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

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

The confirmations reflect DBRS’s review of the changes and updates since the last review in May 2018 in the areas of company and management, asset administration, reporting and customer service, default and loss management, technology, financial condition and controls and compliance. The servicer evaluations may be taken as evidence of FNF’s satisfaction of DBRS’s expectations to act as a third-party sub-servicer for residential mortgage-backed securities and be relied on by third parties as such.

The confirmations are based on the following factors:

(1) FNF’s more than 30 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 capitalize on servicing economies of scale.

(4) The comfort of mortgage insurers with the Company’s servicing capacity, where 80% 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. Mortgage 90-plus-day delinquencies have since stabilized and decreased significantly to 0.15% as of the end of 2018. The overall cure rate for delinquent mortgages within 120 days remained high at approximately 99.5% in 2018, according to DBRS estimates.

The Company, rated BBB with a Stable trend by DBRS, is a Toronto-based originator, underwriter and servicer of predominantly prime residential mortgages and commercial mortgages. With approximately $106.2 billion ($79.2 billion residential and $27.0 billion commercial) in mortgages under administration as of December 31, 2018, the Company is Canada’s largest non-bank originator and underwriter of mortgages.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The principal methodology is Operational Risk Assessments for Canadian Structured Finance (April 2019), which can be found on dbrs.com under Methodologies & Criteria.

The rated entity or its related entities did participate in the rating process for this rating action. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

The full report providing additional analytical detail is available by clicking on the link under Related Documents below or by contacting us at info@dbrs.com.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.

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