DBRS and Morningstar Credit Ratings Confirm Operational Risk Assessment Rankings Coverage for U.S. Residential Originators and Servicers

On July 11, 2019, Morningstar Credit Ratings, LLC (MCR) and DBRS, Inc. (DBRS; together, DBRS Morningstar) published their first announcement regarding the integration of the analytical teams focused on the U.S. Structured Finance market. Today’s press release is the thirty-ninth in a series to keep the market updated on analytical integration decisions and is focused on Operational Risk Assessments (ORAs) for U.S. residential mortgage originators and servicers.

<a href="https://www.dbrsmorningstar.com/research/347875/" target="_blank">“DBRS and Morningstar Credit Ratings Announce Analytical Integration Process and Ratings Overlap”</a>

REQUEST FOR COMMENT
Today, DBRS Morningstar published a Request for Comment (RFC) on the new DBRS Morningstar “U.S. Residential Mortgage Originator Rankings” and “U.S. Residential Mortgage Servicer Rankings” methodologies (collectively, the DBRS Morningstar U.S. Residential Mortgage Ranking Methodologies). The proposed methodologies provide the ability for residential originators or servicers to request that DBRS Morningstar issue a public ranking on their company. The ranking process is voluntary and is not a prerequisite to having a U.S. residential mortgage-backed security (RMBS) rated by DBRS Morningstar. The RFC period closes on August 24, 2020.

<a href="https://www.dbrsmorningstar.com/research/364189/" target="_blank">“DBRS Morningstar Requests Comments on Proposed U.S. Residential Mortgage Originator and Servicer Ranking Methodologies”</a>

MCR U.S. RESIDENTIAL ORIGINATOR AND SERVICER ORA RANKINGS PLACED UNDER REVIEW
In conjunction with the publication of the RFC, MCR has placed the following outstanding U.S. Residential ORA rankings Under Review—Analytical Integration Review:

-- Residential Loan Originator, Citadel Servicing Corporation
-- Residential Loan Servicer, Citadel Servicing Corporation
-- Residential Special Servicer, FCI Lender Services, Inc.

Upon finalization of the RFC period described above, DBRS Morningstar expects to review the companies listed above and may assign new DBRS Morningstar rankings to each of these companies, as appropriate, using the new DBRS Morningstar U.S. Residential Mortgage Ranking Methodologies, as applicable, published today as a RFC. In any event, the MCR U.S. residential servicer and originator ORA rankings will be removed from Under Review—Analytical Integration Review and withdrawn on or about October 1, 2020.

For more information related to the actions taken on outstanding MCR U.S. Residential ORA rankings, please see the following press release:

<a href="https://ratingagency.morningstar.com/PublicDocDisplay.aspx?i=6dhM9dYd%2bYY%3d&m=&s=LviRtUKXqs8kml5dHt7FTeE2SZmY0Fvqd4iX49Mk%2f9UapyiFTEO6TA%3d%3d" target="_blank">“Morningstar Credit Ratings Places U.S. Residential Operational Risk Assessments Rankings Under Review”</a>

MCR U.S. RESIDENTIAL VENDOR ORA RANKINGS PLACED UNDER REVIEW
In addition, MCR has also placed the following outstanding Residential Vendor rankings Under Review—Analytical Integration Review:

-- Residential Vendor (Real Estate Services), Radian Real Estate Management LLC
-- Residential Vendor (Real Estate Owned Asset Management), Radian Real Estate Management LLC
-- Residential Vendor (Asset Valuation), SWBC Lending Solutions, LLC
-- Residential Vendor (Asset Valuation), ServiceLink Valuation Solutions, LLC
-- Residential Vendor (Asset Valuation), ClearCapital.com, Inc.
-- Residential Vendor (Technology), Radian Technology Services, LLC
-- Residential Vendor (Asset Valuation), Red Bell Real Estate, LLC
-- Residential Vendor (Asset Management), ServiceLink, LLC

The new DBRS Morningstar U.S. Residential Mortgage Ranking Methodologies do not address vendor rankings. DBRS Morningstar will not assign new DBRS Morningstar rankings to residential vendors. The outstanding MCR Residential Vendor rankings will be removed from Under Review—Analytical Integration Review and withdrawn on or about October 1, 2020.

MCR rankings, forecasts, and assessments contained in this press release are not assessments of the creditworthiness of an obligor or a security and thus are not credit ratings subject to NRSRO regulations.

Notes:
All data provided in this press release is as of July 23, 2020, and is preliminary and subject to change.

For analytical inquiries regarding this press release, please contact Kathleen Tillwitz, Managing Director, Head of U.S. Operational Risk for U.S. RMBS, U.S. ABS, and U.S. Structured Credit.

DBRS
Kathleen Tillwitz
kathleen.tillwitz@dbrsmorningstar.com
+1 212 806-3265

For rating engagement inquiries regarding U.S. Residential Mortgage Rankings, please contact Sean O’Connor, Managing Director, Head of Global Business Development.

DBRS
Sean O’Connor
sean.oconnor@dbrsmorningstar.com
+1 212 806-3252

For more information on the transactions rated by DBRS Morningstar, please visit www.dbrsmorningstar.com or contact DBRS at info@dbrsmorningstar.com. For transactions rated by MCR, please visit www.morningstarcreditratings.com or contact ratingagency@morningstar.com.

DBRS
Stephen Bernard
stephen.bernard@dbrsmorningstar.com
+1 212 806-3240