DBRS, Inc. (DBRS Morningstar) confirmed its MOR CS2 commercial mortgage special servicer ranking for Freddie Mac Multifamily Asset Management and Operations (Freddie Mac or the Company). The trend for the ranking remains Stable.
The confirmed ranking reflects Freddie Mac’s highly experienced staff; strong operational depth and well-tenured leadership; sound internal audit, governance, and compliance programs; and successful performance history resolving a relatively low volume of specially serviced multifamily loans. The Company has satisfactorily addressed elevated employee turnover over the past year through proactive hiring efforts.
Freddie Mac continues to demonstrate proactive and thorough surveillance and asset resolution practices. The ranking also acknowledges the Company’s effective technology applications and ongoing initiatives to streamline applications and enhance operational effectiveness.
As of June 30, 2022, Freddie Mac was the named special servicer on eight of its securitizations, which had 87 remaining loans with an aggregate $4.20 billion unpaid principal balance (UPB). The Company also serves as a special servicer for its balance sheet loan portfolio, which contained 3,453 loans with a total UPB of $47.05 billion as of June 30, 2022.
As of June 30, 2022, the active special servicing volume (all contained in the Company’s balance sheet portfolio) totaled $140.1 million by UPB and consisted of 12 loans (three nonperforming loans with an aggregate $68.0 million UPB and nine performing loans with an aggregate $72.1 million UPB) on heightened surveillance. During the first half of 2022, Freddie Mac resolved 18 loans with a total UPB of approximately $201.9 million, which consisted of 13 modified/corrected loans, four full payoffs, and one loan removed through a representation and warranty claim settlement. The portfolio has not contained any real estate owned properties since early 2018.
All rankings are subject to surveillance, which could result in rankings being raised, lowered, placed under review, confirmed, or discontinued by DBRS Morningstar.
DBRS Morningstar North American commercial mortgage servicer rankings are not credit ratings. Instead, they are designed to evaluate the quality of the parties that service commercial mortgage loans. Although the servicer’s financial condition contributes to the applicable ranking, its relative importance is such that a servicer’s ranking should never be considered as a proxy of its creditworthiness.
All figures are in U.S. dollars unless otherwise noted.
The principal methodology is North American Commercial Mortgage Servicer Rankings (September 8, 2022), which can be found on dbrsmorningstar.com under Methodologies & Criteria.
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