RCS Default Tools, Expertise, Pay Off
New York-A common-sense strategy of investing in advanced technology and highly qualified staff is paying off for Residential Credit Solutions Inc.
Citing highly experienced senior management team, effective loan administration processes and focused default management practices, Fitch Ratings assigned RCS a primary servicer rating for subprime product of RPS3-.
"RCS maintains a very seasoned management team across all functions within the company, many with shared prior experience in the acquisition and management of residential mortgage loans.
"RCS employs integrated technology and automation throughout the servicing platform and maintains sophisticated default management systems for decision support, timeline tracking and vendor communications," Fitch said.
According to CEO Dennis Stowe, the RCS servicing platform was created in anticipation of the mortgage crisis with specialized capabilities and capacity. The firm provides specialized servicing capabilities that allow users to reduce losses when dealing with delinquent and at-risk borrowers. It is based on a proactive approach to loan administration and loss mitigation.
Fitch noted that Mr. Stowe's 25 years of experience in mortgage servicing are an asset to his company. As president and COO of Saxon Capital he is credited for Saxon's subprime mortgage servicing operation into a platform of 300 professionals managing approximately $12 billion in assets.
Founded in December 2006 in anticipation of the mortgage crisis, RCS exclusively focuses on servicing, managing and purchasing credit-sensitive and servicing-intensive residential mortgage loans that currently represent approximately $1.1 billion in performing and nonperforming residential mortgage loans, and capacity to service in excess of 60,000 loans.
During an earlier interview Mr. Stowe, noted that once the government started taking action with the loan modifications, private banks were focusing on how to adequately market non-performing assets on their balance sheets so they can sell them. "We would bid assets today, but from we can see real estate values continue to decline and timelines for foreclosure continue to extend. Our bids are going to reflect those uncertainties," he said. As far as choosing to be cautious versus aggressive in their investing in non-performing loans, Mr. Stowe says RCS "will remain consistent" in bidding on the core disciplines the company has in place, "a box if you will, of what fits. As long as deals fit we'll bid them."
The national modification program is taking some implementation time as banks evaluate assets, which borrowers fit modification parameters, actually talk to borrowers, take in their calls and run through the analysis.Plus, he said, banks need to deal with an identifiable pool of borrowers that did not fit the mold and there's a different strategy for those loans, one being to get them off of their balance sheet. He says banks and servicers have to change the way they work, a challenge RCS was created to facilitate it by using high touch servicing technology when addressing loan modifications and analyzing borrower situations.
"It's what we were organized to do it's our business model." Mr. Stowe recognizes that being successful in assisting institutions who are still struggling to reach all their borrowers, is a double challenge when adding efforts to reach out delinquent borrowers asking for help motivated by government options. "We sort of have thrown another group of borrowers on top of an already underserved community." To best serve this market CRS aims to build a third party servicing branch that will have the right tools.