TEXT-S&P affirms Nationstar Mortgage servicer ranking

Mon Dec 10, 2012 5:22pm GMT

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OVERVIEW
     -- We affirmed our ABOVE AVERAGE ranking on Nationstar Mortgage LLC as a 
residential mortgage master servicer.
     --  Nationstar acquired the master servicing operation from Aurora Loan 
Services LLC on June 28, 2012. The outlook for the ranking is stable.
    
    Dec. 10 - Standard & Poor's Ratings Services today affirmed its ABOVE
AVERAGE ranking on Nationstar Mortgage LLC as a U.S. residential mortgage master
servicer. The outlook on the ranking is stable.

The ranking affirmation reflects our view that Nationstar has an extremely 
experienced staff, has experienced minimal turnover, and employs effective 
internal controls within its master servicing operation. Nationstar continues 
to maintain high servicing standards with regard to adhering to the pooling 
and servicing agreements and other documents that govern the securitizations 
it master services.

Major Ranking Factors

Strengths:
     -- Nationstar management has maintained the Seasoned and very 
knowledgeable management and staff from Aurora Loan Services LLC master 
servicing group.
     -- Nationstar takes a proactive approach in overseeing servicers 
adherence to Pooling and Servicing and other governing agreements.
     -- Nationstar has begun to work with servicers to review their 
obligations under OCC Consent Orders and settlement with US Treasury and 49 
attorney Generals.
 
Weakness:
     -- Portfolio runoff with limited new business opportunities due to a slow 
down in the securitization market.
 
Key Changes Since Last Report

Some of the key changes Nationstar has made since our last review include:
     -- Nationstar acquired the master servicing operation from Aurora Loan 
Services LLC acquired on June 28, 2012
     -- Enhanced oversight of servicers that were subject to consent orders 
with the OCC and settlement with the US Treasury and 49 attorney generals.
     -- Nationstar has enhanced its reporting including developing exception 
reports for foreclosures not in compliance
 
In our opinion, Nationstar has integrated the master servicing business 
acquired in its acquisition of Aurora Loan Services LLC successfully while 
maintaining the standards of our ABOVE AVERAGE ranking by maintaining Aurora's 
experienced management and staff as well as their infrastructure.

As a master servicer, Nationstar monitors the administration of residential 
mortgage loans serviced by primary loan servicers and represents the interests 
of certificateholders in mortgage-backed securities collateralized by those 
residential loans under management, which include prime; subprime, and 
subordinate loans.

We believe Nationstar has established the requisite technology and 
infrastructure to efficiently compile and consolidate loan-level data directly 
from servicers and subservicers to monitor the servicers' compliance with 
applicable regulations that  we consider to be prudent loan servicing 
standards, as well as adhere to specific investor requirements. 

In our opinion, Nationstar has experienced staff and effective internal 
controls within its master servicing operation. The company continues to 
monitor oversight through servicer scorecards and on-site reviews. 
Additionally, we believe Nationstar has made necessary adjustment to its 
operating process to oversee increasing loan-level default issues, including 
monitoring the servicers' participation in loss mitigation programs, such as 
the U.S. Treasury's Home Affordable Modification Program (HAMP), and has also 
adjusted its investor reporting to account for modifications..

The company continues to enhance its oversight through servicer scorecards and 
on-site reviews.

OUTLOOK

The outlook is stable. Standard & Poor's expects Nationstar to continue to 
serve as a quality residential loan master servicer

RELATED CRITERIA AND RESEARCH
 
     -- Revised Criteria For Including RMBS, CMBS, And ABS Servicers On 
Standard & Poor's Select Servicer List, published April 16, 2009. 
     -- Servicer Evaluation Ranking Criteria: U.S., published Sept. 21, 2004. 
     -- Select Servicer List.
 

Complete ratings information is available to subscribers of RatingsDirect on 
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 
by this rating action can be found on Standard & Poor's public Web site at 
www.standardandpoors.com. Use the Ratings search box located in the left 
column.
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