- Established commercial real estate collateralized debt obligation (CRE CDO) servicing expertise and recent entry into commercial mortgage-backed securities (CMBS) servicing: In Morningstar's view, RAIT has substantial experience servicing loans contained in CRE CDO portfolios through two well-seasoned transactions. In July 2013, the company issued a floating rate non-REMIC transaction marking its entry as a servicer and special servicer for a securitization with standard CMBS reporting requirements. Morningstar believes that RAIT has the operational capability to serve as a fully competent servicer on this transaction.
- Experienced professional staff and management: Morningstar believes the company has a well-experienced staff and management team. RAIT also had a low staff turnover rate in the past year.
- Proactive asset administration: Morningstar believes that RAIT, overall, has proactive and sound loan administration and asset management practices to address its current portfolio characteristics and associated servicing requirements. While it still services a relatively small portfolio, RAIT, in Morningstar's view, has experience servicing large and complex loan structures.
- An effective internal audit function: RAIT maintains an independent audit program, which consists of quarterly reviews that examine various loan administration and reporting controls. Based on Morningstar's review, recently completed audit reports have been satisfactory.
- Sound technology environment: In Morningstar's view, RAIT's current technology platform acceptably addresses its current servicing and reporting requirements, including its ability to manage a modest amount of special servicing work, and should enable it to soundly handle CMBS loans. The company plans to implement an integrated loan origination and asset management technology application to improve operating efficiency and enhance its data management, workflow, and reporting capabilities. To fulfill this objective, the company recently hired a full-time application developer.
- Modest, but overall successful, special servicing track record: RAIT serves as the special servicer only for its primary serviced loans. The company, currently and historically, has managed a relatively small volume of specially serviced assets. However, Morningstar believes that the company has an experienced loan workout staff, proactive resolution practices, sound asset recovery analytics, and, overall, has achieved solid resolution results.
- Controlled conflicts of interest management: Based on RAIT's stated practices, Morningstar believes that the company is acceptably managing any potential conflicts of interest in its position as a servicer and special servicer.
Morningstar Credit Ratings, LLC Affirms Its 'MOR CS3' Commercial Mortgage Primary Servicer And Special Servicer Rankings For RAIT Financial Trust
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