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Fitch Downgrades Wells Fargo Master Servicing Rating

Fitch Ratings adjusted its servicer ratings for Wells Fargo’s (WFC) commercial mortgage-backed securities operations Thursday after withdrawing the CMBS ratings of Wachovia.

Wells Fargo, which acquired Wachovia in a $12.7bn deal that closed Jan. 1, now services all the CMBS transactions previously handled by Wachovia.

Fitch affirmed the bank’s primary servicer ratings, downgraded the master servicer rating, and upgraded the special servicer rating. Analysts said the new ratings reflect the combined platform’s experienced CMBS servicing management and staff.

The downgraded master servicer rating is due to the “challenges associated with the complexity of the legacy Wachovia servicing portfolio.” Fitch said there’s been some improvement under the Wells Fargo branch, but “the overall surveillance interaction has been uneven.”

Some confusion remains in reporting, as well, with the bank maintaining separate investor-reporting websites for each legacy portfolio, each with its own functionality, according to Fitch.

Wells Fargo commercial mortgage servicing portfolio as of June 30 includes 40,292 loans worth $462.8bn — of which 29,543 loans worth $377bn are CMBS, Fitch said.

Write to Jason Philyaw.

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