Fitch Ratings maintains a negative outlook on the mortgage servicing industry due to uncertainty in the residential servicing industry, especially with increasing servicing costs, changes in industry practices and the coming regulatory mandates.
However, Fitch Ratings maintains a stable outlook for Residential Credit Solutions because of its high-touch servicing model, improvement in metrics for customer service and effective default capabilities, which is highly successful in establishing borrower contact.
RCS, a Dallas/Fort Worth special mortgage servicer also remains focus on credit-sensitive and servicing with residential mortgage assets, something Fitch says is positive for the companies ratings..
The RCS portfolio consists of more than 39,000 loans, totaling $6.5 billion. Also, the company has 16,000 subprime first and second lien mortgages, totaling $3 billion, with 80% of its portfolio under special servicing arrangements, as of June 2012.
Fitch rates residential mortgage primary, master and special servicers on a scale of 1 to 5, with 1 representing the highest rating.
For RCS, the Fitch U.S. residential primary servicer rating for subprime product is 'PS2- and the special servicer rating is maintained at RSS2-.