OREANDA-NEWS. Fitch Ratings has assigned RED Mortgage Capital, LLC (RED) a commercial primary servicer rating of 'CPS2-'.

The primary servicer rating reflects RED's long history of commercial real estate (CRE) mortgage servicing experience, particularly for government sponsored entity (GSE) multifamily and healthcare properties. Also considered are the company's experienced and tenured management and staff, appropriate control environment and strong technology platform. The recommendation also considers the financial condition of ORIX Corporation, parent of ORIX USA Corporation which owns 84% of RED's parent, RED Capital Group.

Fitch found RED to maintain a robust technology environment, including McCracken Financial Solution's Strategy CRE servicing application supplemented with ancillary applications that automates many servicing functions and creates necessary efficiencies as the platform grows. Automated operations, such as financial statement analysis and risk ratings are subject to appropriate controls via asset manager review and analysis.

As of March 31, 2015, RED's total servicing portfolio consisted of 1,933 loans totaling $16 billion, all of which were multifamily or healthcare related properties. RED is a CRE servicer for GSE assets with the portfolio comprised 99% of Fannie Mae, FHA/GNMA and 1% balance sheet loans. Balance sheet loans are transitional and short-term in nature and expected to be eligible for traditional GSE financing once stabilized. RED anticipates diversifying its servicing platform through its recent designation as an approved Freddie Mac small balance loan seller/servicer and could enter the CMBS primary servicing market in the future. In addition, RED could expand into third-party servicing independently or through its affiliation with ORIX USA.

The servicer rating is based on the methodology described in Fitch's reports 'U.S. Commercial Mortgage Servicer Rating Criteria,' dated Feb. 14, 2014, and 'Rating Criteria for Structured Finance Servicers' dated April 23, 2015, available on Fitch's web site www.fitchratings.com.