Fitch Ratings awarded Oakwood Global Finance a European residential master servicer rating and special servicer rating.
Oakwood has been awarded two specific ratings: a residential special servicer rating of 'RMS2', making it the highest Fitch-ranked provider of outsourced special servicing in the U.K.; and a residential master servicer rating of 'RSS2-', which is the first time Fitch has ever assigned such a rating in Europe.
The ratings are based on the industry experience of senior management and the innovative servicing strategies employed by the company. These strategies include the continued proactive risk-grading and behavioral scoring of loans, allowing the company to efficiently deliver on specific arrears strategies.
The use of a loan modification calculator helps Oakwood to assess the best work-out strategy for particular loans. A large focus of the master servicing team is the oversight of the U.K. primary servicer, Homeloan Management Ltd. (HML).
Oakwood employs a dedicated cash manager that reviews all principal and interest reporting completed by HML, and has also developed proprietary cash management software that assists with identification of errors and discrepancies.
Oakwood utilizes HML for most of its mortgage administrative activities. A small portfolio of prime buy-to-let loans is administrated by Western Mortgage Services (WMS). HML and WMS staff have a very limited mandate to make credit or debit decisions, the majority being referred to Oakwood before proceeding.
As a special servicer, Oakwood has been providing expert management of non-performing loans to third party clients, including a major investment bank, for more than four years. Fitch's assessment of Oakwood's special servicing capability drew particular attention to the high levels of industry experience of senior management and the innovative servicing strategies employed by the company's first, and currently only, rated master servicer in Europe.
"This is a tremendous endorsement of the operations we have developed and refined over the last four years," said Mike Culhane, CEO at Oakwood. "We have a longer track record, more scale and greater experience than any other provider in the sector and our ratings underscore the fact that our proactive approach to servicing is highly relevant in today's challenging environment. Arrears and repossessions are headline news and to achieve such a high rating is a testament to our Special Servicing team's ability to manage cases effectively, sensitively and in compliance with ever changing legal and regulatory requirements."Oakwood is now looking to extend its special servicing and master servicing offerings and is in discussions with new investors, such as hedge funds acquiring mortgage portfolios, as well as banks and building societies looking to improve their ability to service troubled assets, or investment banks managing out existing positions.
"In many organizations, servicing has traditionally taken second place to new business origination," Culhane said. "As the economy deteriorates, these organizations are being left with assets they are ill-equipped to manage. We see a huge market opportunity in providing our outsourced Services to a wider range of clients who do not have the resources or expertise to deliver high quality servicing internally."
