Fitch Affirms Roundpoint Mortgage Servicing Corp's Residential Mtge Servicer Ratings; Outlook Stable

Fitch Ratings has taken the following actions on the U.S. residential mortgage servicer ratings for RoundPoint Mortgage Servicing Corporation (RPMS):

--U.S. residential primary servicer rating for subprime product affirmed at 'RPS3+', Outlook Stable

--U.S. residential special servicer rating affirmed at 'RSS3+', Outlook Stable.

The rating actions are based on RPMS's solid servicing performance, strong staffing and recruiting, and its effective borrower service environment focusing on instilling customer service disciplines throughout the organization through the 'White Glove' program. For the period ended, Dec. 31, 2013, the servicer successfully attained its managed growth objectives, increasing its servicing portfolio, year over year, to approximately $19.08 billion from $5.95 billion. This represented an increase of 172% by loan count and was achieved primarily through the various loan servicing purchase arrangements that RPMS participates in.

The ratings also take into consideration RPMS's risk control environment. The servicer was fully compliant with its 2013 Regulation AB report and indicated that there were no outstanding regulatory issues concerning its servicing platform. In addition, the ratings reflect RPMS's limited experience servicing loans in private RMBS transactions. However, the servicer has demonstrated its capabilities to manage these transactions and indicated that they intend to do this in the near future. The ratings also reflect the financial condition of RPMS, a non-publicly rated entity, as financial condition is a component of Fitch's servicer ratings.

Finally, the ratings reflect Fitch's overall concerns for the U.S. residential servicing industry. Chief among them is the ability to maintain high performance standards while addressing the rising cost of servicing and changes to industry practices, mandated by regulators and other parties.

RPMS's servicing operations are headquartered in Charlotte, NC, with an additional site in Dallas, TX. Since the prior review, the servicer created three vice president positions, covering default administration, asset management and analytics. Also, with the February 2014, departure of the chief risk officer, the servicer is in the process of recruiting a replacement but, in the interim, has instituted the necessary changes to manage its internal control processes. During the review period, the servicer increased its training and succession planning for its leadership teams and incentivized the customer service staff as a means of improving quality and retention objectives. In addition, the servicer implemented a new dialer system and made several enhancements to its websites to facilitate ease of use by its mortgagors. As of Dec. 31, 2013, RPMS serviced over 112,960 loans with a UPB of $19.08 billion. The portfolio is further broken down as 85,206 agency loans totaling $15.9 billion and 27,754 subserviced loans for approximately $3.18 billion. The portfolio also includes 19,258 special serviced loans totaling $3.16 billion.

RPMS is a wholly owned subsidiary of RoundPoint Financial Group, Inc., which is a part of the Tavistock Group, an international private investment organization founded more than 36 years ago. The servicer, which began operations in 2007 primarily as a special servicer, retains the mortgage servicing rights of new loans originated by its sister company, RoundPoint Mortgage Company. The servicer is an approved servicer of FNMA, FHLMC, GNMA, FDIC, FHA, and VA loans.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Rating Criteria for Structured Finance Servicers' (Jan. 30, 2014);

--'U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria' (Jan. 31, 2014).

Applicable Criteria and Related Research:

Rating Criteria for Structured Finance Servicers

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=731750

Rating Criteria for US Residential and Small Balance Commercial Mortgage Servicers

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=731747

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=827221

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