S&P Cites Servicer Outsourcing Standards

Mortgage servicers should maintain criteria for selecting and dismissing outsource providers and vendors, ensure fee disclosure, and maintain a quality control program to monitor performance, according to Standard & Poor's Ratings Services.Servicers who want to achieve or maintain S&P's Select Servicer status will be expected to "adhere to certain basic guidelines with respect to outsourcing vendor management and fee disclosure," S&P said. Their selection and dismissal criteria should be objective and transparent and should include "minimum key performance indicators," the rating agency said. In addition, they should establish procedures to ensure that any fees presented for reimbursement to a guarantor "represent a true and accurate rendering of actual monies expended," net of certain cost reductions, S&P said. Quality control should measure performance as well as compliance with state and federal statutes, the rating agency said. S&P can be found online at http://www.standardandpoors.com.