This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Morningstar Credit Ratings, LLC Affirms Its 'MOR CS1' Commercial Mortgage Primary, Master, And Special Servicer Rankings For Midland Loan Services

Stocks in this article: MORN

NEW YORK, Dec. 19, 2013 /PRNewswire/ -- Morningstar Credit Ratings, LLC today affirmed its 'MOR CS1' rankings for Midland Loan Services (Midland) as a commercial mortgage primary, master, and special servicer. The forecast for all three rankings remains Stable. The affirmed rankings reflect Morningstar's assessment of Midland's operational infrastructure and portfolio administration capabilities. In particular, the affirmed rankings are based on the following composite factors:

  • Expertise with client and investor reporting: Midland has a high degree of experience and a successful performance record as a commercial mortgage-backed securities (CMBS) primary and master servicer with respect to timely and accurate reporting, investor satisfaction, responding to information requests, the overall quality of asset-level reporting content, controlled advance determination procedures, proactive sub-servicer oversight and auditing, investor website functionality, and the management of other duties covering large and complex transactions. Midland did not incur any material reporting errors or restatements during 2012 or the first half of 2013. In addition, Morningstar holds a positive opinion of Midland's CMBS master servicing capabilities as demonstrated by the company's capacity to meet its ongoing advancing responsibilities and representations regarding its financial resources.
  • Excellent technology: Midland has effective technology tools, which provide high levels of automation and centralized data management, to accommodate a large and diverse servicing portfolio with a high degree of operating efficiency.
  • Solid management depth: Midland has overall operational stability and a significant amount of industry experience among its management and portfolio management staff, although the servicing staff as a whole has less-than-average industry-related experience compared with other master servicers Morningstar reviews. Midland continues to maintain a centralized servicing operation within the United States and does not use offshore servicing functions.
  • Comprehensive audit program more aligned with its parent audit requirements: Midland has improved upon its already comprehensive audit program by aligning the depth of review with its parent bank's audit program. As a result, Midland undergoes more stringent security-level testing related to its technology and servicing operations as a whole. An independent quality control and regulatory compliance department examines a broad range of loan administration and portfolio management processes, and is supplemented with a number of performance monitoring activities and compliance routines embedded in the company's daily workflow practices.
  • Well-controlled asset management practices and effective conflicts of interest management: Midland demonstrates best practices for proactive asset management and portfolio oversight, and maintains effective policies and procedures to manage conflicts of interest. A subsidiary of Midland's parent bank, The PNC Financial Services Group, Inc., has an approximate 20 percent ownership interest in BlackRock, Inc., which invests in CMBS. With respect to conflicts of interest, Midland stated that, as part of a regulated bank, it must comply with federal regulations in its interaction with affiliates, and as a result, must treat BlackRock the same as any other non-affiliated entity. Overall, Morningstar views Midland as a special servicer that operates essentially without the potential conflicts of interest inherent in many CMBS transactions in which the special servicer has a close affiliation with the first loss (B-piece) investor. In addition, Midland does not use affiliates to purchase assets from securitization trusts as the company's business model requires it to act as an independent, third-party special servicer without any investment in subordinate CMBS.
  • Continuing successful performance as a special servicer: Midland continues to have a very successful asset resolution performance record as a special servicer and is proactive, particularly with respect to monitoring advances and asset valuations.

As of June 30, 2013, Midland's combined primary and master servicing portfolio, inclusive of shared servicing, was approximately $309 billion based on aggregate unpaid principal balances (UPB) and 33,124 loans, representing 22 percent and 7 percent increases by UPB and loan count, respectively, compared with June 30, 2012. As of June 30, 2013, Midland was the master servicer on 96 CMBS transactions, primary/master combined servicer on 183 CMBS transactions, and the named special servicer on 129 CMBS transactions. This compares with Midland's 67 CMBS transactions as the master servicer only, 139 CMBS transactions as the primary/master combined servicer, and 113 CMBS transactions as the named special servicer, as of June 30, 2012.

As of June 30, 2013, Midland's entire CMBS portfolio consisted of 10,993 loans with an aggregate UPB of $138 billion, compared with 10,688 loans with an aggregate UPB of $116 billion as of June 30, 2012. Additionally, as of Nov. 18, 2013, Midland was the named servicer on Invitation Homes 2013- SFR1, a single-family rental securitization collateralized by 3,207 single-family rental properties with an aggregate UPB of $479.1 million and rated by Morningstar Credit Ratings.

During the first half of 2013, Midland resolved approximately 52 percent of its active special servicing inventory, by asset count, compared with 39 percent as of June 30, 2012. As of June 30, 2013, Midland's special servicing portfolio contained 173 active assets with an aggregate UPB of approximately $1.1 billion, compared with 335 active assets with an aggregate UPB of approximately $3.2 billion as of June 30, 2012.

The forecast for all three rankings is Stable. Morningstar believes that Midland is fully capable of serving as an effective primary, master, and special servicer for its investor clients.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs