Rationale

S&P Global Ratings' ranking on Dovenmuehle Mortgage Inc. is ABOVE AVERAGE as a residential mortgage primary servicer. On Oct. 20, 2021, we affirmed the ranking (please see "Dovenmuehle Mortgage Inc. ABOVE AVERAGE Residential Mortgage Primary Servicer Ranking Affirmed; Ranking Outlook Stable," published Oct. 20, 2021). The ranking outlook is stable.

Our ranking reflects DMI's:

• Well-tenured and experienced senior management team;
• Good overall turnover levels for management and staff, despite staffing increases due to portfolio growth;
• Continued year-over-year portfolio growth, with loans of a similar investor type, geography, and delinquency characteristics;
• Well-diversified client base;
• Comprehensive training programs and solid focus on technology enhancements to facilitate increased remote learning with the increased staffing levels;
• Sound internal control environment, with multiple lines of defense and no material internal or external audit issues identified;
• Continued technological enhancements and automation for borrower self-service options, and to support the loan administration functions and portfolio and staff growth;
• Good delinquency rates and sound default management processes; and
• Generally competitive servicing performance metrics with those of peer servicers we monitor, except the generally lower management and staff experience levels in default management.

Since our prior review (see "Servicer Evaluation: Dovenmuehle Mortgage Inc.," published Oct. 16, 2020), the following key changes and/or developments have occurred:

• DMI instituted a dedicated application development team to focus on systems development, automation, and efficiency.
• The company revamped its borrower website and mobile application with various borrower self-service enhancements and a new aesthetic.
• The company's total staff count rose 46%, commensurate with the increase in the servicing portfolio.

The ranking outlook is stable. DMI is supported by a tenured and experienced senior management team, a sound internal control environment, and satisfactory servicing and default management operations with good servicing performance metrics. The company continues to improve its technology and systems sophistication and automate many of its manual processes to support staff and portfolio growth. We believe DMI will continue to maintain an efficient and stable residential mortgage servicing operation.

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

DMI is dedicated to subservicing residential mortgage loans. Originally a subsidiary of a bank, the company underwent an ownership change in 1991. William A. Mynatt, Jr. (DMI's chairman, president, and CEO) and a few other large shareholders are the primary owners of DMI, which is a privately held corporation formed in Delaware. The company's focus is subservicing loans for midsized to large commercial banks, mortgage bankers, savings banks, investment firms, state housing finance authorities, credit unions, and other financial entities.

DMI operates out of four locations: Lake Zurich, Ill.; Elgin, Ill.; North Aurora, Ill.; and Brookfield, Wis. The company's loan portfolio consists mostly of prime, first-lien mortgages (see table 1), but it also has a portfolio of home equity lines of credit and commercial loans. Since our last review, DMI has experienced substantial portfolio growth, primarily driven by its existing client base with loans of a similar investor type, geography, and delinquency profile (see tables 2 and 3). Additionally, the portfolio's geography remains well-diversified.

Table 1

Table 2

Table 3

Management And Organization

The management and organization subranking is ABOVE AVERAGE for primary servicing.

Organizational structure, staff, and turnover

DMI's senior management committee has four senior vice presidents and a first vice president who are responsible for oversight of all operations. The company's management team and staff exhibit sound experience, tenure, and turnover levels:

• Senior management has 25 years of experience and 23 years of tenure, with both metrics better than peers'.
• Middle management has nine years of experience and tenure. The experience level is lower than peers', while the tenure metric is higher.
• There was 4% overall turnover for management and 9% for staff, which is better than peers.
• DMI's total staff count increased significantly since our last review as a result of the company's year-over-year planned portfolio growth. Management says the levels of hiring have stabilized and have reached the necessary levels established in its staffing model.

DMI continues to have the majority of its staff working from home. Management says it is evaluating its return to office options and plans at present.

Training

DMI has 25 employees dedicated to training activities both virtually and at the company's four locations. Highlights and controls of the process include the following:

• Since our last review, DMI focused on converting classroom-based, instructor-led trainings into e-learning or distance learning for staff and creating micro-learnings and training aids for staff. DMI also increased its training and administrative staff as a result of the increased hiring and portfolio growth.
• The training area uses a centralized learning management system (LMS) to administer and develop training, uniformly distribute trainings, and track online and offline training completed by employees.
• Newly hired customer service and collections agents receive two and a half weeks of instructor-led training and an additional week and a half of on-the-job training. New single point of contact (SPOC) staff receive approximately one and half weeks of instructor-led training and three weeks of on-the-job training.
• DMI places particular focus on awareness of the Fair Debt Collections Practices Act regulation through a required minimum of annual training hours and certification for applicable staff.
• Training for new and existing employees includes classes focused on soft and technical skills, as well as industry-specific and servicing system knowledge.
• Newly promoted and hired supervisors and assistant managers complete the DMI leadership training series within 120 days of promotion or hire.
• There is a Future Leaders course, as well as management programs for current supervisors and managers, and a security awareness course.

Systems and technology

We believe DMI has effective technology to meet its primary loan servicing requirements. The company continues to focus on technology enhancement projects to further streamline and automate servicing tasks across operations. In addition, DMI has well-designed data backup routines and disaster recovery preparedness.

Servicing system applications 

DMI operates in a highly automated environment, using Black Knight's MSP servicing software (which it enhances for all primary servicing functions), Back in the Black (BITB) default workflow software, NewTrak for foreclosure processing and attorney coordination, and an enterprise-wide document management system. There is also an application development team that focuses on process automation to reduce manual input and improve data accuracy. New automation projects follow a defined change management and implementation process, with any changes in the automation logic that follow the same change management process.

DMI maintains a robust borrower website that provides borrowers with ample self-service functionality such as viewing loan details, making payments, signing up for or modifying automatic payment options, payoff quotes, escrow and SCRA management, loss draft claims information, loss mitigation application and status tracking, uploading loss mitigation and other documentation, and chat functionality. DMI also has a mobile application that provides the same functionality as its website. Since our last review, DMI modernized the "look and feel" of its website and added logic that tailors and flags certain options to borrowers at login based upon their current account status (e.g., loss mitigation in process).

Business continuity and disaster recovery 

DMI has a well-developed disaster recovery and business continuity plan (BCP), including response procedures to address operational disruption due to a pandemic event. Highlights and controls of the process include the following:

• DMI performs full tape backups weekly, with incremental backups created daily and stored offsite weekly.
• The company performs data mirroring to the backup data center, allowing for near real-time backup of critical data.
• Annual training is conducted for all employees on the BCP.
• In the event of a catastrophe that prevents DMI employees from performing their duties, any of the company's locations can be used to physically recover the operations.
• DMI's IT infrastructure was enhanced to cope with employees' increased remote working, which is another backup solution alternative.
• DMI has a backup generator in its North Aurora location for further disaster recovery capabilities.
• The company also maintains a recovery services agreement with a national vendor for additional call center and operational space, if necessary.
• A disaster recovery test was successfully performed within the past 12 months.

Cybersecurity 

DMI has an information security committee and a set of policies, procedures, controls, and staff resources dedicated to information and cybersecurity. There are ongoing internal intrusion prevention and detection measures of perimeter cybersecurity defenses, and a third-party vendor conducts an independent review annually of DMI's intrusion prevention controls. DMI also conducts annual tabletop exercises of its cyber breach incident response plan, and annual information security policy training and awareness programs are required for all staff, including quarterly enterprise-wide phishing exercises. Since our last review, DMI added an enhanced phishing e-learning class for new hires and to the annual compliance training.

Internal controls

We believe DMI has a sound internal control environment with multiple lines of defense that are independent of the business units.

Policies and procedures  

DMI has comprehensive policies and procedures (P&Ps). The compliance department manages the P&Ps and has technical writers who work with the operational business units to develop and maintain the content. The creation and maintenance of the P&Ps follow DMI's formalized change management process. All P&Ps, as well as changes to them, must be reviewed and approved by senior and business unit managers and the compliance department before they are published. DMI reviews the P&Ps annually or as changes dictate. Clients and employees have online access to the P&Ps. The letter library and changes to it are managed by the compliance department. Necessary changes to letters or the creation of new letters are coordinated between the business units and compliance.

Quality assurance 

DMI's first line of defense is its operational management, which is responsible for controlling risk at the business-unit level. Managers use pipeline reports, key performance indicators (KPIs), and results from monthly quality control (QC) testing to monitor their respective departments. DMI's governance, risk, and compliance (GRC) tool tracks any significant identified issues and facilitates issues management.

Compliance and quality control 

DMI's compliance and QC departments represent the second line of defense, and both are independent from operational management and report to the board of directors. An annual risk assessment is conducted to determine the areas of risk and the severity of those risks within the organization. Compliance staff is organized by department with subject-matter experts (SMEs) assigned to the business units. SMEs partner with the business units to provide advice on regulatory requirements and work with the operational departments to implement required changes to policies and controls. Dedicated staff members monitor new or changed laws and regulations, and provide detailed summaries to the compliance department and business unit managers. Compliance also provides regulatory communications to DMI's clients.

The QC area performs monthly reviews of the servicing and default functions through transactional testing, which is focused on compliance and agency requirements. QC reports the results to business unit managers to resolve noted issues, and the results are reported monthly to the senior committee. QC prepares and presents a quarterly trending report of findings to the board of directors. QC issue trends identified are reported and tracked in the GRC. QC also works with compliance to update the transactional testing question sets as needed for industry and regulatory changes, and reviews them at least annually with compliance and legal. DMI's reviews also include CARES Act requirements in the applicable operational areas.

Internal and external audits 

The third line of defense is DMI's internal audit department, which reports to the board of directors' audit committee and is independent from operational management. Highlights and controls of the process include the following:

• In our view, the company's audit team is sufficiently educated with adequate industry experience.
• The audit and review schedules are designed to address and satisfy traditional risk assessments and performance methodologies through loan-level sampling and adherence to policy and servicing standards.
• Risk assessments are completed at least annually to identify new or changing risks, including new requirements as a result of the pandemic, CARES Act, and other investor requirements.
• DMI performs audits of all operational areas on a 12-month schedule.
• The internal audit team uses the GRC for its issue management activities.

We believe the internal audits and other reviews are thorough and appropriately communicated to departmental managers for corrective action. Our review of completed QC reviews and internal audits completed in 2020 and year-to-date 2021 noted certain immaterial findings that have active or completed remediation plans. We also reviewed the Statement on Standards for Attestation Engagements 16, Regulation AB, and uniform single attestation reports for the 2020 period, which did not note any material exceptions.

DMI also maintains various management committees that oversee the operations. Each of the committees has a set scope of responsibilities to provide additional oversight of the related operations.

Complaint management

In our view, DMI maintains a comprehensive complaint management process. Highlights and controls of the process include the following:

• DMI uses a defined complaint policy and tracking system to manage complaint activities.
• DMI trains its customer service staff to resolve complaints, escalate complaints to team leads and supervisors for resolution, or to escalate complaints to the research team for resolution.
• Line-level agents can escalate calls to senior agents who will contact the borrower by phone. The senior agent becomes the borrower's SPOC until the borrower's issue is resolved.
• Complaints are escalated into one of three categories (presidential, case-escalated, and acceleration), depending on the channel through which the complaint arrived and the response time.
• Compliance staff trains and assists business units with responding to certain complaints that may require special handling because of regulatory or legal triggers. The research team addresses escalated complaints with compliance and legal when necessary.
• All written borrower inquiries are routed through a dedicated team that determines the inquiry's appropriate regulatory status, such as notice of error or Fair Credit Reporting Act.
• The inquiry is tasked into the servicing system, and a staff writer reviews, researches, and drafts a response to the inquiry. An independent audit team then reviews the draft response for accuracy and completeness before approval and release.
• QC performs an additional review of responses to borrowers' complaints post-submission for timeliness of response, content completeness, and accuracy of information provided.
• DMI performs a trending analysis of complaints at the client level on a monthly basis to determine the cause of issues. Borrower complaints are also reported weekly to clients.
• DMI acknowledges all complaints within the required five business days and resolves each within an average of eight days of receipt. Extension letters are mailed to borrowers in cases where additional time is necessary.
• DMI has a process with dedicated staff within the presidential team that identifies and resolves social media complaints.

Vendor management

We believe DMI has effective methodologies in place for assessing its third-party vendors. DMI has a centralized vendor management department within the QC area and second line of defense. The vendor oversight team is responsible for the program design, framework, and updates. The board of directors also has a vendor management committee that oversees and reports on the program. Highlights and controls of the process include the following:

• DMI uses vendor management software to automate the onboarding and oversight processes and manage the relationship with all vendors, including attorneys.
• The due diligence process focuses on the vendor's capacity and capability, financial position, information security, third-party audits, BCP, insurance, and exclusionary lists.
• The risk assessment evaluates the vendor's business criticality, access to confidential information, and reputational risk. The assessment also dictates DMI's review depth and frequency and ongoing monitoring.
• Each vendor is assigned a relationship manager, who is responsible for ongoing monitoring through vendor reporting, scorecards, and onsite visits.
• The QC area performs monthly reviews of work performed by vendors to provide the relationship managers with another monitoring tool. The relationship manager also performs monthly monitoring of vendor service levels and provides monthly scorecards to all high-critical vendors and quarterly scorecards to medium-rated vendors.
• Internal audit and vendor management teams coordinate to perform annual onsite reviews of all high-critical and medium-rated vendors. Results are reported to senior management and escalated to the board of directors, as appropriate, with remediation as necessary.
• Offshore vendors and any fourth-party relationships require additional diligence and risk assessments. Additionally, a DMI offshore project manager goes onsite for several months each year to provide training, and DMI's external accounting firm performs a security audit annually.

DMI's attorney oversight department manages the default attorneys vendors. The department uses experienced legal staff and staff attorneys to evaluate new attorney vendors, maintain monthly scorecards, participate in quarterly calls, and perform annual reputational reviews and onsite (or virtual) visits of the top 20 states by volume and any problem states (i.e., extended foreclosure timelines, etc.). The monthly scorecard metrics are focused on contractual service-level agreements and government-sponsored entity guidelines--which are broken down by state--including peer benchmarking. Additionally, attorneys must maintain and provide borrower complaint logs to DMI.

Insurance and legal proceedings

DMI 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 ABOVE AVERAGE for primary loan servicing.

New-loan boarding

DMI has the appropriate controls and procedures in place for loan boarding. Highlights and controls of the process include the following:

• The transfer and conversion department coordinates all loan transfers and sets up new loans received from clients on a flow basis.
• DMI boards 99% of new loans electronically, with an average boarding time of one business day. The company reviews all new-loan data against file documentation to confirm loan and servicing system integrity.
• For all new clients, DMI will audit 100% of boarded loans for the first 90 days and then audit 10% thereafter using optical character recognition technology.
• For bulk transfers, project managers organize the end-to-end process using an automated tracking system along with assigned business unit SMEs that review reporting and data mapping on all incoming transfers.
• DMI uses control stage gates to better manage and resolve open items between the internal business units involved and the client before moving to the transfer's next stage.
• In-flight loss mitigation processes exist pre- and post-transfer to identify the loan, communicate with the borrower, and meet the required regulations.
• There are dedicated resources and a process to track collateral files and missing documents that are requested from previous servicers and clients.

Payment processing

DMI has a sound and efficient cash management operation. Highlights and controls of the process include the following:

• DMI receives approximately 96% of its payments through electronic payment sources, with the remaining 4% being manual exceptions.
• Live checks that are received outside the lockbox, or exception items from the lockbox, are processed in a secure manner and stored in fireproof safes.
• Suspense funds are managed through systemic controls and in coordination with individual departments to post exception funds. Staff review periodic tracking reports to validate aging and funds posting.
• Managers review the balancing work performed by tellers, which includes reviewing the clearing accounts for items such as shortages and overages. New employees' work is audited by management to confirm accuracy.
• Staff turnover in the payment processing area was 6%, which is similar to peers.

Investor reporting

DMI has appropriate oversight and controls to ensure timely reporting and remitting. Highlights and controls of the process include the following:

• The department maintains an appropriate segregation of duties and is divided into four units based on investor reporting requirements (see table 3).
• DMI uses specialized proprietary software to more efficiently handle canceled disbursement checks, loan-level principal and interest reconciliations, and electronic delivery of reconciliation packages.
• The data gathering process is 100% automated, with a 99% electronic reporting and remitting rate, as some smaller investors cannot receive electronic reporting and remittances.
• The company requires manager sign-off on all reports and reconciliations.
• DMI reported 722 open reconciling items aged over 60 days and 961 aged over 89 days, with those items over 89 days resulting in a credit balance in the accounts. While this is an elevated number of items, these items and credit balances are waiting to be drafted by the investor and are not unidentified items.
• There was 9% staff turnover in the investor reporting area for the current period, which is similar to peers'.

Escrow administration

DMI operates a satisfactory escrow administration department that benefits from the effective use and oversight of its third-party vendor relationships for real estate tax, as well as for hazard and flood insurance. DMI conducts all escrow analyses internally and handles phone inquiries related to the analyses, taxes, and insurance. Highlights and controls of the process include the following:

• DMI meets with vendors monthly, conducts regular onsite visits, and uses a monthly scorecard to monitor vendor performance against service-level agreements.
• QC staff performs vendor testing monthly and reviews QC testing conducted by the vendors.
• Loss draft claim calls and responsibilities are handled by specialized escrow staff, which also serve as a borrower's SPOC. In addition, QC and inline quality assurance (QA) staff performs call listening for a total of 10 calls per month per agent.
• DMI has a proprietary loss draft claims system to automate the lifecycle of the process. This system also provides DMI with the added benefit of tailoring the process and automation to its diverse client base.
• Management monitors various performance metrics and reporting to validate that loss draft claims are processed timely.
• Lender-placed insurance and cancelation rates are satisfactory.
• DMI reported that tax penalties are $0.02 per loan, which is similar to peers'.
• The escrow department staff turnover was 9%, which is similar to peers'.

Mortgage reconveyance

DMI had 4.5% of reconveyances in processing and out-of-statutory compliance, but reported no penalties as a result. This is a 1.5% decrease from the 6% in the first half of 2020, which was due to a vendor experiencing brief operational challenges related to COVID-19 and the increased paid-in-full volumes as a result of the market's refinance activity. Management says this issue continues to improve as the vendor has returned to normal operations. Additionally, there were no paid-in-full loans penalized for failure to timely reconvey. Management conducts periodic meetings with compliance to ensure that state requirements and the release templates are up to date.

Special loans administration

DMI maintains controls for its adjustable-rate mortgage (ARM) loans. The rate index values have dual reviews to ensure the validity of any input data, and a random QA sample is conducted for all ARM changes for affected plans. Automated checklists are used for all processes, and peer reviews are conducted to validate accuracy and completeness. Management performs periodic audits of the checklists. DMI also has a dedicated call center queue to field more advanced questions about special loans products.

Customer service

DMI has call centers in Lake Zurich, Elgin, and North Aurora, Ill., and Brookfield, Wis. The call centers are fully automated, employing various technologies that include an automated call distributor and a voice response unit. Highlights and controls of the process include the following:

• Since our last review, there was a 90% increase in DMI's customer service staff (i.e., phone agents, correspondence, and research), due primarily to the increase in its portfolio. This increase in staff also included the staff promotion and addition to supervisory and management roles, which further enhanced the supervisor-to-staff ratio.
• There was no management turnover and 10% turnover for staff, which is better than peers'.
• Customer service training is overseen at the corporate level and by a dedicated manager and trainers in the department.
• A three-tier customer service agent model provides career path planning.
• The customer service call center metrics are better than peers' and represent an improvement since our last review (see table 4).
• The first-call resolution rate is 95%, which is better than peers'.
• There is an assistance queue staffed by team leads, supervisors, and seasoned agents that provide support to less experienced agents during calls, if necessary.
• Dedicated QA analysts monitor the call center staff's quality by listening to a minimum of 10 calls a month per agent, which is similar to peers. Additional calls may also be monitored for new agents.
• The results of the monitored calls are reported to business management monthly, and agents who score less than 90% can have incentive compensation affected.
• DMI uses screen capture technology during the call review and monitoring processes.
• The correspondence department also handles customer inquiries through live chat and secure messaging via DMI's website.
• Customer satisfaction surveys are automatically offered to all borrowers at the end of each call.

Table 4

Default management

DMI's default operations management and staff exhibit overall satisfactory industry experience, tenure, and turnover metrics (see table 5). The management and staff turnover and tenure metrics were generally in line with peers, while the management and staff experience levels were lower. Additionally, the staff turnover for real estate-owned (REO) represents the departure of one person.

Table 5

Collections

Default management activities occur at DMI's four site locations. Management says it provides active counseling to delinquent borrowers as early as possible in the delinquency lifecycle. Depending on the loan type, loan to value, debt-to-income ratio, and the history of delinquency, calls can begin as early as the third day after a loan is delinquent. Additionally, the primary portfolio's total delinquency rate decreased and stabilized since our last review (see table 6).

Table 6

Highlights and controls of the process include the following:

• DMI uses specialized interactive voice recognition (IVR) and website messaging to educate borrowers on their payment assistance options. DMI provides borrowers a number of methods to contact the company, including phone and voicemail, email, and IVR self-service to request an assistance packet.
• The collections department maintains inbound and outbound teams. The outbound team is further segregated into three groups: early delinquency, multi-delinquency, and serious delinquency (more than five payments).
• Outbound emails are used in the one- to 30-day collections strategy.
• A dialer software assists DMI with identifying best-time-to-call strategies, creates customized outbound dialing campaigns by investors, and isolates loans being transferred for calling campaigns.
• Loans identified as high-risk are contacted on the first of the month using manual dial campaigns with tenured agents.
• DMI uses workflow technology in the collections process, which is also used in the loss mitigation area.
• The servicing system contains a specialized tool to aid with Telephone Consumer Protection Act compliance that identifies, categorizes (work, cell, etc.), and codes borrower telephone numbers to indicate whether consent has been given to call the number.
• The collections call metrics are improved from our last review, with average speed of answer in line with peers and abandonment rates elevated compared to peers (see table 4).
• The QC department monitors a minimum of 10 calls per agent per month, which is similar to peers'. Additional calls are monitored monthly side-by-side with agent supervisors and for new employees for the first 90 days.
• Delinquency transition rates--from higher to lower and lower to higher--were generally in line with peers'.

Loss mitigation

DMI's SPOCs are organized and assigned by an investor. DMI uses the BITB loss mitigation platform, which allows clients access to direct modification programs and provides timely feedback regarding available options. Loan coordinators gather loss mitigation documents, review complete packages, and send incomplete information notices to borrowers. DMI assigns a SPOC to a borrower once it receives at least one loss mitigation document. Highlights and controls of the process include the following:

• The department has increased the number of loss mitigation staff since our last review, which is commensurate with portfolio volume increases and delinquency planning and projections. These increases included management, team leads, supervisors, and line-level staff.
• DMI also continues to use an onshore vendor to provide additional trained call agents that are primarily focused on outbound calls to borrowers nearing the end of their forbearance period to gauge next steps.
• There is a dedicated default technology team responsible for automation of manual processes, including robotics process automation and scripting.
• DMI has automated management oversight reporting that monitors high-level loss mitigation milestones.
• The loss mitigation call metrics have improved significantly since our last review and are better than peers' (see table 4).
• QC monitors six calls per agent per month, which is less than peers'. One call per month is also monitored side-by-side, and a new employee typically has eight calls monitored per month for the first 90 days.
• All retention and disposition loss mitigation alternatives are programmed into the BITB software to give DMI increased reporting and workflow analysis.
• There is a direct data bridge between BITB and Fannie Mae's home saver solution network and servicing management default underwriter to automate the retention and liquidation solutions decision process.
• DMI provides borrowers a loss mitigation portal, enabling electronic upload of documents and the ability to view the status of a loss mitigation application.
• The SPOC communicates all loss mitigation decisions to the borrower before sending an approval or denial letter, and all final modification documents are reviewed to validate correct terms.
• There are dual reviews and approvals of all loss mitigation denials and a sampling of approvals to validate completeness and accuracy, including income and expense inputs.
• As a subservicer, DMI offers borrowers loss mitigation alternatives developed by its clients, particularly for modifications (see table 7).

Table 7

Foreclosure and bankruptcy

DMI has sound oversight of its foreclosure and bankruptcy staff that enables the company to optimize timeline management during the legal process. DMI uses system workflows to manage its foreclosure and bankruptcy processes and department dashboards to track daily productivity and KPIs. Highlights and controls of the process include the following:

• A dedicated trainer, who focuses on foreclosure, bankruptcy, and supervisory skills.
• Foreclosure personnel and the corresponding attorneys handle multiple states to foster greater knowledge and expertise with the various legal processes throughout the country. DMI uses an approved attorney network unless otherwise directed by its clients.
• The foreclosure and bankruptcy departments have a formalized QA process that reviews monthly samples of each department's end-to-end processes.
• A foreclosure committee reviews all loans before deciding to refer the loan to foreclosure.
• Exception reports are used to track foreclosure holds, file-aging, and any issues or illogical items in reporting. Additionally, an attorney step report tracks all overdue and upcoming attorney functions in the servicing system.
• All loans undergo Servicemembers Civil Relief Act compliance checks at various points throughout the foreclosure process (depending on judicial versus non-judicial status).

DMI's bankruptcy department and workflow are organized by process and chapter. Highlights and controls of the process include the following:

• Management uses system reporting to track the progress of various bankruptcy milestones. There is also productivity tracking through client specific dashboards.
• The department uses the National Data Center, which provides efficient access to bankruptcy trustee information.
• The company uses vendor software to search bankruptcy court dockets for bankruptcy filings on a daily basis.
• DMI's attorneys prepare and submit all bankruptcy proof of claims (POCs) to the bankruptcy court; however, DMI's bankruptcy staff reviews and approves the POC before submission to the court.
• The company reported that no POCs were rejected, which is similar to peers'.

Real estate-owned (REO)

DMI has a dedicated staff that actively manages the REO properties for its clients on a limited basis. DMI lists properties with two asset management vendors, and it maintains close oversight of those vendors' marketing and sales activities. DMI's clients direct the properties' administration, affecting industry performance metrics such as sale price, eviction timeframes, and days to market. Some clients elect to manage and market their respective properties, while others authorize DMI to market properties under agreed-upon guidelines. Additional highlights and controls of the process include the following:

• The company uses a cash-for-keys strategy where possible, with a preference not to evict.
• Client authorization is required for DMI to make repairs to houses and properties.
• The gross sales-to–market value ratio is approximately 103%, and the net sales–to-market value ratio is 90%.

Financial Position

The financial position is SUFFICIENT.

Related Research

• Dovenmuehle Mortgage Inc. ABOVE AVERAGE Residential Mortgage Primary Servicer Ranking Affirmed; Ranking Outlook Stable, Oct. 20, 2021
• Select Servicer List, Oct. 13, 2021
• Servicer Evaluation Spotlight Report: Environmental, Social, And Governance Factors Have Consistently Powered Our Servicer Evaluation Rankings, Nov. 16, 2020
• Servicer Evaluation: Dovenmuehle Mortgage Inc., Oct. 16, 2020
• Analytical Approach: Global Servicer Evaluations Rankings, Jan. 7, 2019