Fitch Affirms Selene Finance LP's U. S. RMBS Servicer Ratings
--U. S. residential primary servicer rating for subprime product at 'RPS3+';
--U. S. residential primary servicer rating for prime product at 'RPS3+';
--Special servicer rating at 'RSS3+'.
The rating affirmations and Stable Outlook are based on the effectiveness of Selene's platform, its strength as a high touch servicer and its strong leadership. Additionally, the company maintains effective proprietary technology systems. The ratings also take into consideration Selene's developing internal risk management framework.
During the review period the servicer transitioned to a new CEO, Joe Pensabene, and added other new executive leadership including EVP's of special servicing and business development. The executive team members possess over 25 years of industry knowledge and experience. Fitch is familiar with the new members as they have held senior management positions at other Fitch rated servicers. Since Mr. Pensabene's arrival, significant enhancements have been implemented throughout the servicing platform to aid in overall efficiencies, with a strategy of growing the business while expanding existing relationships.
Additionally, Selene has implemented its internal audit program utilizing a third party vendor. In general, transitions to robust internal audit processes can lead to an initial increase in audit findings, but establishment of a viable internal audit program is expected to ultimately be beneficial to the company.
Furthermore, the ratings take into consideration the financial condition of Selene, a non-Fitch rated entity, as financial condition is a component of Fitch's servicer ratings.
Selene is owned by Selene Ventures LLC (99% limited partner) and Selene Ventures GP LLC (1% general partner). Selene Holdings LLC is the parent company. Selene's servicing operations are located in Houston, TX, Horsham, PA and Jacksonville, FL.
As of March 31, 2016, Selene serviced over 63,000 loans with an unpaid principal balance (UPB) of $9.4 billion. Selene's portfolio by UPB comprised 46% government-sponsored enterprise (GSE), 40% subprime, 12% prime, and 2% other.
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