Fitch Ratings has downgraded Crown NorthCorp Inc.'s commercial mortgage-backed securities (CMBS) primary servicer rating to CPS4 from CPS3 and its CMBS special servicer rating to CSS4 from CSS3.
In addition, both servicer ratings are placed on Fitch's Rating Watch Negative.
The servicer ratings downgrades and Rating Watch are due to the financial condition of Crown's parent, Crown Westfalen Bank, the uncertainty regarding the parent's business plan and Crown's lack of required Uniform Single Attestation Program reporting over the past two years.
In addition, Crown's U.S. new business over the past several years has shifted away from typical CMBS and toward the servicing of smaller commercial mortgage loans, Fitch notes.
On Sept. 14, Crown announced an agreement with Forum Partners to recapitalize its servicing operations. Fitch will monitor the progress of the recapitalization to determine its effect on Crown's U.S. servicer ratings and will provide additional commentary and/or take further servicer ratings actions as necessary.
As of Dec. 31, 2008, Crown was primary servicing four CMBS loans totaling $9 million. As of June 30, 2009, Crown was named special servicer for two small-balance commercial mortgage securitizations consisting of 754 loans totaling $731.3 million. At that date, Crown was actively special servicing 101 loans totaling $107.1 million and was responsible for 24 real estate owned assets valued at $28.9 million.
SOURCE: Fitch Ratings