OREANDA-NEWS. Fitch Ratings has affirmed the commercial mortgage special servicer rating of Torchlight Loan Services, LLC (Torchlight) at 'CSS2-'.

The affirmation of the special servicer rating reflects stabilized employee turnover; while still elevated, current turnover tracks ratios seen prior to the relocation of principal servicing operations to Miami, FL. In addition, employee training hours have improved significantly to an average of 43 hours per employee which is more commensurate with the tenure of the staff. The rating affirmation also considers the ongoing development and implementation of a new asset management system, and the company's level of internal controls relative to other Fitch rated servicers.

Fitch noted that the new asset management system, an extension of the Backshop originations system, has the potential to become a robust system similar to those used by servicers working out large volumes of loans. In addition, Torchlight is currently undergoing an internal operational audit conducted by an external accounting firm which is expected to be completed in early 2016.

Torchlight is the wholly owned special servicer of Torchlight Investors (previously ING Clarion Capital), which was formed in 1995 to provide investment management services to institutional clients seeking exposure to commercial real estate debt markets. While Torchlight performs special servicing predominantly for CMBS trusts in which its parent company's funds are controlling class holders, it is increasingly being appointed as a third-party special servicer with seven of its 33 named CMBS transactions coming from non-affiliates. The company was also named special servicer by a third-party for the first time on a Freddie Mac multi-borrower transaction of seven-year loans.

As of June 30, 2015, Torchlight's total CMBS servicing portfolio comprised 1,879 CMBS loans with an unpaid principal balance of $24.3 billion in 33 transactions. As of the same date, the company was actively special servicing 66 loans totaling $1 billion and managing 59 real estate owned (REO) assets with an underlying loan balance of $667.2 million.

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.