DBRS Confirms First National Financial LP (Servicing)’s Primary, Master and Special Commercial Mortgage Servicing as Adequate

DBRS has today confirmed First National Financial LP (Servicing)’s (FNF or the Company) Primary Commercial Mortgage Servicing, Master Commercial Mortgage Servicing and Special Commercial Mortgage Servicing as Adequate.

Formed in 1988, FNF is headquartered in Toronto. The company originates and services commercial and residential mortgage loans, including commercial mortgage-backed securities (CMBS). Its servicing office is in downtown Toronto, with origination offices throughout Canada. FNF’s parent company, First National Financial Corporation, is currently rated BBB by DBRS with a Stable trend.

FNF’s strengths include its experienced commercial mortgage management and staff, its above-average employee training program and the financial strength of its parent. One of the Company’s challenges is its ability to effectively service its commercial mortgage loans with its relatively small servicing staff. FNF has addressed this issue over the past few years with its increased focus on automation of servicing tasks and reporting. Another challenge is the runoff of its CMBS portfolio. However, FNF management indicated its commitment to servicing its current CMBS portfolio, and its interest in servicing and originating CMBS loans in the future, should the Canadian CMBS market become active.

As of June 30, 2012, FNF’s servicing portfolio consisted of 5,113 loans totaling $17.49 billion, of which 671 loans, totaling $3.83 billion, were CMBS. Also at June 30, 2012, the Company was named master servicer for ten CMBS transactions and oversaw five third-party primary servicers. Finally, at June 30, 2012, FNF was named special servicer for eight CMBS transactions and was actively specially servicing three loans with an unpaid principal balance of $12.68 million.

The servicer evaluations reflect a comprehensive review of the FNF organizational structure, the management team, asset administration, loss management, technology, staffing and training, procedures and controls, and financial strength.

Notes:
All figures are in Canadian dollars unless otherwise noted.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

The applicable methodology is Commercial Mortgage Servicer Evaluations, which can be found on our website under Methodologies.