The higher level of activity in the servicing market, as a result of mergers, acquisitions, transfer of servicing rights, and bankruptcies, has increased the focus on the servicers and the effect they have on the performance of structured transactions. The potential increase of defaults in portfolios, due to general economic trends, has caused all market participants to agree on the elevated importance of this role.
In 1999, Fitch introduced ratings for residential mortgage servicers that included primary, master and special servicer ratings. Fitch has been rating commercial loan servicers since 1992 and has recently announced the development of servicer assessments for a variety of Asset Backed products. This article discloses the most significant measures used in the evaluation of servicer's abilities in default loan management.
