Morningstar DBRS Assigns Canadian Residential Mortgage Servicer Ranking of MOR RS1 to CMLS Financial Ltd.

DBRS Limited (Morningstar DBRS) assigned a Canadian Residential Mortgage Servicer ranking of MOR RS1, with a Stable trend, to CMLS Financial Ltd. (CMLS or the Company). Additionally, Morningstar DBRS withdrew both the Primary Residential Mortgage Servicing and the Special Residential Mortgage Servicing evaluations of CMLS.

On June 22, 2023, Morningstar DBRS published its “Canadian Residential Mortgage Servicer Rankings” methodology (the Methodology). The Methodology sets forth the criteria for Morningstar DBRS to assign and monitor public rankings to Canadian residential mortgage servicers. The ranking process is voluntary and is not a prerequisite to having a Canadian residential mortgage-backed security rated by Morningstar DBRS.

Concurrently with the publication of this methodology, Morningstar DBRS adopted an “Operational Risk Assessment Ranking Scale” that is used when issuing Canadian Residential Mortgage Servicer Rankings. The ranking scale can be found in the Rating Scales section of the Understanding Ratings page on the https://dbrs.morningstar.com website or at the link below:
https://dbrs.morningstar.com/research/368411

All rankings are subject to surveillance, which could result in rankings being upgraded, downgraded, placed Under Review, confirmed, or discontinued by Morningstar DBRS.

Morningstar DBRS Canadian residential mortgage servicer rankings are not credit ratings. Instead, they are designed to evaluate the quality of the parties that service or conduct servicing on residential mortgage loans. Although the servicer’s financial condition contributes to the applicable ranking, its relative importance is such that a servicer’s ranking should never be considered as a proxy of its creditworthiness.

The assignment reflects Morningstar DBRS’ review of the changes and updates since the last review in April 2023 in the following areas: company and management; controls and compliance; loan administration; customer service; escrow administration; default management; investor reporting; and technology. The servicer rankings may be taken as evidence that CMLS has satisfied Morningstar DBRS’ expectations to act as a third-party subservicer for residential mortgage-backed securities and be relied on by third parties as such.

CMLS is a privately owned, Canadian-based originator, underwriter, and servicer of residential and commercial mortgages with $47.5 billion ($14.6 billion residential and $32.9 billion commercial) in mortgages under administration as of December 31, 2023. Among the strengths of CMLS are its experienced senior management; mortgage insurers’ comfort with CMLS’ servicing capacity, where 79% of its serviced portfolio is insured and no claim has ever been rejected by mortgage insurers; and its strong control environment and audit program.

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

The principal methodology applicable to the ranking is Canadian Residential Mortgage Servicer Rankings (June 22, 2023; https://dbrs.morningstar.com/research/416302).

Other methodologies referenced in this transaction are listed at the end of this press release.

The ranking was initiated at the request of the entity. The entity or its related entities did participate in the ranking process for this action. Morningstar DBRS had access to the accounts, management and other relevant internal documents of the entity or its related entities in connection with this action. This is a solicited ranking.

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

DBRS Limited
DBRS Tower, 181 University Avenue, Suite 700
Toronto, ON M5H 3M7 Canada
Tel. +1 416 593-5577

The methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.

For more information on this ranking or on this industry, visit dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.