TEXT-S&P affirms Dovenmuehle Mortgage servicer ranking

Tue Nov 20, 2012 1:08pm EST

OVERVIEW

     -- We affirmed our ABOVE AVERAGE ranking on Dovenmuehle Mortgage Inc. 
(DMI) as a residential mortgage loan primary servicer.
     -- DMI has begun to use BackInTheBlack (BITB) loss mitigation platform, 
which provides a more efficient way to offer, coordinate, and control, loss 
mitigation alternatives between their borrowers and servicing clients.
     -- DMI has significantly improved turnover numbers throughout the 
organization.
 
NEW YORK (Standard & Poor's) Nov. 20, 2012--Standard & Poor's Ratings Services 
today affirmed its ABOVE AVERAGE ranking on DMI as a residential mortgage loan 
primary servicer. The outlook is stable. 

We also affirmed our ABOVE AVERAGE subrankings for management and organization 
and loan/asset administration. The financial position is Sufficient.

KEY RANKING FACTORS
Strengths:
     -- Focus on customer service and proactive default management through 
both traditional methods and innovative programs in an effort to provide 
maximum return for their subservicing clients and a positive experience for 
borrowers.
     -- Highly experienced management with industry leadership experience 
 
Weakness:

     -- The  BITB new loss mitigation platform has just recently been deployed 
and currently has  limited performance history
 
KEY CHANGES SINCE OUR LAST REVIEW:

     -- DMI has begun to use BackInTheBlack (BITB) mitigation platform, which 
provides a more efficient way to offer, coordinate, and control, loss 
mitigation alternatives between their borrowers and servicing clients.
     -- DMI enhanced its management by creating a compliance manager and 
hiring an experienced training manager.
     -- The company began providing a single point of contact (SPOC) for its 
clients to comply with GSE requirements.
 
The overall servicer ranking reflects our opinion of the company's 
knowledgeable and experienced management team, an effective systems 
environment, efficient internal controls, and proficient default management 
strategy.

DMI is a third-party mortgage servicer, and we believe remains focused on the 
importance of providing its clients and their borrowers with premier service. 
The company is one of the leading subservicers in the U.S., with more than 100 
subservicing relationships. 


The ranking reflects the company's seasoned management team, solid level of 
automation, and stable internal controls. Metrics provided by Dovenmuehle 
through Standard & Poor's SEAM questionnaire indicate that the company 
compares favorably with similarly ranked residential mortgage industry 
participants. Dovenmuehle has multiple audit channels in place to strengthen 
internal controls as they were no major audit findings.

DMI is monitoring emerging servicing standards to assure compliance to meet 
legal standards. DMI has implemented SPOC on a limited basis for their clients 
as needed including for GSE loans.

The company has significantly improved its turnover numbers, which were a 
concern during our previous review. In the first six months of 2012, there was 
no turnover of management and approximately 10% staff.

In our opinion, DMI effectively seeks to provide a balance between optimizing 
subservicing client interests and keeping borrowers in their homes. Data we 
collected from the company through Standard & Poor's proprietary SEAM 
questionnaire reflects that DMI's reported servicing metrics are comparable 
with those of its industry peers.

Outlook
The outlook is stable. DMI continues to grow its portfolio and management 
maintains its commitment to growth primarily through targeted subservicing 
markets, which include credit unions and community banks by capitalizing on 
the company's experienced loan administration management, capable servicing 
systems, and efficient internal controls

RELATED CRITERIA AND RESEARCH
 
     -- Revised Criteria For Including RMBS, CMBS, And ABS Servicers On 
Standard & Poor's Select Servicer List, April 16, 2009 
     -- Servicer Evaluation Ranking Criteria: U.S., Sept. 21, 2004 
     -- Select Servicer List
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