S&P: Wells Fargo Bank N. A. STRONG Residential Mortgage Master Servicer Ranking Affirmed; Outlook Is Stable
Our ranking reflects:A well-experienced management team and staff. Strong risk management and control environment, which includes proactive measures and controls. The master servicing infrastructure includes a high level of automation. Ongoing reviews to identify gaps and opportunities for process improvement. The servicer oversight program is comprehensive, includes ongoing risk monitoring, and promotes prompt issue resolution. The master servicing portfolio related to securitizations continues to decline in volume, which is consistent with other master servicers we rank. However, WFB was named master servicer on multiple issuances in 2016. Since our prior review (see "Servicer Evaluation: Wells Fargo Bank N. A," published Sept. 30, 2015), the below changes have occurred: WFB has enhanced its cash reconciliation processes as a proactive measure to prevent remittance variances. Centralized its anti-money laundering (AML) and know your customer (KYC) teams within shared services at the enterprise level. Reorganized the servicer reporting and collateral integration teams under the servicer management group as part of its effort to centralize areas with servicer interaction. Established a servicer operations support team to address production issues in real time. Transitioned organizational reporting of its quality assurance testing from the operations team to division leadership to provide further independence. Named master servicer of multiple private label issuances in 2016.The outlook for the ranking is stable. We believe that WFB will continue to operate as an effective master servicer. WFB's master servicing division remains committed to its methodical approach to driving efficiency through automation and simplification while also improving quality. The master servicing portfolio continues to decline in volume; however, the residential mortgage organization has diversified into other products and services where it can leverage its expertise and platform. Additionally, WFB remains competitive in the new issuance market and was named master servicer of multiple issuances in 2016.