the face of a challenging economic environment and rapidly increasing mortgage delinquencies and defaults. Mortgage delinquencies have since stabilized and decreased significantly following a cleanup of seriously delinquent files, all of which were paid out in full. The overall cure rate for delinquent mortgages within 120 days also improved to approximately 96% in 2013, according to DBRS estimates.

The Company, rated BBB by DBRS, is a Toronto-based originator, underwriter and servicer of predominantly prime residential mortgages and commercial mortgages. With approximately $75.6 billion ($57.7 billion residential and $18.0 billion commercial) in mortgages under administration as of December 31, 2013, the Company is Canada’s largest non-bank originator and underwriter of mortgages.

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.