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NEWS

U.S. Bank N.A. ABOVE AVERAGE Residential Mortgage Primary And Subprime Servicer Rankings Raised; Outlooks Are Stable


U.S. Bank N.A. ABOVE AVERAGE Residential Mortgage Primary And Subprime Servicer Rankings Raised; Outlooks Are Stable


OVERVIEW
  • We raised our overall rankings on U.S. Bank N.A. to ABOVE AVERAGE from AVERAGE as a residential mortgage primary and subprime servicer.
  • The rankings reflect enhanced business line controls necessary to operate effectively in a complex servicing environment as well as augmented servicing capabilities providing efficiencies and a degree of scalability to the operations.
  • U.S. Bank N.A. provides commercial and residential banking services including mortgage servicing with more than 2,800 employees across its servicing platform. Servicing operations are primarily located in Owensboro, Ky.; Cincinnati; and Irving, Texas.
  • The outlooks were revised to stable.
NEW YORK (S&P Global Ratings) Aug. 13, 2019--S&P Global Ratings today raised 
its overall rankings to ABOVE AVERAGE from AVERAGE on U.S. Bank N.A. as a 
residential mortgage primary and subprime servicer. The outlooks were revised 
to stable. 

Our rankings reflect:
  • An experienced senior leadership team that has remained stable following a number of changes stemming from its well-executed strategic transition over the last several years.
  • A sound risk management and control framework to monitor and detect risk.
  • Seasoning of its vendor management framework that includes a level of rigor and oversight that is comparable to similarly ranked peers.
  • A good level of technology throughout the operation.
  • Proactive collections and loss mitigation strategies, which are notably beneficial for managing the subprime portfolio.
  • Servicing performance metrics that are generally in line with similarly ranked peers.
  • Industry experience levels for some of the default management team that are lower than peers.
Furthermore, we note U.S. Bank N.A.'s strengthened business control practices; 
most notably, vendor oversight, change management, and procedures governance 
are increasingly vital to operate effectively in the current servicing 
environment and are now more in line with what we see from ABOVE AVERAGE 
ranked servicers.

We also recognized its investments in technology and process improvements 
across its loan administration functions. This provides efficiency, 
operational performance, and modernized self service capabilities with the 
ability to scale if needed.


Since our prior review (see "Servicer Evaluation: U.S. Bank N.A.," published 
Sept. 21, 2017), the following changes and/or developments have occurred:
  • U.S. Bank N.A. consolidated certain call centers to its Irving, Texas servicing site.
  • It completed the implementation and seasoning of certain first-line-of-defense control frameworks across all servicing lines of business.
  • It augmented its training capabilities with a new portal for career development and an expanded new-hire customer service training program.
  • During 2019, it transitioned to a new borrower portal that provides additional self-service functionality.
  • It transitioned handling of tax related calls to its tax vendor and implemented passive homeowner association lien monitoring.
  • It rolled out multiple loss mitigation strategies targeting borrowers in the process of selling their home and those affected by natural disasters and large scale life events.

The outlooks were revised to stable from positive reflecting our base-case 
expectation that U.S. Bank N.A. will continue to perform as an overall 
effective residential primary and subprime servicer. Its experienced senior 
management team continues to invest in technology and make the procedural 
adjustments necessary to administer its servicing portfolio in an increasingly 
complex environment. In addition, it continues to maintain practices and 
collections and loss mitigation strategies necessary for its subprime 
servicing portfolio.

The financial position is SUFFICIENT.

RELATED RESEARCH

  • U.S. Bancorp, July 11, 2019
  • Select Servicer List, June 25, 2019
  • Analytical Approach: Global Servicer Evaluations Rankings, Jan. 7, 2019
  • Servicer Evaluation: U.S. Bank N.A., Sept. 21, 2017

Secondary Contact:Leigh Stafford McLean, Farmers Branch + 1 (214) 765 5867;
leigh.stafford@spglobal.com
Servicer Analyst:Jason Riche, Farmers Branch + 1 (214) 468 3495;
jason.riche@spglobal.com
Analytical Manager, Servicer Evaluations:Robert J Radziul, New York (1) 212-438-1051;
robert.radziul@spglobal.com

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