FCI Lender Services raises its residential special servicer ranking

Company shows what it takes on the compliance side to get an upgrade

Residential mortgage servicer FCI Lender Services received a ratings upgrade this week when Morningstar Credit Ratings increased the company’s ‘residential special servicer ranking’ to ‘MOR RS2’ from ‘MOR RS3.’

The company also received a ‘stable’ rating overall, with Morningstar crediting the servicer for enhancing its audit and compliance environment while maintaining a tenured management team and enhancing its risk-management methods. 

FCI achieved recognition on the compliance and risk management side by engaging a third-party audit firm to conduct its annual SOC 1 exam (SSAE 16). The company also hired an attorney to focus solely on compliance and honed in on making sure the servicer is compliant with the California Homeowner Bill of Rights – a piece of legislation that creates a private right of action for borrowers who can prove a servicer has violated one of the provisions of the state’s servicing guidelines.

The company also is focused on complying with the Consumer Financial Protection Bureau’s servicing guidelines.

"We also believe the company, with the potential for significant third-party servicing agreements based on current market trends, is well- positioned with excess capacity, both internally and via third-party vendors, if portfolio volume increases," Morningstar analysts wrote in their report.  

FCI functions as a licensed debt collector in 50 states and D.C. and also facilitates loan modifications for third-party clients.

The firm’s loan servicing operation in Anaheim Hills, Calif., currently has 70 employees.

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