Morningstar DBRS Confirms CMLS Financial Ltd.'s Canadian Residential Mortgage Servicer Ranking at MOR RS1

DBRS Limited (Morningstar DBRS) confirmed the Canadian Residential Mortgage Servicer ranking of CMLS Financial Ltd. (CMLS or the Company) at MOR RS1, with a Stable trend. The confirmation reflects Morningstar DBRS' review of the changes and updates since the last review in March 2024 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. CMLS was acquired by Nesto Inc. in June 2024 and has had limited disruption to its operations as the companies work towards fully integrating. CMLS has $54.8 billion ($16.4 billion residential and $38.3 billion commercial) in mortgages under administration as of December 31, 2024. 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.

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.

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

The principal methodology applicable to the ranking is Canadian Residential Mortgage Servicer Rankings (April 26, 2024 https://dbrs.morningstar.com/research/431644).

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
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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.