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Caliber Home Loans Inc. -- Moody's affirms Caliber Home Loans Inc. SQ assessments

Announcement - Servicer: Moody's affirms Caliber Home Loans Inc. SQ assessments

Global Credit Research - 03 Dec 2020

U.S. Residential Mortgage Servicer Assessment Action

New York, December 03, 2020 -- Moody's Investors Service has affirmed the servicer quality (SQ) assessments for Caliber Home Loans, Inc. (Caliber) at SQ2- as a primary servicer of prime residential mortgage loans (prime) and SQ3+ as a subprime and special servicer.

As of June 30,2020, Caliber's servicing portfolio totaled $148.8 billion in unpaid principal balance. The company continues to maintain stable growth for the servicing portfolio.

ASSESSMENT RATIONALE

We raised Caliber's collection assessment to strong from above average for prime. Subprime and special servicing remained at average. Collection metrics were strong for prime loans compared to peers. Although call center metrics for the company were stressed in March and April 2020 due to the COVID-19 pandemic, the metrics normalized during subsequent months.

We view the company's loss mitigation assessment as above average. The performance of loans with modifications were above average compared to peers. For borrowers affected by COVID-19, Caliber provided a self-service option for customers seeking a forbearance by providing access through its website. As of August 31,2020, approximately 63,000 residential borrowers were on an active forbearance plan.

We view Caliber's foreclosure and REO timeline abilities as above average. Since our last review, Caliber enhanced their bankruptcy monitoring process and foreclosure dashboard reports by adding more granular information. During the review period, loans in foreclosure and REO were placed on hold to comply with investor and regulatory COVID-19 moratoriums.

We view the company's loan administration function to be above average. The component assessment is based on solid payment processing, investor reporting and document management practices.

We view the company's servicing stability as below average. Caliber is owned by Lone Star Funds, a leading private equity firm with a focus on real estate and mortgage finance. The stability assessment incorporates Caliber's experienced management team and solid technology infrastructure, which is balanced by the company's private ownership structure and challenging operational environment. The mortgage servicing industry continues to be subject to a high level of regulatory scrutiny that may affect Caliber's servicing operations.

In response to the COVID-19 pandemic, the company successfully transitioned the majority (93%) of servicing employees to a remote working environment. Remote staff has access to critical systems and key servicing information.

The framework used in this analysis was "Servicer Quality Assessments for Servicers of Residential Mortgages" published in December 2019 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBS_1122183. Alternatively, please see the Framework list at https://www.moodys.com/research/List-of-NCRA-Frameworks--PBC_1178235 for a copy of this framework.

Please see www.moodys.com for any updates on changes to the lead analyst and to the Moody's legal entity that has issued the rating.

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.

Francis Wissman Vice President - Senior Analyst Structured Finance Group Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 William Fricke VP - Senior Credit Officer Structured Finance Group JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Releasing Office: Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653

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