Rationale

S&P Global Ratings' rankings on Wells Fargo Commercial Mortgage Servicing (WFCMS) are STRONG as a commercial mortgage loan primary and master servicer and ABOVE AVERAGE as a special servicer. On May 15, 2020, we affirmed the rankings (please see "Wells Fargo Commercial Mortgage Servicing Servicer Rankings Affirmed; Outlooks Are Stable"). The outlook on each ranking is stable.

Our rankings reflect WFCMS's:

• Highly experienced and well-tenured domestic servicing personnel, accompanied by overall low turnover;
• Strong audit, compliance and control environment;
• Robust systems and technology;
• Well-documented and comprehensive policies and procedures across its servicing functions;
• Efficient and substantial platform that benefits from its affiliate's offshore support;
• Proactive practices covering master servicer oversight of subservicing operations;
• Historically successful resolution history of special serviced loans; and
• Substantial CMBS and Freddie Mac capital markets execution special servicing appointments.

Since our prior review (see "Servicer Evaluation: Wells Fargo Commercial Mortgage Servicing," published Sept. 28, 2018), the following changes and/or developments have occurred:

• In May 2019 the head of Structured Real Estate (SRE), which is a business unit within Wells Fargo's Commercial Real Estate (CRE) business, retired from the company and an internal CRE executive was promoted to assume the position.
• In February 2020 the Head of Wells Fargo's CRE business retired from the company and the head of SRE was promoted to the position. Those businesses that constituted SRE, including WFCMS, now report to the head of CRE.
• In April 2019, a senior servicing operations manager left the company; her duties were split amongst current leadership.
• In May 2019, the head of master servicing left the group for another internal opportunity within the bank; her duties were assigned to the head of loan servicing.
• The number of primary/master serviced loans increased by approximately 2.1%, driving a more than 8.4% rise in overall unpaid principal balance, which was further boosted by an increase in average loan size to $19.2 million from $18.1 million.
• During 2019, overall staffing levels declined 3.6% to a total servicing full-time employee count of 908, with 37% of staff located offshore.
• The onshore and offshore flood insurance staff were realigned under wholesale flood operations in support of an enterprise initiative to streamline processes and ensure compliance with regulatory guidelines.
• WFCMS upgraded to Strategy version 19D as their system of record from release 19A.
• WFCMS retired their asset management servicing (AMS) system which tracks and monitors GSE loans, and migrated the data to its Credit Bridge Asset Management system.

Beginning in March 2020, WFCMS made substantial staffing changes immediately upon moving to a work from home environment that included redeploying 20 full time employees from areas of low volume to teams with more critical needs such as asset management, investor reporting, reserves, client solutions and special servicing. Additionally, the other CRE teams made available 21 full time employees that were also redeployed to WFCMS the first month to pick up volumes in asset management, cash management and special servicing. A total of 41 staffing resources have been reallocated throughout the servicing platform, including sufficient resources that effectively doubled the size of the special servicing team with tenured staff.

Our outlooks for all three rankings are stable. We believe WFCMS, like most servicers, will face challenges in 2020 arising from increased workloads associated with relief requests resulting from the economic difficulties borrowers face due to the COVID-19 pandemic, particularly following a prior existing benign default environment. We expect management will continue to add or redeploy staffing resources throughout its extensive commercial real estate and servicing platform to address these relief requests as needed. Further, given its track record of managing a substantial loan portfolio through multiple economic cycles, we expect WFCMS will remain a highly effective servicer for all of the portfolios it services.

In addition to conducting an on-site meeting with servicing management, our review includes current and historical Servicer Evaluation Analytical Methodology data through Dec. 31, 2019, as well as other supporting documentation provided by the company.

Profile

WFCMS is a line of business within Wells Fargo Bank N.A. (Wells Fargo). It performs commercial mortgage primary, master, and special servicing functions for CMBS (and to a lesser extent, CRE collateralized debt obligation [CRE CDO] and CLO loans); mortgage-backed securities conforming to a GSE; balance sheet loans; interim loans; warehouse loans; and secondary market loans, whole loans, and loan pools serviced under the U.S. Department of Housing and Urban Development (HUD) and Federal Housing Administration (FHA) guidelines. Additionally, through its Customized Portfolio Services group, it provides servicing and asset management services for 79 lender clients, which is a strategic decline from the approximately 100 lender clients in our prior report. Within this scope, WFCMS provides payment and escrow processing, cash and treasury management, asset management, investor reporting, and collateral administration. In its servicing roles, WFCMS also provides asset information, various industry standard reports, surveillance, watch-list, loss mitigation, and default resolution assistance to the end investor.

With a portfolio of $594 billion, WFCMS is one of the largest primary and master commercial mortgage servicers of U.S. collateral. As of Dec. 31, 2019, according to the Mortgage Bankers Assn., it was the largest total primary and master servicer of CMBS, CDO, and other ABS loans, with a portfolio of $355 billion. It also held the top positions for Freddie Mac ($119 billion) and Fannie Mae ($42 billion). Additionally, as of Dec. 31, 2019, WFCMS was the appointed special servicer on 210 securitized transactions of CMBS, Freddie Mac CME, and CRE CDO/CLO products, which contain nearly 5,000 loans aggregating to $134 billion of unpaid principal balance (UPB). As of the same date, WFCMS managed an active special servicing portfolio of $800 million in UPB.

Based primarily in Charlotte, N.C., WFCMS also conducts various aspects of its business operations in San Francisco and Concord, Calif.; McLean, Va.; Bethesda, Md.; Dallas; New York; Hyderabad and Bengaluru, India; and several additional satellite locations. As of Dec. 31, 2019, the WFCMS staff included approximately 908 full-time employees, including 339 in its operations of Wells Fargo India & Philippines (WFI&P) in Hyderabad and Bengaluru.

WFCMS relies and leverages its offshore affiliate to handle their critical processes such as: account reconciliations, investor reporting, reserves, new loan set-up, insurance, payoffs, cash administration, taxes, escrow analysis, cash management, and reconveyance. Other servicing processes have several WFI&P remote team members handling the work as well. All payment processing and reporting deadlines have been met. The group has several meetings each week with WFI&P senior leadership, and team managers have daily meetings to understand any challenges and adjust production workflows as appropriate to minimize risk to the portfolio.

In light of current events, the situation in India is much like that of the U.S. where staff is working from home to continue business operations. In early April 2020, WFI&P only had 45% of its commercial mortgage servicing team members with remote capability. However, those personnel cover 100% of critical processing with the reduced remote capacity managed by extending daily work hours and working weekends. As of the end of April, WFI&P ramped up its offshore work from home capacity such that 100% of the team had remote capability.

Table 1

Table 2

The servicer's primary/master serviced U.S. portfolio, which consists of just under 31,000 loans, is broadly diversified by property type. The largest UPB concentrations of loans are in the multifamily (31.1%), office (20.2%), retail (16.2%), and lodging (10.3%) asset classes (see table 3). Geographic distribution spans all of the U.S., as well as the U.S. territories, with the greatest portfolio UPB concentrations in New York (19.3%), California (13.9%), and Texas (7.9%).

With respect to investor type, the portfolio UPB is heavily weighted toward securitized products, including CMBS, CDO, and ABS (59.7%), and Freddie Mac K-series (19.3%), with warehouse products (8.5%) and Fannie Mae (7.1%) comprising the majority of the balance (see table 4).

Table 3

Table 4

Management And Organization

The management and organization subrankings are STRONG for primary, master, and special servicing.

Organizational structure, staff, and turnover

WFCMs' management team and staff exhibit significant levels of industry experience. Tenure levels are above average in length for senior and middle management and match peers in length for staff positions.

In addition to the chief administrative officer, who also reports to the servicing head, the head of commercial mortgage servicing has three long-tenured executive direct reports, including the head of business development and client management. The managing director of loan servicing heads servicing operations, including investor reporting and accounting, client solutions, and operational functions in Charlotte and Concord. The executive vice president (EVP) of asset management is responsible for all asset management functions, including special servicing. Additionally, the head of wholesale mortgage operations at WFI&P has a dotted line to the head of commercial mortgage servicing.

Each line of business has direct report functional managers in the U.S., as well as offshore functional managers. The offshore managers generally have dotted-line reporting relationships to U.S. managers but also directly report to the senior executive responsible for all of the WFI&P commercial real estate operations, including commercial mortgage servicing. The more modest experience levels for offshore-based staff, which we recognize as being an industry-wide characteristic of offshoring, is a minor concern. We believe this is mitigated by solid controls over the offshore operation accompanied by substantial operating leverage provided by the staff.

Table 5

Table 6

During 2019, turnover at the primary/master servicing level totaled approximately 16.3%, including 16.1% domestically and 16.7% offshore. We consider WFCMS' primary/master servicing levels of turnover to be favorable and indicative of the platform's strength.

In addition, turnover reported at the special servicing level during 2019 was 35.7% domestically with no turnover offshore. WFCMS has typically had minimal turnover in special servicing; however, in the first half of 2019, four people handling small balance/balance sheet special servicing were moved out of the group, which artificially inflated the turnover figure. Overall, special servicing turnover compares favorably with ranked peers, which have largely experienced substantial turnover during the same period.

There has been a continued focus on offshoring responsibilities to WFI&P during the past several years. Offshore full-time employees generally stayed flat at 339 since year-end 2018. The number of employees has continued to grow in Charlotte (369 as of Jan. 31, 2020, compared to 326 as of April 30, 2018), while the number of employees in the San Francisco office declined to 109 from 138 during the same period. Table 6 provides a geographic snapshot of the WFCMS organization as of Jan. 31, 2020.

To help manage the increased workload associated with substantially elevated borrower inquiries and requests for forbearance resulting from the impact of shelter-in-place restrictions, WFCMS made substantial staffing changes in March/April of 2020, including redeploying 20 full-time employees from areas of low volume to teams with more critical needs such as asset management, investor reporting, reserves, client solutions, and special servicing. Additionally, other CRE teams made available 21 full-time employees that were redeployed to WFCMS to help manage increased workloads in asset management, cash management, and special servicing.

Training

WFCMS provides its management and staff with a diversified array of ongoing, formal internal and external training programs, which is typical of similarly sized peers. WFCMS targets 40 hours per employee annually for all servicing personnel, tailored to the experience and tenure of the staff member and their respective job functions. Other training features include:

• The business initiatives group, in partnership with the learning and development organization, is responsible for the WFCMS training program and the further development of training for asset management, servicing teams, and cash management team members at all levels.
• During 2019, primary/master servicing employees averaged over 40 hours of training, and special servicing employees averaged approximately 40 hours. Servicing employees averaged an aggregate 45 hours of functional training during 2018.
• Training courses are offered through internally developed curriculums as well as in collaboration with external training providers. Additionally, WFCMS regularly hosts and participates in industry-wide summits, panels, and conferences covering a wide range of commercial mortgage-related topics, which provide training opportunities.
• Team members are required to complete a set number of training hours based on function, including annual risk and compliance courses and other assigned curriculum by the WFCMS chief administrative officer.
• During performance reviews, unit managers assess whether employees would benefit from additional training relative to their job description.
• The Wells Fargo Talent Management system is used by managers to track employee talent profiles and career development, and is used for internal succession planning.

The Wells Fargo CRE risk management team maintains and oversees compliance and risk management programs across all of Wells Fargo. The CRE risk management team, and their staff of approximately 3400 people, which also support WFCMS, are responsible for a number of key activities associated with regulatory and bank compliance for all WFCMS business groups, including training development and delivery.

CRE risk management oversees curriculum development and tracks all training courses required and completed by each employee. All team members are also required to take an annual Code of Ethics web-based course, of which completion is monitored by WFCMS senior management and CRE Risk Management. All training records are maintained on a bank-supported internal learning management system, which also provides detailed management reports.

Systems and technology

We believe WFCMS has effective technology to meet its primary, master, and special servicing requirements. The company continues to focus on technology enhancement projects to further streamline and automate servicing tasks across various loan administration functions. WFCMS also has well-designed data backup routines and disaster recovery preparedness.

Servicing system applications 

WFCMS utilizes a comprehensive and wide variety of key applications and systems within its servicing and asset management platforms. Table 7 provides a summary of the key applications.

Table 7

Since our last review, WFCMS has implemented a number of both general and specific system updates.

• WFCMS upgraded to Strategy version 19D as their system of record from release 19A. The servicing system continues to be hosted by McCracken in its Boston data center.
• Report Central replaced Reportgen for utilization as a reporting portal for data analytics.
• WFCMS' special servicing group utilizes the Real Insight Commercial Asset Management System (CAMS). CAMS provides data, tools, and features that assist asset managers in effectively managing their assets. CAMS also provides senior management real-time oversight and control features to facilitate compliance with all requirements and guidelines, as well as to optimize resolution activity. Recent enhancements to CAMS include enhanced trust surveillance reporting and customized reporting for B-piece investors for consents, watchlist, and specially serviced loans.
• WFCMS retired their AMS system, which tracks and monitors GSE loans, and migrated the data to Credit Bridge Asset Management.

Business continuity and disaster recovery  WFCMS maintains thorough data backup, business resumption, and disaster recovery plans and protocols for its servicing operations. Features include:

• Servicing data is backed up and stored off-site daily, and the company has a four-hour target for recovery of cash processing and investor reporting.
• Planned disaster recovery is tested annually.
• The primary servicing data center is suitably distant being located in North Carolina, and the business continuity data center is located in Alabama.
• The most recent business continuity testing for its Strategy servicing system was performed in October 2019 with no material issues.
• The most recent business continuity recovery simulation test was conducted in October 2019 with no significant issues noted.
• In early April 2020, WFI&P only had 45% of its commercial mortgage servicing team members with remote capability. However, those personnel cover 100% of critical processing with the reduced remote capacity managed by extending daily work hours and working weekends. As of the end of April, WFI&P ramped up its offshore work from home capacity such that 100% of the team had remote capability.

Cybersecurity

Wells Fargo has established practices to manage cybersecurity risks. It employs extensive enterprise security controls pertaining to access to its systems and data (least privilege access, frequent password updates along with complexity requirements, multifactor authentication for remote access, etc.). Features include:

• The Enterprise information security (EIS) unit within the organization is responsible for Enterprise framework, design, and oversight. It developed the information security program to maintain compliance with legal, regulatory, and contractual obligations for any party with access to Wells Fargo's networks, infrastructure, equipment, or facilities housing confidential or restricted information.
• The EIS cyber threat management team provides threat and vulnerability management and intrusion detection policies and best practices. This team is responsible for leading enterprise-wide efforts to reduce Wells Fargo's exposure to cyberattacks through 24/7 monitoring, analysis, and assessing the internal and external threat landscape.
• EIS uses various evaluation tools to measure periodically how well cybersecurity practices are integrated into Wells Fargo's overall risk management practices.
• WFCMS routinely sends phishing emails to employees to test compliance with their cybersecurity training. System penetration testing is also handled routinely in an efficient manner.
• Management believes it has a mature, risk-based security-monitoring program for its network architecture that functions as part of a larger defense-in-depth model.
• The security-monitoring program is performed by both Wells Fargo and vetted, third-party security specialists. As part of the program, both automated and manual testing is conducted at least annually, depending on scope and risk. The monitoring program includes vulnerability scanning, web-application testing, and penetration testing.

Internal controls

We believe that WFCMS' risk management efforts, including its system of controls and governance processes, demonstrate a comprehensive and sound approach to maintaining a controlled servicing environment.

Policies and procedures 

WFCMS maintains an extensive policies and procedures (PnP) manual that covers primary, master, and special servicing functions. Its content is continually updated, and various process owners formally review and date changes.

• The PnP focus is on CMBS loans given their prominence in the portfolio. Nonetheless, many of the same PnP's fundamentally apply to all servicing portfolios, and all aspects of commercial mortgage servicing operations and processes are addressed at a high level.
• Procedural guidelines and clarifying text are available via desktop reference documents and policy supplements, which are hyperlinked throughout the documents.
• The PnP manual is available to all staff via the SharePoint intranet site.

Quality assurance 

WFCMS practices operational risk management through three lines of defense. The first line is all business groups and certain activities of enterprise functions. In its course of business activities, the first line identifies, measures, assesses, manages, controls, monitors, and reports on risk associated with its business activities. These control organizations have dual reporting to a head control executive within the COO organization, as well as to the heads of the businesses they support.

The second line of defense is Wells Fargo's independent risk management team (IRM) which reports up through the chief risk officer. This team establishes and maintains the company's risk management framework and provides oversight, including independent assessment of the front lines' execution of its risk management responsibilities. Independent challenge is provided by this IRM group, which contains both compliance and operational risk partners.

Internal and external audits 

The third line of defense is Wells Fargo's internal audit department (formerly Wells Fargo Audit Services). Key aspects of WFCMS' internal audit process include:

• Internal audits are initiated at the corporate level by Wells Fargo and are conducted by personnel who report independently to Wells Fargo's board of directors.
• Audits are conducted on specific functional areas, including operations, cash management, and asset management/relationship management. The audit frequency depends on the type of audit and the risk rating.
• All recommended remedial assignments are entered into the company's corrective actions database for resolution tracking.

During 2019, WFCMS underwent 31 distinct audits and reviews, including seven with an operational focus and 24 with a regulatory emphasis. The internal audit review in 2019, for the loan servicing team, received an effective rating. Its scope included testing key controls associated with account origination, money movement, payment processing, customer complaints, and account servicing. Internal audit uses a three-tier audit rating scale (effective, needs improvement, and weak).

Freddie Mac assesses the company annually, with the 2019 review noting a couple of minor findings in asset management. Management indicated they resulted from WFCMS's organizational changes, and the issues have since been remediated.

Fannie Mae and HUD also assessed WFCMS in 2019. The Fannie Mae assessment provided a "Good" rating with no significant findings. The 2019 HUD audit ended early 2020 with one minor finding that had no impact on the business group per management. The 2020 HUD audit is scheduled to begin in August 2020. Management reported the 2019 Ginnie Mae audit resulted in no findings.

WFCMS uses the Regulation AB (RegAB) audit standard across the entire platform and it uses a control matrix to ensure that controls are documented for all servicing criteria associated with RegAB. Attestation letters dated in February 2020 for CMBS from their third-party auditor each cited no material exceptions in 2019 within its primary, master, and special servicing areas.

Vendor management

Wells Fargo has an established third-party risk management program (TPRMP) that provides vendor management controls. Notable features include:

• The TPRMP reviews and assesses third parties before engagement and throughout the third-party relationship, using risk assessments at intervals driven by the services provided. Third-party employees are required to adhere to applicable corporate standards.
• These standards apply to vendors and all nonemployees located outside of the U.S. who have access to company and consumer information for purposes of delivering services to or on behalf of Wells Fargo.
• As part of this compliance obligation, contracts are in place with each third party, which include confidentiality language, nondisclosure agreements, and other security provisions. Wells Fargo also reserves the right to audit third-party service providers (and their subcontractors) as needed to monitor risk and performance.

Insurance and legal proceedings

WFCMS has represented that its directors and officers as well as its errors and omissions insurance coverage is in line with the requirements of its portfolio size. As of the date of this report, there were no material servicing-related pending litigation items.

Loan Administration – Primary Servicing

The loan administration subranking is STRONG for primary servicing.

Portfolio dollar volume rose 4.2% from our prior review as growth in average loan size ($19.2 million versus $18.1 million) has mostly offset declining unit volume of approximately 1.8% during the same time. Within its primary serviced portfolio, WFCMS reported a Dec. 31, 2019, delinquency level of 0.89%, which is below its peers' average (see table 8).

Table 8

New-loan boarding

Based upon its stated practices and written procedures WFCMS has a sound loan set up function. Control and other features of new loan setup include:

• Before releasing the loan into the production environment, an asset management review, as well as a pre-release data audit of critical system fields, is completed to ensure key loan information is correctly interpreted.
• All document exceptions are cleared with triggers, ticklers, and notepad information entered into Strategy. Once completed, all related material is collected in a boarding file, which is then imaged.
• WFCMS targets a maximum of 10 days to get all of the essential data boarded, which is in line with peers. As part of the monthly pool remittance process, quality control procedures call for the investor reporting area to examine all adjustable-rate mortgage loans and coordinate with WFCMS operations on any required adjustments.
• A post-boarding audit is performed after approximately 90-120 days, or as needed, to identify and manage exceptions. During the second half of 2019, primary serviced loan volume remained largely flat on a unit basis due to payoffs, although management reported the boarding of more than 4,200 new loans.
• Customer service analysts contact all new borrowers and inform them of available support, and verifies that the borrower welcome package, which is sent out within three days of closing, has been received.
• WFCMS works with a vendor to assist with loan boarding, including auditing loans boarded by offshore staff and being cross-trained to handle any part of loan boarding functions as a variable capacity tool during periods of high volume.

Payment processing

WFCMS practices and integrated technology tools efficiently address payment processing, cash-managed, and other complex loan structures with appropriate segregation of duties. Highlights of payment processing includes:

• As of Dec. 31, 2019, 39% of the payments were made via wire transfer, 31% were received through automatic drafting, and the lockbox capture rate was 30% of payments. We view the resulting 100% automated capture rate favorably.
• The process for handling live checks, from nonroutine issue (i.e. insurance losses) is well-controlled, using a dual log system. Any discrepancies are referred to the operations department manager.
• All checks are deposited (via an electronic process), applied, or researched within a 24-hour time frame. Payment clearing accounts are balanced with the servicing system on a daily basis and subject to supervisory sign-off.
• Strategy is interfaced with the bank's general ledger system to ensure an accurate posting process, with exceptions being researched and resolved.
• As of Dec. 31, 2019, no unidentified or unreconciled items aged more than two days had appeared in the clearing accounts. Seven items aggregating over $950k were classified as "in suspense" more than 90 days. We note that the highest ranked servicers typically reported no such suspense items.

Investor reporting

WFCMS has dedicated staff members for the various investor reporting and operational accounting activities that are properly segregated for reporting, remitting, and related account reconciliation processes. It is highly experienced with CMBS, GSE, and third-party reporting requirements. Other highlights include the following:

• Procedures demonstrate an appropriate segregation of duties among the staff for investor reporting, remitting, and custodial bank account reconciliations.
• An area separate from payment processing is responsible for investor accounting and reporting, and a distinct finance and accounting team performs all bank account reconciliations.
• Data is automatically validated before investor remittance, and all reporting and remitting to investors is conducted electronically.
• WFCMS can produce customized reporting and remitting packages tailored to each investor's requirements while maintaining all critical data in the protected Strategy environment. To ensure timely CMBS investor reporting and remittances, investor reporting team members and managers review a critical date calendar and a distribution log, as applicable, on a daily basis.
• Trustee balances are reconciled with Strategy report data, which is reviewed and approved by management. Once approved, the remittance report is sent to the applicable party as part of the CREFC Investor Reporting Package.
• During the last six months of 2019, WFCMS experienced 11 instances of remittance or reporting errors, limited to CMBS, causing recalculation or restatement; management reported that no penalties were associated with any late remitting or reporting. We note that other STRONG ranked servicers generally do not encounter these reporting and remitting errors.
• WFCMS electronically monitors all bank account information, expediting the reconciliation process. Its daily balancing of all major custodial accounts, which we typically see with STRONG-ranked U.S. servicers, reduces the possibility that outstanding items will age for any significant length of time. This is reflected by having no unidentified items aged more than 90 days being reported.
• Quality control (QC) audits of all cash and noncash transactions are performed within 48 hours to ensure compliance with agreed-upon procedures and practices.

The CMSView portal, an online application, offers five customized views:

• The borrower view provides access to payment information, property data, and escrow detail, and offers functionality that allows borrowers to upload financial statements.
• The investor, rating agency, subservicer, and special servicer views provide commercial real estate finance reports, deal-, loan-, and property-level analysis, imaged property inspections, and operating statements.

Escrow administration

We believe the company has sound controls for escrow administration activities. WFCMS has dedicated teams for tax and insurance administration, and has customer service staff both internally and offshore who handle loan-level reserve monitoring and analysis for other escrowed events such as tenant improvements and replacement reserves. Other features include:

• A contract with a property tax service bureau covers all portfolio loans (including non-escrowed), and loans are tracked for payment verification. As of Dec. 31, 2019, 60% of the primary serviced loans in WFCMS' portfolio maintained tax escrows.
• Any loan with unpaid taxes is automatically flagged for inclusion on a system-generated watch list.
• Tax disbursement funds are wired to the vendor, and all pertinent data are uploaded from the vendor's system to Strategy.
• As an additional QC measure, the escrow management group prepares a quarterly large-asset report that is reviewed by the escrow management group and insurance department managers to ensure that all single-asset loans with a UPB of $100 million or more have taxes paid and have no outstanding issues.
• During the last half of 2019, tax penalties were a nominal percentage of total tax disbursements. The ratio was also lower than its STRONG-ranked peers, indicative of a well-controlled tax escrow practice.

Insurance monitoring is initiated during new loan setup, loan assumptions and modifications. The insurance team obtains documentation to confirm evidence of coverage; it then monitors the insurance policies to ensure timely renewal (separate personnel in operations pay insurance premiums). As of Dec. 31, 2019, 43% of the primary serviced loans in WFCMS' portfolio had insurance escrow accounts. Other insurance aspects include:

• The insurance tracking function is fully automated via a system specifically designed to monitor and report on key insurance dates and coverages.
• WFCMS circulates reminder notices to borrowers 30 days before insurance policy expiration. If the borrower fails to provide adequate property insurance coverage, coverage will be force-placed 90 days after the policy expiration date.
• WFCMS' established force-placed policy has lengthy 365-day retroactive coverage, and force-placement activity remains negligible.

Asset and portfolio administration

We believe WFCMS has sound procedures covering asset and portfolio administration tasks. Notable features include:

• UCC ordering and tracking (including continuations, terminations, searches, and filings) is fully automated via a third-party vendor with the capability to file electronically in all states. The vendor's database is fully accessible via its website, which provides monthly status reports on renewal and expirations.
• The portfolio had over 22,000 UCC filing requirements as of Dec. 31, 2019.
• While there were only seven instances of lapsed filings during this time, its STRONG-ranked high-volume peers in the U.S. generally report no such instances.
• A third-party vendor performs all site inspections. Inspections for loans with UPB of $2 million or greater are completed annually; smaller loans have inspections performed every two years.
• All inspections are scheduled on a property surveillance workflow system, and completed inspection reports undergo a QC review process.
• Deferred maintenance items are centrally tracked, with notices sent to the borrower, and may prompt a loan's addition to WFCMS' watch list.
• The portfolio surveillance and reporting (PSR) team internally manages the collection of property operating statements and leasing information, tracks all statement due dates, and handles request mailings. Substandard financial statement results are integrated with the watchlist for possible inclusion.
• WFCMS received and analyzed 98% of its Dec. 31, 2018, CMBS operating statements by Dec. 31, 2019. These metrics are largely similar to those of their peers.

The watchlist process is managed by teams in both asset management (loans greater than or equal to $50 million) and PSR (loans less than $50 million). Procedures include the following:

• Automated reports are generated for the portfolio using CREFC's watchlist criteria.
• The addition or removal of loans on the watchlist for data-driven triggers occurs systematically.
• Manual triggers are managed by asset management and PSR for their respective loans, with all watchlist loans being reviewed monthly.
• Ongoing reviews of property performance are conducted until conditions meet predetermined investor criteria.

Borrower requests

WFCMS addresses borrower requests in a well-controlled manner. During the last half of 2019, in its capacity as primary or master servicer, they completed more than 2,100 CMBS borrower consent reviews such as leasing consents (64.1%), defeasance (21.3%), property management changes (4.9%), transfer of equity interests (4.3%), assumptions (4.2%), and partial releases (1.1%).

The request for a CMBS loan assumption or nonpermitted equity transfer is typically processed by the WFCMS asset management--loan assumptions team. The loan assumptions team is responsible for the front-end of the process, which includes:

• Managing the underwriting process, which is conducted by a third party vendor.
• Submitting a written recommendation to the asset manager for review and approval.
• Obtaining any further internal approvals, as necessary, in accordance with the WFCMS approval matrix.
• Obtaining all necessary third-party approvals.
• Sending a closing package to a team dedicated to loan assumption closings, which coordinates the closing with legal counsel and any internal operational teams, after all approvals are obtained.
• An internal reporting mechanism that is in place to track resolution times and monitor the status of assumptions that are in underwriting, under the third-party special servicer's review, and in closing.
• Other borrower-consent requests, such as lease reviews, property management changes, release of collateral, and defeasance that also have well-defined processes for the asset management team to review and obtain approval in accordance with the WFCMS approval matrix.

Due to anticipated borrower challenges in making its debt service payments resulting from the COVID-19 pandemic, WFCMS has set up a dedicated forbearance team to process relief requests for loans in the Fannie Mae, Freddie Mac, and FHA portfolios. The team is managed by a seasoned commercial real estate professional and is staffed by experienced asset managers as well as two underwriters "on loan" from the Wells Fargo Multifamily Capital underwriting team. NonGSE loans are being handled on a one-on–one basis after reviewing the merits of the request and pending a review of financials and other borrower and collateral materials while also coordinating with the special servicer according to the requirements of the pooling and servicing agreement.

Management believes they are currently adequately staffed to handle the increased workload associated with the above. To the extent that the volume of transactions dictates the need for additional resources, management indicated it would reassign asset managers to this team on a temporary basis and look to other real estate units across its platform for qualified people. If necessary, leveraging existing vendors would also be considered.

Early-stage collections

WFCMS has a well-controlled early-stage collections process. Noteworthy features include:

• Strategy produces daily reports to identify delinquencies for follow up from the collection log.
• Strategy automatically generates late payment notices, which are issued to borrowers one day following the due date, with a subsequent default notice issued when the payment is over 31 days past due.
• Attempts to contact the borrower by telephone occur three days after the payment due date or the grace period's expiration, and a chronology of collection comments is maintained online.
• Loans unpaid past the grace period (if applicable) are immediately added to the watch list, and delinquent loans may be transferred to a special servicer before the 60th day of delinquency, on a case-by-case basis.

Loan Administration – Master Servicing

The loan administration subranking is STRONG for master servicing.

We believe that, as a master servicer, WFCMS has proactive PnPs in place regarding subservicer oversight. As of Dec. 31, 2019, WFCMS acted strictly as master servicer for a portfolio of 6,652 loans, where it has oversight responsibilities for 76 subservicers, with an approximate UPB of $130.4 billion (see table 9).

Within their serviced by others portfolio, WFCMS reported a Dec. 31, 2019, delinquency rate of 0.08%, which is consistent with our prior review. Portfolio dollar volume has accelerated during the past few years as WFCMS has utilized subservicers to a greater degree. WFCMS subservicers increased primarily due to its role as a master servicer for the Freddie Mac K series transactions, as Freddie Mac requires its seller/servicers to remain in the securitizations as subservicers. As of Dec. 31, 2019, UPB had nearly doubled since year-end 2015.

Table 9

Due to current market issues caused by the COVID-19 pandemic, WFCMS has set up a dedicated forbearance team to process requests for the GSE portfolio. Non-GSE loans are being handled on a one-on–one basis after reviewing the merits of the request, and collecting additional backup from borrowers while also coordinating with the special servicer according to the requirements of the pooling and servicing agreement. They have redeployed resources from other groups as necessary, and count on their offshore base for additional support. This situation is evolving and WFCMS is monitoring issues and workloads as necessary.

For loans where WFCMS is the master servicer only, the deal asset managers are reviewing the cases submitted by the subservicers.

New-loan boarding

• WFCMS' procedures regarding loan setup are documented, and appropriate data integrity measures are in place.
• Subserviced loans are boarded with the information necessary for the timely and accurate production of investor reports.
• Supplementary programs allow automated data entry to Strategy, after which boarding packets are imaged, logged, and sent to loan administrators for auditing.
• Subservicers receive a series of letters outlining their responsibilities as dictated by the WFCMS standard subservicing agreement.
• During 2019, WFCMS boarded 1,252 loans subserviced by others.

Subservicer accounting and reporting

Master servicing personnel oversee loan accounting functions including the following:

• On the first of each month, WFCMS receives reports from each subservicer outlining upcoming remittances, with projections for principal, interest, and subservicing fee splits, and any expected curtailments or payoffs.
• Reports are examined to ensure any corrections necessary are made before the remittance due date, preventing any impact on the related trust or investor.
• WFCMS does not shadow-service the loans on which it serves as master, but it records basic loan-level information and amortizes monthly payment records via aggregate posting of subservicer remittances on Strategy. Delinquencies, curtailments, and other adjustments are made through manual exception processing.
• The same dedicated personnel responsible for primary servicing also handle master servicer investor reporting.
• Each month, investor reporting specialists prepare reports from Strategy, reconciling all activity reported by subservicers to the underlying actual and scheduled loan balances, and separate operations personnel perform custodial account reconciliation reviews necessitating supervisory sign-off.
• After receiving trustee reports and submissions for wire transfers, the operations department releases remittances.

Subservicer oversight   WFCMS does not shadow-service its master-serviced portfolio for tax, insurance, or UCC file renewals, but it does require subservicers to provide evidence of real estate tax payments, insurance coverage monitoring, and UCC filing validations.

Escrow administration  It reviews subservicer loan-level exception reports for taxes and insurance on a quarterly basis; subservicer UCC exception reports are reviewed monthly. We believe WFCMS' escrow administration oversight procedures effectively monitor that subservicers are suitably administering their loan portfolios.

Asset and portfolio administration  Each subservicer is responsible for conducting property inspections and performing financial statement analysis for each loan in its portfolio. These duties are monitored by members of WFCMS' PSR team. Other noteworthy features include:

• A standard subservicer reporting model tracks data for CREFC compliance. It allows subservicers to electronically forward operating statements and rent rolls along with inspection comments in accordance with the terms of each transaction's underlying documentation.
• Nearly 85% of 2019 subservicer-supplied annual financial data was reanalyzed by WFCMS through Dec. 31, 2019. After data is reanalyzed, portfolio reporting analysts prepare all operating statements and review all subservicer financial data and ratio calculations.
• Once the financial data is analyzed, all loan data is passed through various criteria flags to see if further review is required. The financials are then uploaded to a historical database.
• All loans in the master-serviced portfolio are included in the WFCMS formal watch list program, and the criteria for inclusion are the same as established for primary-serviced loans.

Audit/compliance  We believe WFCMS' audit regime effectively controls risks related to negligent or poorly qualified subservicers. Features include the following:

• As of Dec. 31, 2019, eight full-time employees were engaged in subservicer oversight, audit, and compliance activities.
• All subservicers are assigned a risk rating based on the volume of loans serviced, the last subservicer audit rating, financial strength, and WFCMS' historical experience. The resulting overall rating is then tied to an assigned risk factor of high, medium, or low. Each risk factor level mandates set procedures for oversight and monitoring.
• Audits include Freddie Mac seller-servicers, 25 of which also service CMBS loans. Post-audit interviews of subservicers' senior management are performed. WFCMS monitors responses to audit findings to ensure that areas of concern are addressed and rectified timely.
• During 2019, 46 on-site subservicer audits were conducted. All full subservicers are scheduled for an on-site audit during 2020, however, this could change due to COVID-19 concerns.

Investor reporting, advancing, and special servicer interaction

The master servicer is responsible for advancing principal and interest payments, as well as property protection expenses for its CMBS portfolio. WFCMS has detailed procedures regarding payment advances and the determination of their recoverability for the trust including the following:

• WFCMS formally tracks cumulative advances at the loan level relative to the collateral value.
• As a policy guideline, advances are limited to 60% of its estimate of collateral value. If the criteria allows for a principal and interest advance, the team member submits the advance request with supporting documentation for management approval.
• Once approved, the funds are transferred from a general ledger account to a principal and interest custodial account.
• With respect to property protection advances, servicing personnel perform the servicing advances for all specially serviced loans at the special servicing asset manager's direction.
• Once specific advances have been approved internally, a WFCMS special servicing coordinator will proceed with the advanced funds' disbursement and record the relevant information in Strategy.
• WFCMS also maintains procedures to monitor special servicers' efforts at updating appraised values. It conducts calls with special servicers to understand future advance expectations along with the timing of exit strategies to aid in its advancing decisions.
• Senior management, in conjunction with asset management and investor reporting management, undertakes a monthly loan-level review of advances to aid in its decision-making and non-recoverability determinations.
• Management reported that legacy loans with advances deemed nonrecoverable have somewhat leveled off since 2018.

Loan Administration – Special Servicing

The loan administration subranking is ABOVE AVERAGE for special servicing.

The company manages special servicing from its Charlotte office reporting 10 full-time employees onshore and four full-time employees offshore as of Dec. 31, 2019. Loan asset managers also handle real estate owned (REO) assets.

However, due to current borrower challenges caused by the COVID-19 pandemic, the WFCMS special servicing group has become significantly more active with loan transfers and forbearance requests. To help manage the increased workload, WFCMS made substantial staffing changes in March/April of 2020, including redeploying employees from areas of low volume and adding experienced staff from other CRE teams that have effectively doubled the size of the special servicing team.

In conjunction with improving market conditions through yearend 2019, the company's number of active special serviced loans declined dramatically, with the year-end 2019 portfolio decreasing over 85% since 2015 (see table 10). While the UPB has increased over 800% during the same time span, we note that over 85% of the Dec. 31, 2019, UPB is associated with just one large portfolio loan.

As the active special servicing portfolio declined during the last five years, resolution activity has lessened. During 2019, WFCMS completed 18 loan resolutions, well below the number of resolutions reported in each of the previous three years (see table 11). Overall average holds times for the 2019 resolutions of 20.5 months is at a multi-year high, but is generally below peers.

As of Dec. 31, 2019, WFCMS was the appointed special servicer on 210 U.S. securitized transactions (CMBS, CRE-CDO/CLO, and Freddie Mac CME products combined), containing nearly 5,000 loans aggregating $134 billion of UPB. Outside of securitizations, WFCMS indicates that it is named special servicer on more than 400 nonCMBS loans that aggregate $3.7 billion.

As of Dec. 31, 2019, WFCMS managed an active portfolio of $800 million of UPB, consisting of eight loans and one REO property, including seven CMBS loans and one CMBS REO property representing 99% of the UPB (see table 10). Further, a $682 million CMBS loan, associated with a retailer bankruptcy, represents 85% of the overall portfolio UPB.

Table 10

Special servicing operations are managed under the head of special servicing who is based out of Charlotte. He has extensive industry experience, and has been with WFCMS for 22 years. He reports directly to the head of asset management. Key elements of the special servicing operations include:

• Five asset managers and two analysts are responsible for the CMBS portfolio under the leadership of the head of the special servicing team.
• Assets per asset manager at year-end 2019 were very low compared to peers. At the same time, the active loan portfolio averaged $14.8 million in UPB (excluding the $682 million bankruptcy-related loan), which is suggestive of less complex assets. However, as previously noted, WFCMS has shifted additional resources to handle increased workloads resulting from borrower requests for forbearance/workouts.
• Special servicing asset managers averaged sixteen years industry experience as of Dec. 31, 2019, which is in-line with other ABOVE AVERAGE ranked special servicers.
• WFCMS serves as a third-party CMBS special servicer, having no ownership or affiliation with the controlling class representative (CCR) of each trust. This independence minimizes potential conflicts of interests that are inherent when a special servicer is an affiliate of the CCR.
• WFCMS offers due diligence services to third-party B-piece investors of CMBS and agency transactions. Such assignments are generally provided in anticipation of a special servicing appointment if the investor becomes the successful B-piece buyer.
• Proactive policies and procedures are in place with respect to special servicing loan administration.
• Oversight of special servicing loans is managed through the WFCMS approval matrix, which provides certain delegated authority depending upon the transaction type and underlying dollar amounts.

A specially serviced asset committee (SSAC) meets quarterly to formally review and analyze the current and previous quarter's special servicing activity. Quarterly reviews include loan-by-loan discussions with asset managers, providing specific details of the current workout strategy, potential gain or loss, potential advancing, resolution time frame, etc. The SSAC is composed of the following:

• The head of the special servicing team;
• The special servicing team leaders; and
• The senior WFCMS credit officer.

The SSAC defines and oversees general policy, procedure, and administrative issues. This includes reviewing and monitoring:

• Asset status reports (ASRs) and asset business plans;
• Resolution and disposition plans, and ratifications of workouts and sales;
• The transfer of corrected loans back to the master servicer upon resolution;
• REO properties managed by WFCMS; and
• Advancing activity and the collective advances made by the special servicer and master servicer for each securitization.

To the extent requested, or needed based on issues, the special servicing senior managers and asset managers conduct monthly meetings with third-party master servicers to review portfolio performance and watch list reports. This information is shared at the SSAC's quarterly meeting. The process identifies loans that are candidates for transfer to special servicing, provides support to the master servicers on problem loan issues (including the monitoring of advances), and fosters continued interaction when assets are transferred to the special servicer.

We believe the SSAC structure provides an effective control over the existing and future strategies while serving as a setting for exchanging views and presentations. The committee reviews action plans and their updates for each asset, and it monitors advancing activities for CMBS loans as needed but no less frequently than quarterly.

Loan recovery and foreclosure management

WFCMS displays effective and proactive loan recovery and foreclosure management protocols to efficiently resolve nonperforming loans across a broad spectrum of property types. Highlights include the following high level asset manager steps:

• Research the transferred loan, borrower, circumstances of the default, and determine if any potential mortgage loan seller breaches of representations and warranties have occurred.
• Obtain a signed pre-negotiation letter from the borrower and determine the borrower's intentions for the property and loan.
• Preserve correspondence and documentation in loan file.
• Develop an ASR and/or asset business plan in accordance with the pooling and servicing agreement (PSA) within 60 days.
• Order new third-party reports to review as may be required by the PSA or internal guidelines.
• Engage legal counsel as necessary.
• Initiate foreclosure action after workout or forbearance discussions are exhausted.
• Monitor the loan and property to ensure the ASR remains current during issue resolution or disposition.
• Receive approval of ASRs and their recommendations from team leaders or the head of special servicing, or both, based upon the required authorization per the WFCMS approval matrix.
• Incorporate into CAMS the resolution plans containing loan collateral data and prepare quarterly management reporting for review by the SSAC.
• Receive foreclosure recommendations from special servicing asset managers in conjunction with their team leader or the head of special servicing, based on the WFCMS approval matrix.
• Execute orderly asset transitions to REO status in conjunction with special servicing asset managers, legal department personnel, third-party attorneys, and loan administrators.
• Track all pending foreclosure dates, following a pre-foreclosure, due-diligence checklist.
• Complete and communicated electronically the title transfer notification within 24 hours of the foreclosure sale; formal notification occurs through the asset management reports' monthly updates.

We believe the high-level steps are evidence of a well-controlled process. At the same time, to minimize the timeline to obtain title in the event of an unsuccessful workout, higher-ranked servicers will generally dual track foreclosure actions while maintaining workout discussions with borrowers.

Table 11

REO management and dispositions

As a special servicer, WFCMS has had a limited experience with REO properties, although it demonstrates proactive REO management and sales oversight. Notable aspects include the following:

• As of Dec. 31, 2019, WFCMS' special servicing managed one REO asset with a UPB of $0.4 million. Given its small REO portfolio, WFCMS does not have dedicated REO asset managers. Loan asset managers also manage REO.
• After a title transfer, an asset manager is responsible for monitoring property managers, including approving budgets, controlling disbursement accounts, reviewing leases, and marketing and selling the properties.
• Within the first 60 days of taking title, the asset manager prepares a property business plan, which includes an operating budget and a recommended resolution strategy.
• A net present value (NPV) analysis is typically included in business plans. In order to proceed with an REO sale, the asset manager recommends the broker, sales price, and commission, using an NPV analysis to establish the sales price.
• Written approval of the business plan, including the broker selection, must be obtained from the head of special servicing prior to engaging a broker.
• The listing agreement, which contains established timelines, must also be approved by legal counsel. Upon selection of an offer, an asset manager will coordinate its closing in conjunction with outside counsel.

As indicated in table 12, WFCMS has had a limited amount of REO sales activity during the past few years, and it has primarily encompassed smaller-balance properties (with the exception of a Caribbean resort property sold during 2016, which comprised the bulk of the aggregate proceeds received). Its minimal REO disposition activity limits the usefulness of average hold period and sales proceeds/market value metrics.

Table 12

REO accounting and reporting

Controls and procedures for property-level accounting and oversight are sound. Highlights include:

• On or before a CMBS loan converts to REO, the asset manager will establish and maintain a single operating bank account for the REO property in the name of the trust to deposit income pay related expenses.
• Property managers are required to electronically submit monthly operating reports by the 15th of each month.
• The REO asset manager reviews the monthly financial and operating reports and reconciles REO bank statements to ensure that net operating income is properly controlled, reported, and reconciled to the bank statement accounts.
• The asset manager also oversees disbursements for all managed assets.
• Asset managers work with a third-party accounting company, which will selectively oversee and monitor the books of the property manager on a quarterly and annual basis. The accounting firm also prepares a formal annual audit report on CMBS assets, which is reviewed by the asset manager and the head of special servicing. We note, however, that no property manager audits have been performed in several years.

Subcontracting management

WFCMS handles the management and oversight of subcontractors in a controlled and effective manner and follows the following guidelines:

• The real estate technical services group (RETECHS), which is an independent bank department that provides third-party opinions on real estate risk or issues, is responsible for soliciting, reviewing, tracking, and approving subcontracting bids for these needs.
• RETECHS has a professional staff of certified appraisers and construction and environmental engineers in regional offices. Given this internal control, WFCMS does not maintain approved third-party vendor lists.
• RETECHS is responsible for ensuring vendor reports remain consistent with Wells Fargo's corporate polices, as well as verifying that vendors comply with federal regulatory requirements and safe and sound banking practices.
• RETECHS appraisers coordinate the engagement of fee appraisers to prepare valuation reports and hire independent third-party appraisers to perform desk reviews of third-party appraisals to ensure the valuation methodologies employed are reasonable and in compliance with industry standards. All appraisers must be state licensed.
• Approved fee appraisers' performance is tracked via a standardized performance report, and appraisers are removed from the list if three unsatisfactory appraisals are submitted in any 12-month period.
• Environmental audits are ordered for all pending foreclosures. RETECHS staff order and review all phase I and other required reports. RETECHS maintains an approved list of third-party consultants.
• Appraisers are required to include an environmental site inspection checklist with their reports, and only the department's senior management can approve phase II and III reports.

We believe WFCMS maintains adequate controls for engaging property management and brokerage firms. Asset managers (as opposed to RETECH) are responsible for selecting and overseeing the appropriate property management firm, using past relationships or interviews to select vendors. In order to be selected, property management companies must have:

• Expertise specific to the property type;
• Well-established accounting departments that prepare budgets, collect rental income, pay expenses, prepare monthly reports, and perform account reconciliation;
• Access to a segregated account for funds generated by the property and commitment to send funds generated to the appropriate accounts on a monthly basis.

Further controls for engaging property management and brokerage firms include:

• Before a property management agreement is executed, the head of special servicing must supply written approval.
• When soliciting broker bids for listing properties, asset managers utilize an established network of brokers and they generally receive at least three proposals.
• The asset manager then prepares an updated business plan recommending the broker, sales price, and commission, utilizing an NPV analysis to establish the sales price.
• Written approval of the business plan, including the broker selection, must be obtained from the head of special servicing prior to engaging a broker. The listing agreement, which contains established timelines, must also be approved by legal counsel.

Performing loan surveillance

The special servicing team performs surveillance on loan portfolios for which it is the appointed special servicer. The team focuses on identifying problem loans or loans approaching maturity with refinance risk. WFCMS uses their offshore support for these surveillance functions as the need arises. Responsibilities include:

• Assisting the PSR and asset management units with monitoring weaker and watch-listed loans that have the potential for future transfer to WFCMS' special servicing.
• Proactive monitoring for select B-piece buyers, providing securitization and loan-level reporting, including detailed updates on specially serviced and watch-listed loans, active consent requests, and approaching maturities.

Borrower requests

WFCMS addresses borrower requests in a well-controlled manner. Highlights include:

• During the last half of 2019, the special servicing team completed 59 CMBS borrower consent reviews, with an aggregate UPB of $1.6 billion, including 25 leasing consents and six assumptions. Such requests are managed under the head of special servicing.
• Asset managers review master servicer-prepared case memorandums (including those prepared by WFCMS when it also serves as master servicer) and prepare recommendation memos to the required internal parties designated through WFCMS's special servicing approval matrix.
• Third-party CCR approvals are subsequently obtained as dictated by the underlying PSAs.

Legal department

WFCMS has two legal staff available to support special servicing asset management. Responsibilities typically include general servicing guidance, PSA interpretation, and engagement of outside counsel. Notable aspects of the legal function include:

• WFCMS chooses external legal counsel from an approved list of firms, and they must be approved by Wells Fargo internal counsel; however, standardized agreements are not used.
• In addition to assisting with closing property sales, external legal counsel is used for drafting or reviewing loan modification documents, foreclosures, remedies, and workout documentation, or for ongoing legal advice used for a particular loan situation (e.g., a workout or bankruptcy--familiarity with the specific PSA and Real Estate Mortgage Investment Conduit provisions is required).

Financial Position

The financial position is SUFFICIENT.

Related Research

• Wells Fargo Commercial Mortgage Servicing Servicer Rankings Affirmed; Outlooks Are Stable, May 15, 2020
• Select Servicer List, May 1, 2020
• U.S. Commercial Mortgage Servicers Preparing For Impact From COVID-19, April 3, 2020
• Wells Fargo & Co., Oct. 29, 2019
• Analytical Approach: Global Servicer Evaluations Rankings, Jan. 7, 2019
• Servicer Evaluation: Wells Fargo Commercial Mortgage Servicing, Sept. 28, 2018