TEXT-S&P: big changes for commercial servicers in past 5 years

Tue Nov 13, 2012 4:23pm EST

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 research_request@standardandpoors.com. 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.