MReport November 2018

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54 | TH E M R EP O RT SERVICING THE LATEST O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T RoundPoint Mortgage Partners with Bay Point Advisors RoundPoint, a nonbank servicer, will take on the role of subservicer for Bay Point Advisors, which provides financing for small and mid- sized businesses. N orth Carolina-based nonbank mortgage servicing company RoundPoint Mortgage Servicing Corporation (RPMS) has been selected as a subservicing part- ner for Bay Point Advisors, LLC, an Atlanta-based private lender providing small and medium-sized businesses with secured, mezzanine, bridge, and DIP financing. "We are excited to add Bay Point to our diverse subservicing investor client base and we remain commit- ted to partnering with organizations such as Bay Point Advisors as they continue to expand businesses and communities," said Allen Price, SVP and Head of Business Development for RPMS, which services loans for a variety of investment banks, PE firms, hedge funds, mortgage banks, and credit unions. According to Charles Andros, President of Bay Point Advisors, "RoundPoint is very responsive to our needs and we are delighted by the service they provide." Bay Point's Secured Lending group lends to small and mid-sized businesses where traditional loan sources do not exist and designs custom funding solutions that meet the unique needs of each business. Kevin Brungardt, CEO for RPMS, said, "We are delighted to have been selected as Bay Point Advisors' subservicing partner and look forward to providing a world- class customer experience to its borrowers." RPMS currently services over $75 billion worth of mortgage assets, which are comprised of its own assets and loans sub- serviced for many other investor types nationwide. It is licensed to service loans in all 50 states, the District of Columbia, and the U.S. Virgin Islands and is publicly rated by Fitch Ratings (RPS3+, RSS3+), Standard & Poor's (Average), and Kroll Bond Rating Agency (BB). The company is a seller and ser- vicer for Fannie Mae and Freddie Mac. It is an approved single-fam- ily issuer and servicer for Ginnie Mae and maintains current MBS issuer eligibility. "RoundPoint has a good system in place to help private lenders like us assist business customers with expansions. We're excited about collaborating with RoundPoint for our subservicing needs," said Greg Jacobs, CFO at Bay Point Advisors. Outlook Stable for PHH, Says Fitch Ratings Fitch gives a favorable rating to PHH based on the firm's risk environment, compliance protocols, servicing technology investments, and experienced senior management. I n August, Fitch Ratings assigned an RPS3 U.S. residential primary servicer rating for prime product to PHH Mortgage Corporation (PHH), headquartered in Mount Laurel Township, New Jersey. The rating agency also assigned a stable outlook, reflecting PHH's experienced senior man- agement and staff, enterprise- wide risk environment, compli- ance protocols, and investments in its servicing technology. Fitch rates residential mortgage primary, master, and special ser- vicers on a scale of 1 to 5, with 1 be- ing the highest rating. Within some of these rating levels, Fitch further differentiates ratings by plus (+) and minus (-), as well as the flat rating. According to Fitch's findings as of June 30, 2018, PHH serviced approximately 586,609 loans with an unpaid principal balance of $129 billion, of which 550,942 loans repre- sented subservicing arrangements. Though Fitch did not pub- licly rate the credit and financial strength of PHH, it said the Fitch Financial Institutions Group had reviewed and provided an assess- ment of the servicer's financial condition. "A company's financial condition is a component of Fitch's servicer rating analysis," the agency said in a statement. According to Fitch, PHH, which announced its planned merger with Ocwen Financial Corp. in February 2018, is currently targeting closing the transaction by the third quarter of 2018. The merger includes migrating Ocwen's loan portfolio from its legacy proprietary system onto PHH's system, which utilizes Black Knight Mortgage Processing Solutions and LoanSphere Mortgage Servicing Package. "Fitch believes that the potential synergies realized with the merger, including an enhanced technology environment, best practices devel- oped for compliance, audit and loan servicing processes, multilayered disaster recovery, and business-con- tinuity contingencies, could prove beneficial if developed properly in the resulting single entity," the rat- ings agency said while assigning a stable outlook for PHH. In the first quarter of 2018, PHH completed its initiative of exiting capital-intensive businesses, exiting its private-label services- origination business to focus only on subservicing loans for others and maintaining a portfolio-reten- tion business. Some other factors that led to an enhanced rating for PHH included the servicer's robust enterprise risk- management hierarchy that identi- fied, monitored, and addressed risk, including proactive change- management processes, quality assurance, and quality-control protocols, as well as a multidimen- sional testing program. PHH utilizes a hybrid model for internal audit where oversight is retained among a small group of auditors internally and the bulk of audit work is cosourced to a third- party auditing firm. Fitch said it had not identified any instances of material noncom- pliance in both the Reg AB and USAP reports of PHH for the year ended Dec. 31, 2017. "RoundPoint has a good system in place to help private lenders like us assist business customers with expansions. We're excited about collaborating with RoundPoint for our subservicing needs," —Greg Jacobs, CFO, Bay Point Advisors

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