September 17, 2012 / 6:22 PM / 5 years ago

TEXT-S&P affirms CitiMortgage residential mortgage servicer ranking

OVERVIEW

     -- We affirmed our ABOVE AVERAGE ranking on CitiMortgage Inc. as a 
residential mortgage master servicer.
     -- The company is proactive in adjusting its practices to meet market 
conditions including monitoring its servicers' participation and compliance 
with recent regulatory requirements.
     -- The outlook for the ranking is stable.
 
NEW YORK (Standard & Poor's) Sept. 17, 2012--Standard & Poor's Ratings 
Services today affirmed its ABOVE AVERAGE ranking on CitiMortgage Inc. (CMI), 
a wholly owned indirect subsidiary of Citigroup Inc., as a U.S.
residential mortgage loan master servicer. The outlook on the ranking is stable.

The ranking affirmation reflects our view that CMI has an extremely 
experienced staff, has experienced minimal turnover, and employs effective 
internal controls within its master servicing operation. CMI continues to 
maintain high servicing standards with regard to adhering to the pooling and 
servicing agreements and other documents that govern the securitizations it 
services.

KEY RANKING FACTORS

Strengths:
     -- A seasoned and very knowledgeable management group. 
     -- CMI provides oversight of its servicers that are subject to consent 
orders they agreed to with their regulators. 
     -- CMI is proactive in monitoring costs that are being passed to 
securitization trusts, such as trustee expenses related to the recording of 
mortgages in the Mortgage Electronic Registration System (MERS) and internal 
expenses.

Weakness:
     -- While CMI has enhanced its technology since our last review, other 
servicers we review have more advanced tools to analyze and compile the 
loan-level data they receive from their servicers.

Key changes since Standard & Poor's published its last report on CMI in June 
2011.
     -- Enhanced oversight of servicers, including CMI's primary servicing 
operation, that are subject to compliance with consent orders they signed with 
the Office of the Comptroller of the Currency (OCC).
     -- CMI has enhanced its reporting; enhancements including developing 
exception reports for foreclosures not in compliance.
     -- CMI has expanded the frequency and thoroughness of its outside audits 
of servicers.
     -- CMI has enhanced its Web interface to provide investors the ability to 
analyze loan performance.
 
As a master servicer, CMI monitors the administration of residential mortgage 
loans serviced by primary loan servicers and safeguards the interests of 
investors in residential mortgage-backed securities (RMBS). CMI's portfolio 
continues to decrease as the securitizations it manages pay down. CMI has 
established the requisite technology and infrastructure to, in our view, 
efficiently compile and consolidate loan-level data directly from its 
servicers and monitor the servicers' compliance with applicable regulations 
and prudent loan servicing standards, as well as adherence to specific 
investor requirements.

The company continues to enhance its oversight through servicer scorecards and 
on-site reviews.

OUTLOOK

The outlook is stable. Standard & Poor's expects CMI to continue to serve as a 
quality residential loan master servicer. As securitizations pay down, 
however, CMI will be challenged to manage the size of its staff and 
infrastructure.

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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