Rationale

S&P Global Ratings' rankings on Wells Fargo Home Mortgage (WFHM), a division of Wells Fargo Bank N.A. (a subsidiary of Wells Fargo & Co.), are ABOVE AVERAGE as a residential mortgage loan primary (prime) and subprime servicer. On Oct. 13, 2021, we affirmed the rankings (please see "Wells Fargo Home Mortgage ABOVE AVERAGE Primary And Subprime Servicer Rankings Affirmed; Ranking Outlook Stable," published Oct. 13, 2021). The ranking outlook is stable.

Our rankings reflect WFHM's:

• Experienced management team and overall good turnover rates;
• Comprehensive training regimen;
• Multiple levels of internal controls within the servicing organization that provide comprehensive oversight;
• Good systems environment;
• Well-designed complaint and vendor management processes;
• Competitive servicing metrics compared with those of its peers;
• Sound default processes; and
• Recent penalties issued against the company by The Office of the Controller of the Currency (OCC).

The OCC issued a $250 million civil monetary penalty, along with cease and desist proceedings, against the company for deficiencies in its loss mitigation processes, which included the issuance of two separate consent orders.

The consent order(s) of Sept. 9, 2021, primarily cited: "(1) unsafe or unsound practice(s) related to material deficiencies regarding the Bank's loss mitigation activities, including loan modification decisions and operational practices, and inadequate Independent Risk Management and Internal Audit of the Bank's loss mitigation activities and (2) violations of the 2018 Consent Order, AA-EC-2018-15, related to enterprise-wide compliance risk management," as reasons for the latest actions.

It further stated: "While the Bank has taken steps to comply with the 2018 Order and is committed to addressing the remaining requirements in the Order, the Bank has failed to fully and timely implement effective and sustainable corrective actions required by the Order related to enterprise-wide compliance risk management and customer remediation and is thereby in violation of the 2018 Order." WFHM cannot acquire bulk mortgage servicing rights until the consent order is terminated.

Since our prior review (see "Servicer Evaluation: Wells Fargo Home Mortgage," published Jan. 14, 2021), the following changes and/or developments have occurred:

• WFHM announced the hiring of a new executive to oversee the home lending servicing division, replacing the prior leader who retired.
• It submitted training course content to several areas to verify the materials are up to date, especially as they pertain to default.
• There was some reorganization within the internal controls environment affecting the first and second lines of defense.
• A new tool was implemented to enhance complaint process reporting.
• The company retained a vendor to assist with inbound loss mitigation calls.

The ranking outlook is stable. WFHM's servicing metrics remain generally competitive with, or better than, peer averages. The company continues to make revisions to the organization designed to improve performance and strengthen controls. We expect WFHM to remain a capable residential mortgage servicer, but will monitor its progress in complying with the OCC consent order, as further adverse actions or risk management control deficiencies (either by the OCC or another regulatory agency) could have an impact on the ranking.

In addition to conducting a virtual meeting with servicing management, our review includes current and historical Servicer Evaluation Analytical Methodology data through June 30, 2021, as well as other supporting documentation provided by the company.

Profile

WFHM is an approved seller/servicer for Fannie Mae, Freddie Mac, Veteran's Administration (VA), Federal Housing Administration (FHA), and many private investors. Both prime and subprime accounts decreased for the six-month period ending June 30, 2021; the subprime portfolio continues to decline as it is a runoff portfolio (see table 1). The geographic distribution remains satisfactory, with the largest concentrations in California for prime and Texas for subprime (see table 2). WFHM has 11 servicing centers located throughout the U.S., though the two largest sites are in Iowa (the main site) and Texas. It uses captive offshore staff based in India and the Philippines for administrative tasks such as creation and quality review of modification documents, real estate tax payments, and investor claims.

Management believes the WFHM-owned and government sponsored enterprise (GSE) portfolios will continue to grow while private-label and government loans will decrease. Due to the COVID-19 pandemic, approximately 88% of the staff continues to work remotely.

Table 1

Table 2

Management And Organization

The management and organization subrankings are ABOVE AVERAGE for prime and subprime servicing.

Organizational structure, staff, and turnover

WFHM has an experienced management team with good turnover rates.

• Senior managers average 21 years of industry experience, while middle managers average 24 years of experience.
• Senior and middle management average 17 and 16 years of tenure, respectively, both of which are better than peers.
• The overall turnover rate for management is 6.1% and 19.5% for staff. The former is competitive with similar servicers, while the latter is somewhat higher.

WFHM recently announced a new head of home lending servicing. The company centralized and consolidated several separate groups previously in the business lines into a centralized business excellence division within home lending. The groups together focus on items such as support, policy and process management, risk program implementation, and issue remediation, resolution and redress.

Training

WFHM's training regimen provides management and staff with a comprehensive learning experience. The department consists of several different groups, including instructional designers, content curators, and regional facilitators. While most of the training department supports the entire bank, the Line of Business Consulting and Enterprise Functional Training teams support specific business lines. In the last year, management updated several training regimens, such as those for customer contact, home preservation underwriting, and account resolution, to ensure the content reflects current industry trends. Some highlights of the program include:

• A risk/compliance/high-priority team that provides additional oversight on course content for offerings considered to have enhanced risk (e.g., complaint management);
• Between 144-200 hours of classroom training for contact positions in customer service, collections, and loss mitigation;
• Approximately 40-80 hours of on-the-job (OTJ) instruction for the above positions; and
• Eighty hours of training for new hires on the short sale or deed in lieu teams and 12 hours for foreclosure document execution staff.

Systems and technology

WFHM has effective technology. The company continues to focus on enhancement projects to further streamline and automate servicing tasks across various loan administration functions. Other notable features include:

Servicing system applications 

WFHM's systems architecture includes:

• The Black Knight Financial Services mortgage servicing package, which is the primary system of record;
• A proprietary customer service and collection desktop application;
• A collection/workout software package that allows for earlier identification of loss mitigation candidates; and
• Several proprietary products used in the default process, including a loss mitigation option tool, income review calculator, and a bankruptcy payment application.

Business continuity and disaster recovery 

Disaster recovery and business continuity plan (BCP) controls include:

• An annual risk assessment, including a business impact analysis, and quality review of the disaster recovery plan;
• Annual tests of the disaster recovery and BCP, with the 2021 test resulting in no issues; and
• An annual review of the BCP by the Enterprise BCP group.

Cybersecurity 

Information security controls include:

• A separate area maintaining oversight over data protection, cybersecurity, and application security; and
• A dedicated cybersecurity team, which conducts penetration testing and monitors internal and external network threats. The last penetration testing performed in 2021 disclosed no material issues.

Internal controls

WFHM's comprehensive controls rely on multiple review mechanisms to provide adequate safeguards against risk of loss due to noncompliance with investor or regulatory requirements. Management uses a proprietary system, Shared Risk Platform (SHRP), as a common governance, risk, and compliance application for tracking issues across the various control functions.

Policies and procedures 

WFHM has well-written policies and procedures. Appropriate controls are in place for reviewing, approving, and disseminating any revisions, which include annual (at minimum) reviews by management to ensure the manuals are updated. Possible legal or compliance approval is required for changes affecting regulations. There is a revision history maintained within the change control system. Letters undergo a similar process, although a separate application retains the current and prior version(s) history.

Quality assurance (QA) (and call monitoring) 

Assurance and monitoring performs the first line of defense for WFHM. This group uses a proprietary platform, Quality Testing Tool (QTT), which houses all testing scripts, testing samples, and results. There is a monthly meeting with the line of business to discuss any discrepancies. If an item is deemed an "incident" (generally higher risk issues) by the line of business and assurance, it is input into SHRP for corrective action plans, with remaining issues tracked in QTT for remediation. If the line of business and assurance cannot agree if the issue is an incident, they adopt a conservative approach and still input it into SHRP. Reports produced indicate a defect rate, attributes, and an analysis explaining any trends. It is management's intent to eventually be able to produce data-driven reviews that analyze 100% of a population of loans versus performing just a sampling.

Business Control Management (BCM), which is independent of the servicing organization, assesses and manages the risk and control environment. Segmented into dedicated teams, it assists the lines of business with risk control self-assessment (RCSA); BCM also monitors all results and corrective action plans from the QA and Independent Testing and Validation (IT&V) groups. BCM reviews the issue validation results for sustainability and confirms the item can be closed with the line of business. They also produce key risk summary reports (e.g., issue validations, aged-issue inventory), as well as dashboard reports for executive management reflecting trends affecting issues, corrective actions, matters requiring attention, and other items.

A separate investor agency testing team, formerly within IT&V, is now within the first line of defense and completes reviews of agency loans on a monthly, quarterly, semi-annual, or annual basis.

RCSA testing is completed by an evidence-based control evaluation (EBCE) team outside of the line of business.

Compliance and quality control 

The IT&V organization underwent some structural changes. There is now a separate Consumer Lending – Real Estate team within IT&V divided into separate groups that handle origination and servicing responsibilities. The overall IT&V executive manager reports directly to the chief risk officer. The testing cycle for low inherent risk items can take as long as five years. Management indicated few servicing areas are considered low inherent risk. IT&V is transitioning to a new approach for "major requirements" (MR) testing. These encompass four themes: RCSA, compliance, targeted, and issue validation reviews. The department plans to reserve approximately 10% of its staff for event-driven emerging risk testing. Additionally, IT&V is converting from an 18-month cycle plan to a calendar year plan. Other highlights include:

• An offshore team that performs testing and validation on a monthly and quarterly basis of certain processes;
• Unfair, Deceptive, or Abusive Acts or Practices regulation testing was segmented into call and fair lending testing;
• An annual testing plan, based on risk and control effectiveness, resulting in frequencies of 12 months to 60 months, with higher risk processes performed generally annually;
• The planned introduction of re-performance reviews, which entail IT&V re-testing the EBCE results to verify they reflect the same outcomes; and
• Test results stored in SHRP, and engagement reports created to track issue remediation and validation.

Once an item is remediated and completes a sustainability period, IT&V performs final testing to validate the issue is closed. Low risk items, however, are not subject to issue validation.

Risk Asset Review (RAR) is part of Independent Risk Management (IRM) per the Company's Risk Management Framework. RAR's examinations of credit portfolios test a department's adherence to company and line of business policies, and identifies areas for improvement or revision. Other attributes include:

• Annual reviews of processes affecting foreclosure and Federal Financial Institutions Examination Council charge-off attributes;
• A proprietary system to track reports and recommendations;
• A risk-based approach to evaluation of risk ratings; results may escalate examinations of other areas;
• Examinations may include one or more recommendations; recommendations requiring a written response (formerly known as key recommendations) are input into SHRP; and
• Failure of a recommendation requiring a written response to be acceptably resolved would be escalated to the appropriate credit risk committees and potentially to the board of directors.

Internal and external audits

Wells Fargo Internal Audit (IA) reviews the servicing areas via two separate teams totaling approximately 40 auditors, who are divided between performing and default servicing. Many of its team members hold advanced certifications (e.g., Certified Internal Auditor). IA performs examinations on a 12- to 48-month cycle depending on the inherent risk rating on the auditable unit and previous results. The risk-based audit plan is reviewed annually. It uses a separate application for tracking remediation issues, though all issues are downloaded into SHRP. In addition to the regular audit cycle, there are targeted and project audits as well as ongoing business monitoring to focus on emerging issues. Other attributes include:

• An approximate 12-month audit cycle, with an average of 18 months, for areas of servicing considered critical and high risk;
• Audit report grades of "effective," "needs improvement," and "weak";
• A four-tier rating ("critical" to "low") for issues within the report;
• Quarterly reports detailing the plan status and results of the audits, which are forwarded to the audit and examination committee;
• Validation of all critical, high-risk, and moderate findings that are identified by other areas, the latter of which is a new process;
• Monitoring of status plans monthly on critical or high-risk items and quarterly for moderate risk items; and
• Validation of remediation plans for critical, high-risk, and moderate-risk findings within 90 days of corrective action.

WFHM provided a summary of the 2020 and 2021 IA and IT&V reports, which represent different lines of control, and we noted that most reports achieved satisfactory results. Remaining reports that had findings either had the issues remediated or were in the process of resolution and validation. The company's 2020 Regulation AB statement disclosed one instance of noncompliance affecting custodial accounts in which, due to a ratings downgrade, it no longer satisfied the ratings requirements affecting account eligibility for certain securitized transaction agreements but we did not consider it to be material. This finding was also mentioned in the 2019 Reg AB.

Complaint management

Generally, the respective business unit handles standard customer complaints. The enterprise complaints management office (ECMO) handles complaints across the entire consumer lending organization. The team addresses all escalated complaints, including those from social media. The full transitioning to a new complaint management and tracking system (enterprise complaints management platform or "ECMP") was delayed due to the COVID-19 pandemic and the need to integrate certain functions from the existing platform into ECMP. Management expects all of home lending to be integrated onto ECMP by second quarter 2022. Currently, both systems are in use and information is exchanged between the two applications. Other highlights include:

• An approximate six-week training program for new staff;
• A dedicated ECMO employee assigned to the case to research the issue;
• An outreach call placed within two days to obtain more information from the customer (if possible), and an acknowledgement letter sent within five days;
• A second letter sent to customers whose inquiries are not resolved within 10 business days, informing them that a resolution is still in process;
• A pre-response sampling completed based on staff tenure/experience/performance (e.g. 100% review for new employees and regulatory complaints);
• An operational risk review completed on higher risk complaints by the ECMO QA team; and
• A random monthly sampling of all closed complaints, which consists of approximately four letters monthly per employee, by a different group.

Management implemented an enterprise complaints, data, analytics and reporting tool (CDAR). CDAR allows for better root cause analysis, monitoring, and modeling of the complaint process. Additional training and coaching were completed in the department to improve employee performance and concurrently, the quality of responses forwarded to customers.

Vendor management

The third-party vendor management (VM) group is responsible for vendor oversight, primarily as it pertains to its attorney network. The line of business mainly retains responsibility for managing and overseeing all non-attorney relationships. However, VM monitors the service-level agreements (SLAs). The department employs a vendor provided system for monitoring third-party risk. An offshore team performs checklist-driven administrative and data entry tasks. Highlights include:

• A dedicated attorney management team independent of the business unit to manage the scorecards, referrals, etc.;
• Captive offshore staff members in India to perform document reviews of work performed by foreclosure and bankruptcy attorneys;
• A corrective action group to monitor completion of any action plans;
• A regulatory compliance risk management department, which performs ad hoc reviews to determine departmental compliance; and
• Monitoring of corrective action plans and results, SLAs, and scorecard results.

Insurance and legal proceedings

WFHM 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, WFHM says it is not subject to, or knowledgeable of, any material lawsuits that could affect the servicing operations.

However, the OCC in a Sept. 9, 2021, news release indicated that it "assessed a $250 million civil money penalty against Wells Fargo Bank, N.A., of Sioux Falls, S.D., based on the bank's unsafe or unsound practices related to deficiencies in its home lending loss mitigation program and violations of the 2018 Compliance Consent Order." It further stated that "The OCC also issued a Cease and Desist Order against the bank based on the bank's failure to establish an effective home lending loss mitigation program. The order requires the bank to take broad and comprehensive corrective actions to improve the execution, risk management, and oversight of the bank's loss mitigation program. The order restricts the bank, while the order is effective, from acquiring certain third-party residential mortgage servicing and requires the bank to ensure that borrowers are not transferred out of the bank's loan servicing portfolio until remediation is provided, except as required by an investor pursuant to a contractual right." For more information, please refer to the OCC website.

Loan Administration– Primary and Subprime

The loan administration subrankings are ABOVE AVERAGE for primary and subprime servicing.

New-loan boarding

A data integrity team oversees new loan boarding. The capital markets loan operations quality assurance team performs a document-to-system review utilizing a sampling methodology, conducting monthly reviews on high risk loans and quarterly reviews on lower risk loans. The department performs more than 50 data driven exception tests affecting approximately 300 data fields. The department transfers any loans with possible inaccurate data to a web-based queuing system for additional review. WFHM electronically boards 100% of mortgage loan data to its servicing system. A small offshore team processes boarding exceptions and average boarding time is two days.

Payment processing

WFHM has prudent controls in its cash management department. Attributes include:

• Cashiering area turnover of 9.2%;
• A call center to support customer service and collection staff;
• An electronic processing rate of over 99%; and
• A specialized team to handle bankruptcy cash processing.

Investor reporting

The well-developed risk-management policies, along with strong controls, facilitate timely and accurate reporting to its diverse investor base (see table 3). Highlights include:

• A competitive turnover rate of less than 8%;
• A 100% electronic reporting and remittance rate; and
• System automation, which assists in validating modification terms, though manual inputs require dual reviews.

Management indicated that the main reason for the large number of aged items is due to COVID-19 deferrals (i.e., timing issues involving system maintenance updates with its investors and expected reimbursement of the deferred amounts to WFHM).

Table 3

Escrow administration

Approximately 88% and 86% of the prime and subprime portfolios have escrow accounts, respectively. Some insurance functions, such as customer service, are handled by a vendor. The 9.6% turnover rate for escrow staff was slightly higher when compared to peers. Staff are available to assist the customer service agents to answer questions, run escrow analysis, join conference calls, or accept transferred calls. The satisfactory features and controls include:

• Internal staff members to handle loss draft claims aged more than 90 days;
• No issues reflected in the company's lender placement and cancellation rates, in our opinion;
• No non-reimbursable tax penalties, which is better than its peer group;
• A 0.96% abandonment rate and 25-second average speed of answer (ASA) reflected in the insurance vendor's call center metrics, both of which we consider to be solid metrics;
• Monitoring of insurance vendor through monthly meetings, call monitoring, on-site meetings, quarterly business reviews, and performance grading; and
• Monthly monitoring of approximately 20 vendor calls affecting (separately) insurance and claims conversations, as well as 10 complaint calls.

Management is developing with its insurance vendor a new tool that will allow the submission of items such as insurance claims and virtual inspections via mobile devices; additionally, they plan to introduce a process whereby insurance claim checks can be directly issued to the homeowner pursuant to investor guidelines.

Mortgage reconveyance

There have been no large penalties for noncompliance regarding filing of reconveyances. Customers may make a one-time automated clearing house payoff on their accounts if the balance is less than $100,000.00. Approximately 87% of accounts for the one-year period ending June 30, 2021 were electronically released.

Special loans administration

Management has appropriate controls over its adjustable-rate mortgage function, including dual reviews of the indices to validate there are no errors. Loans affected by the Servicemembers Civil Relief Act undergo multiple oversights to ascertain if they qualify for benefits under the Act.

Customer service

WFHM provides a good level of customer service. Speech analytics is employed to assist in identifying customer dissatisfaction. Customer service uses the new complaint management portal, ECMP, to log resolved complaints and escalate unresolved complaints to the ECMO. Certain customer service teams support the home preservation function by assisting with COVID-19 forbearance requests.

WFHM employs a domestic customer service vendor that handles approximately 52% of calls, which is a large increase from 29% as reflected in the prior analysis. The increase from the prior year was due to WFHM converting many customer service teams to assist with COVID-19 assistance inquires thus resulting in more volume being handled by the vendor. The vendor handles less complex borrower inquiries. The chat function was suspended during the COVID-19 pandemic but was recently reinstated. A dedicated chat group handles both performing and default inquiries. WFHM reported the following service indicators:

• Turnover in the customer service department is 7.2% for management and 23.7% for staff, both of which are similar to its peers.
• Generally, customer service staff handle calls from borrowers who are up to 30 days delinquent.
• There is 100% call recording.
• There was a 57% interactive voice response (IVR) unit capture rate and a 78% first-call resolution rate.
• A vendor sends email customer satisfaction surveys.
• WFHM monitors five calls per agent monthly, which is similar to the amount monitored by its peer group.
• The average chat speed of pickup was 21 seconds with a 6.5 minute average chat time.

The department is in the process of replacing its email communication system with a more robust application, it implemented the Mini-Miranda warning on calls received through the IVR when the account is one-day delinquent, and automated many email responses pertaining to borrower online inquiries (with an agent reviewing the response before it is forwarded to the borrower). The company plans to simplify many of the customer service and collection procedures by early 2022 as management wants to adopt more consistency when communicating with a borrower.

Customer service and collection call center metrics reflect ASA and abandonment rates that were much better than peers, while loss mitigation metrics were worse (see table 4).

Table 4

Default management

WFHM has proactive default policies in place and maintains a housing counselor website that provides information on future home preservation workshops and account manager contact information, among other items. Within the workout spectrum, individuals commonly have certain delegated levels of authority in areas affecting underwriting, short sales, and deed-in-lieu, which are reviewed on a regular basis.

WFHM evidenced very competitive experience and tenure metrics. Many departments had better management and staff experience such as in collections, loss mitigation and bankruptcy although staff tenure was also lower in these same areas. Collection, foreclosure, bankruptcy, and REO staff (also REO management) turnover levels were higher than peers with the remainder being competitive with peers (see table 5).

Table 5

Collections

The company uses a proprietary call management system that sources risk-based scoring to target customer contact (as early as four days past due) on accounts that pose the greatest likelihood of nonpayment. The department (known as account resolution) uses various methods to contact its delinquent customers, including text messages, chat, and emails, the former of which is performed by a vendor. A multiple loan segmentation tool allows an agent to create a workout plan to help get the borrower current on all loans (auto, home, credit card, etc.); due to the COVID-19 pandemic, the department suspended its previous approach in which an agent would call the customer and address delinquencies across all their WFHM products. However, they plan to reintroduce this approach in the near future.

Management now employs the same application as used in customer service for collection processes, which allows each group to assist the other as needed with their job functions. It is the company's intent to share more functionality between customer service and collections. Default rates have decreased for the six-month period ending June 30, 2021 (see tables 6 and 7). Some key features include:

• Secure chat that can be accessed via the website or mobile app, and transcripts are retained for three years;
• Email reminders sent between the 8th-11th day of default based on risk score, which also have a link to the website;
• Expanded use of speech analytics through converting speech to text, allowing for more targeted word searches based on the agent's conversation;
• The use of text messages (as early as the 7th day of default) for payment reminders and to contact customers affected by natural disasters;
• Monthly monitoring of five calls per collector, which is similar to the amount monitored by other servicers in its peer group; and
• Combined promise-to-pay success rates in the 30- and 60-day buckets of 83%.

Table 6

Table 7

Loss mitigation

The single point of contact (SPOC) handles many functions, such as working with the borrower on different loss mitigation options (see table 8) and communicating decision results. The high percentage of accounts reflecting modifications includes COVID relief options, the majority of which were payment deferrals. Different SPOC teams address borrowers in bankruptcy, mediation, and more. There are separate document processing (onshore and offshore) and SPOC teams. Management indicated that as of August 2021, approximately 200,000 accounts remained on a forbearance plan. During the COVID-19 pandemic, the company trained many of its branch bankers to handle borrower forbearance requests as the branches were closed at the time and there was a large volume of borrower calls regarding that topic. Highlights of the loss mitigation process include:

• Retaining a third-party vendor in late 2020 to assist with inbound calls regarding COVID-19 forbearance requests, with a separate group within the SPOC organization monitoring their performance;
• The ability for customers to leave a voicemail for the SPOC or choose to contact another available SPOC;
• The ability for borrowers to upload information and view the status of their workout via a web portal;
• A SPOC survey, whereby a supervisor places a call to the customer if the experience was unsatisfactory;
• A second-level review of all denied and approved workouts at present due to low volume, but this process will change in the future (e.g., any approvals on lower risk files and those from high-performing staff will not require another review);
• Appeals handled by different underwriters;
• A default servicing credit quality team to perform random monthly reviews on approvals or denials affecting retention options. The team performs semiannual reviews on liquidation options to validate the assessments; and
• Monthly monitoring of five calls of the SPOC, which are similar to other servicers.

Management implemented a decision-making tool in the underwriting area that now is applied for GSE and FHA loans; they plan to have all investors on the application by approximately mid-2022.

Table 8

Foreclosure and bankruptcy

WFHM has good controls and processes in place to manage legal actions. The department reviews accounts before legal referral and foreclosure sale to ensure all required actions were met. Highlights include:

• A separate team to oversee timeline management and any escalations;
• A litigation process in the foreclosure system, which assists in monitoring and controlling contested foreclosures;
• An exception team to complete a checklist before a scheduled sale to verify there are no exceptions; and
• No mortgage insurance claims denied and 7% curtailed, though the dollar amount was minimal.

The bankruptcy area consists of separate front- and back-end operational groups. Staff in India handle tasks related to loan reconciliation, gathering relevant documents, and ordering valuations. Highlights include:

• Electronically ascertained bankruptcy filings, case, and docket information;
• The National Data Center trustee database, which allows staff to access electronic payment applications on bankrupt loans;
• Almost no rejected proofs of claim; and
• An internal quality control team to review any signed documents to verify the accuracy of the information.

There is a separate toll-free number for affected parties to contact the company regarding vacant properties or those with code violations.

There is a separate QA team that performs a sampling review of post-claim filings of all mortgage insurance claims. Currently, the department uses the system for filing claims on FHLMC accounts, but plans to employ it for its remaining investors by approximately 2023.

Real estate owned (REO)

Premiere Asset Services (PAS), a division of WFHM, manages REO and property preservation functions for different clients in addition to WFHM. An offshore team assists in reviewing property inspections. Highlights of the REO process include:

• A proprietary application to assist in ordering inspections and registering vacant properties;
• Listing REO properties on the PAS website;
• An internal team to monitor the vendors through performance scoring, with enhanced scorecards and performance expectations completed in 2020;
• Internal staff to perform ad hoc inspections of properties to ascertain the quality of the vendor's work;
• Auctions employed on less than 10% of properties; and
• An average marketing time of 374 days for prime accounts and 238 days for subprime loans.

WFHM has a gross sales-to-market value ratio of 108% and a net sales-to-market value ratio of 100% for the prime portfolio. The gross sales-to-market value ratio is 91%, and the net sales-to-market value ratio is 83% for the subprime portfolio.

Financial Position

The financial position is SUFFICIENT.

Related Research

• Select Servicer List, Oct. 13, 2021
• Wells Fargo Home Mortgage ABOVE AVERAGE Primary And Subprime Servicer Rankings Affirmed; Ranking Outlook Stable, Oct. 13, 2021
• Various Rating Actions Taken On Large U.S. Banks And Consumer-Focused Banks Based On Favorable Industry Trends, May 24, 2021
• Servicer Evaluation: Wells Fargo Home Mortgage, Jan. 14, 2021
• Servicer Evaluation Spotlight Report™: Environmental, Social, And Governance Factors Have Consistently Powered Our Servicer Evaluation Rankings, Nov. 16, 2020
• Analytical Approach: Global Servicer Evaluations Rankings, Jan. 7, 2019