Lehman Outfit Aurora Loan Services Gets Servicer Ratings Boost

Fitch Ratings said late yesterday that it has boosted the special and master residential servicer ratings for Aurora Loan Services, the mortgage servicing arm of Lehman Brothers. Aurora saw its special servicer rating upgraded to ‘RSS2’ from ‘RSS2-‘; while its master servicer rating was upgraded to ‘RMS1’ from ‘RMS1-‘. Its primary servicer ratings remained unchanged. In raising Aurora’s servicing ratings, Fitch cited a move into a new 175,000 sq ft building equipped with voice over internet protocol (VoIP), and Aurora’s newly-established an east coast presence with the addition of a third servicing site in Indianapolis. The company also has added executives in default loan processing and finance, not surprising given current market conditions. The master servicing operation took some significant steps forward as well: it implemented a bond administration system, formed an investor relations group, started a high risk group in default advisory, developed a servicer report card and created a redundant SBO2000 disaster recovery site in Irvine, CA. At the time of Aurora’s inception, Lehman’s primary operating objective was to manage the risk associated with servicing a significant portion of the residential mortgage loans and mortgage servicing rights owned by Lehman. That scope has since increased to encompass management of all the residential mortgage loans and servicing rights owned by Lehman through the establishment of a master servicing department, while also including loans owned by third parties. As of Aug. 31, 2007, Fitch noted that the total primary and special servicing portfolio at Aurora stood at 525,900 loans totaling approximately $112.7 billion, consisting of 271,400 Alt-A loans totaling $69.4 billion, 13,500 subprime loans totaling 2.2 billion and a combination of 241,000 FHA, VA, conventional conforming, scratch and dent home equity, Alt-B, and non-guaranteed SBA loans totaling $41.1 billion. The master servicing portfolio had grown to 1.04 million loans totaling $209 billion, Fitch said. For more information, visit http://www.fitchratings.com.