Fitch Ratings has upgraded the U.S. residential primary servicer rating for Vericrest Financial Inc. from RPS3- to RPS3.
Although Vericrest has a limited operating history under the new ownership, non-publicly rated entity Lone Star Funds (Lone Star), the upgrade reflects Vericrest's seasoned management team, reliable loan administration, enhanced default management practices and strong technology platform, Fitch says.
Vericrest is a privately held, financial services company primarily engaged in the servicing of residential mortgage and consumer finance loans. Lone Star is currently using Vericrest as a captive servicer for its U.S. residential mortgage acquisitions.
In July, Vericrest acquired certain servicing assets from the estate of Accredited Home Lenders, consisting of approximately 51 employees, including experienced default and call center managers, and effective servicing technology. Further, Vericrest expanded its servicing presence to include a servicing site in California, in addition to its servicing headquarters, located in Oklahoma.
As of June 30, Vericrest managed 59,397 loans with an unpaid principal balance of over $7.8 billion, of which 73.7% are serviced for private residential mortgage-backed securities, 22.2% are owned and 4.1% are third-party serviced by loan volume.
During the past year, Vericrest has continued to enhance its servicing platform through technology improvements, expanded call-monitoring programs and enhanced default management programs that include a specialized group to proactively monitor newly modified loans. However, at the time of the Fitch review, Vericrest was in the process of finalizing the deployment of its internal audit function.
Fitch has reviewed the Vericrest servicing operations and believes that Vericrest provides a scalable servicing platform with the appropriate staff, processes and technology to continue to service its existing portfolio. However, Fitch will continue to monitor Vericrest's progress in finalizing its internal audit structure and the performance of its recent and planned servicing initiatives.
SOURCE: Fitch Ratings