Fitch Upgrades Hypocasso B.V. Dutch Residential Special Servicer Rating
Hypocasso is a Netherlands-based residential special mortgage servicer, 100% owned by Stater Participations B.V. (Stater Nederland B.V.; 'RPS1-' is 100% owned by ABN AMRO (A+/Negative/F1+)). The ratings take into consideration this financial support.
The upgrade is supported by the successful evolution of Hypocasso's special servicing processes. The company has introduced risk based borrower segmentation that is used to drive the order of contact priority amongst borrowers. A more stringent assessment of each borrowers' financial situation and new methods of dealing with accounts in arrears have also been introduced.
More recently, the revised special servicing approach has been supplemented by the implementation of the Tallyman arrears management system.
Hypocasso has also introduced a Quality Control (QC) team to ensure policies and procedures are correctly applied by the operational teams. As the team has become embedded within the company the number of files reviewed has gradually increased with typically 300 file reviews per month now being carried out. In Fitch's opinion, the file reviews by the QC team have helped to maintain the quality of the work performed by the operational teams. Fitch views the addition of this team positively and believes it further strengthens both the special servicing process and risk management framework within the company.
Fitch believes Hypocasso's special servicing processes now reflect what is seen at some of the higher rated special servicers in the UK, which is considered to have the most developed special servicing market in Europe. With this in mind, Fitch views the changes favourably and considers them to be best practice in the Dutch market.
The rating takes into consideration the high level of industry experience within the senior management team. An individual with substantial experience within the Dutch mortgage market was appointed as CEO in late 2013. The CEO is now supported by a COO and a CFO with an average 20 years industry experience. Fitch recognises that the new CEO has been the main driving force behind the changes at Hypocasso and has had a positive impact on portfolio performance.
The rating also reflects Hypocasso's supportive relationship with Stater. This relationship allows Hypocasso to benefit from Stater's resources, particularly internal audit, investor reporting and IT support. Hypocasso additionally uses the same business continuity plan and disaster recovery plan as their shareholder.
Fitch used its servicer rating criteria to analyse the servicer's operations and financial condition, including a comparison against similar Dutch servicers as part of the review process. The analysis is based on information provided to Fitch by Hypocasso.
As of 30 June 2014, Hypocasso's residential servicing portfolio totalled EUR2.22bn consisting of 13,228 loans.