TEXT-S&P: big changes for commercial servicers in past 5 years
Nov 13 - Standard & Poor's Ratings Services has reviewed commercial servicer data from its Servicer Evaluation Analytical Methodology (SEAM) questionnaires since December 2007 to determine trends in the industry over the past five years, and published its findings in a recent report. The past five years of SEAM data show considerable shifts in portfolio sizes, personnel counts, and delinquency levels over time. "The property market's boom and crash spurred a flurry of loan originations and securitizations between 2006 and 2008, followed by precipitous declines in primary servicing, rapid increases in special servicing, and falling property performance and values--not to mention regulatory changes, increases in reporting and transparency requirements, and the introduction of additional reviews and parties into servicers' best practices," said Standard & Poor's servicer analyst Mark Goldberg. The report noted that between 2007 and June 2012, primary and master servicers' portfolios shrank overall as loan originations dropped, while special servicers' portfolios grew in step with the rise in troubled loans. Accordingly, staffing levels dropped for primary and master servicers, while special servicing staffs generally kept pace with the rise in assets. Servicers and system vendors have updated their technology to incorporate greater loan-level capabilities and other enhancements to meet stricter investor reporting requirements. Mr. Goldberg said, "All told, commercial mortgage servicers have typically responded by scaling down or reorganizing staff, enhancing and expanding their servicing systems, modifying internal procedures, and strengthening their quality controls and compliance monitoring." The full report, "Focus On Servicing: The Past Five Years Bring Big Changes For Commercial Servicers," was published Nov. 13, 2012, on RatingsDirect on the Global Credit Portal. The report is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to firstname.lastname@example.org. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com.