Fitch Ratings has affirmed Wells Fargo Bank's (WFB) U.S. residential master servicer rating at 'RMS1-'.

The Rating Outlook remains Negative based on integration and transition risks tied to the anticipated acquisition of the master servicing operation by Computershare Trust Company, NA (CTCNA) in fourth-quarter 2021, as part of WFB's CTS (Corporate Trust Services) purchase.

Key Rating Drivers

The 'RMS1-' rating reflects continued enhancements to Wells Fargo Bank Master Servicer's (WFBMS) primary servicer oversight program including investments in technology and process improvements, and its well tenured and experienced senior management team and staff. The rating incorporates the master servicer's performance during the coronavirus pandemic, and the support of its ultimate parent, Wells Fargo and Company (WFC; A+/F1/Negative). The rating analysis also considered the anticipated acquisition of CTS by CTCNA.

WFBMS is part of the Residential Mortgage Services division of Corporate Trust Services, which is a unit under Wells Fargo Bank, N.A. and falls under the Wells Fargo Commercial Banking division of WFC. CTS provides both operational and business support functions to the master servicing operations.

Fitch is monitoring the progress of the arrangements being put in place leading up to the expected closing date, including the effectiveness of WFC's two-year transitional servicing agreement with CTS in support of the transition, regulatory approvals and operational effectiveness, and the transition of CTS's master servicing systems, controls, procedures and staff into CTCNA. While the transaction is large and relatively complex, both Wells and Computershare have evidenced careful planning and this should contribute toward success of integration.

Over the past year, WFBMS continued to implement a new file/data intake application to support the current deal/loan/asset master servicing operation, which is also expandable to other asset types. The master servicer indicated that it has successfully transitioned 75% of its legacy portfolio to the OneCTS enhanced technology platform for its proprietary interface for master servicing. The OneCTS tool is expected to be integrated into CTCNA.

The master servicing operation maintains a staff of approximately 212 full-time equivalents (FTE), as well as leveraging the shared services of CTS, which include human resources, finance, legal and technology business partnerships for support; most CTS staff are expected to join CTCNA. WFBMS uses temp-to-perm as a hiring strategy and, during this review period, had 40 new hires and completed 33 FTEs internal promotions. Combined voluntary and involuntary staff turnover averaged 8.3%, which represents an improvement from the 10.4% recorded during the prior review period. WFBMS is headquartered in Columbia, MD and maintains operational sites in Frederick, MD, Houston, TX, Minneapolis, MN and an offshore operation in India.

Computershare Limited, the ultimate parent entity of CTCNA, was founded in 1978 and oversees transfer agent and investor services operating in more than 20 countries with 12,000 employees. The company is headquartered in Victoria Australia and is traded on the Australian Securities Exchange as CPU. Fitch has had substantial experience with Computershare as subservicer of U.S. and European mortgages and as a named party in Canadian covered bond transactions. Computershare services over $100 billion of mortgage loans globally, including those handled by its subsidiaries Specialized Loan Servicing LLC in the United States and Homeloan Management Limited in Europe. In 2019, the company acquired LenderLive Network, LLC, which Fitch reviewed for third-party mortgage loan diligence activities.

WFBMS' portfolio was reduced by approximately 113,000 loans over the past year; this was largely driven by prepayments from its legacy portfolio. As of June 30, 2021, WFBMS serviced approximately 888,000 loans totaling $163.9 billion. This breaks down into approximately 439,500 non-agency RMBS loans totaling $98.1 billion, approximately 33,000 agency loans totaling $1.6 billion and 415,400 other master serviced loans totaling $64.1 billion.RATING ACTIONSENTITY/DEBT	RATING		PRIOR Wells Fargo Bank, N.A.

? RMBS Master Servicer

RMS1- 	Affirmed		RMS1-

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