OREANDA-NEWS. Fitch Ratings assigns Fannie Mae, Multifamily (Fannie Mae) a first-time commercial mortgage special servicer rating of 'CSS2'. The rating does not address the single family residential aspect of Fannie Mae's business.

The rating reflects the high performance in overall servicing ability demonstrated by the multifamily mortgage division of Fannie Mae to work out defaulted commercial mortgage loans, primarily secured by apartment buildings with five or more units, acquired by Fannie Mae from its network of Delegated Underwriting and Servicing (DUS) Lenders.

Fannie Mae's special servicer rating reflects Fitch's assessment of the loss mitigation group's management team, asset management capabilities, internal controls, technology, financial strength, and knowledge of the multifamily lending environment combined with the support of its DUS network. The rating also considers Fannie Mae's use of third-party vendors to perform asset management and disposition services for real estate owned (REO) assets. While certain key special servicing functions are outsourced to vendors, Fitch noted Fannie Mae's REO team, which is highly experienced, performs a direct oversight of all assets and retains approval authority for all workout decisions. Additionally, all assets are maintained on Fannie Mae's asset management system, vendors are subject to annual performance reviews, and the REO team has the ability to perform the functions outsourced without interruption.

The rating also considers the company's financial strength backstopped by the U.S. Treasury. Due to the concentration of servicing for multifamily assets, Fannie Mae's servicer rating is limited to the '2' category.

As of June 30, 2015, Fannie Mae was the named special servicer for approximately 32,000 loans totaling $212 billion secured by multifamily properties of which 85% by balance are mortgage backed securities. As of the same date, the loss mitigation group was responsible for managing defaulted loans and REO assets inclusive of approximately $106 million of loans delinquent 60 days or more, representing .05% of the portfolio for the same period. The group has successfully resolved approximately $15 billion of loans since 1988, collateralized by properties throughout the U.S. resolved through foreclosure, liquidations, return to performing, and less frequently through modifications.