NEW YORK--(BUSINESS WIRE)--
Fitch Ratings has assigned the following U.S. residential mortgage
servicer ratings to Deval, LLC's (Deval) reverse mortgage operations:
--Initial U.S. residential primary specialty-reverse mortgage servicer
rating 'RPS3-'; Outlook Stable.
Deval was established in 2002 as a limited liability company by Deborah
Garcia-Gratacos, its current chief executive officer, holding a majority
ownership interest in the firm. The servicer provides financial services
to public, private and institutional commercial clients with loan
servicing, and advisory services in real estate, finance, and management
consulting. The servicer has its headquarters in Dallas, Texas and
maintains offices in the Washington, DC metro area, San Juan, Puerto
Rico, and Palm Coast, Florida.
The initial rating is based on Deval's evidenced abilities in servicing
federal home administration's (FHA) home equity conversion mortgage
(HECM) (reverse mortgage) products, its effective senior management
team, adequate systems, and controls and processes. The rating also
considers the pace of growth and ability of the servicer to diversify
its mortgage servicing platform. In addition, the rating incorporates
Fitch's overall concerns for the U.S. residential servicing industry
which include the ability to maintain high performance standards while
addressing the rising cost of servicing and changes to industry
practices, mandated by regulators and other parties.
Since December 2005, Deval has been working as a component servicer
supporting several financial institutions and in March 2012, began
servicing reverse mortgage products. The servicer indicates that it is
currently under contract with the U.S. Department of Housing and Urban
Development (HUD), for a multiple-year, annual renewable contract. Deval
is responsible for the full servicing of the reverse mortgage loans,
from the initial set-up through the pay-off or conveyance. As of May 31,
2014, Deval is servicing 19,077 reverse loans totaling $3.9 billion.
The servicer maintains a staff of 72 full-time employees (FTEs)
operating out of the Dallas, TX, location to manage its HUD-dedicated
functions which include the reverse mortgage servicing responsibilities
as well as managing the forward mortgage partial claim portfolio of
approximately 300,000 loans and monitors 630,000 FHA HECM endorsed loans
for over 115 lenders nationwide.
While it has a limited history servicing reverse mortgage loans, Deval
has a proven track record of effectively managing third party servicing
transactions and has experience in providing component servicing and/or
other mortgage servicing support through its platform. The servicer is
in the process of expanding its operation and will be increasing its
traditional mortgage servicing functions.
Fitch observed that Deval has strong functional and group managers and
is adequately staffed for its size and the type of portfolio being
serviced. Fitch believes that Deval's recruiting, staffing, and training
programs adequately support its reverse mortgage servicing operations.
While the company has limited financial strength it has adequate capital
for the size of its current operation. Fitch will continue to monitor
Deval's expansion and its success in growing its reverse mortgage
relationships and its traditional mortgage operations.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Rating Criteria for Structured Finance Servicers', Jan. 30,
--'Rating U.S. Residential and Small Balance Commercial Mortgage
Servicer Rating Criteria', dated Jan. 31, 2014.
Applicable Criteria and Related Research:
Rating Criteria for Structured Finance Servicers
Rating Criteria for US Residential and Small Balance Commercial Mortgage
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New York, NY 10004
Sandro Scenga, +1-212-908-0278 (New York)
Source: Fitch Ratings