Citi’s Mortgage Subservicer Cenlar FSB Maintains Negative Rating Outlook by Fitch

Perhaps that is why the subsidiary of Cenlar Capital Corporation continues to associate with another negative, BDF Hopkins of Texas.

Cenlar FSB

JAN 19, 2022 | REPUBLISHED BY LIT: APR 15, 2022

Key Rating Drivers, Executive and Organizational Changes

Cenlar FSB (Cenlar) completed several changes to its executive management team, which included the addition of several external new hires.

In addition, the servicer reorganized its customer contact center operations and expanded its risk and compliance oversight structure.

On Oct. 26, 2021, The U.S. Office of the Comptroller of the Currency (OCC) issued a consent order against Cenlar based on the bank’s failure to establish effective controls and risk management practices related to its mortgage servicing and subservicing activities.

Expansion of Enterprise Risk Management Controls

Cenlar maintains a robust risk and control self-assessment (RCSA) framework and continues to develop its corporate governance structure.

The servicer made several executive personnel changes to its risk management oversight structure and is now expanding its operation business management and control processes.

Continued Investments in Servicing Operation

Cenlar has continued to make enhancements to its systems and processes. During this review cycle, Cenlar upgraded its telephony system for the customer service contact center.

The servicer also enhanced its workforce management tools, implemented a chat bot to provide virtual assistance and added speech analytics within its customer service areas.Experienced Management

Team and Staff

Cenlar maintains an experienced executive management team, which averaged over 23 years of industry experience and 10 years of company tenure.

OCT 26, 2021 | REPUBLISHED BY LIT: APR 15, 2022

Cease and Desist Order

WASHINGTON—The Office of the Comptroller of the Currency (OCC) today issued a Consent Order against Cenlar FSB of Ewing, N.J.

The OCC took this action based on the bank’s failure to establish effective controls and risk management practices related to its mortgage servicing and subservicing activities.

The order requires the bank to take comprehensive corrective actions to address identified deficiencies and implement internal controls and risk management practices that are appropriate to the bank’s risk profile and the size of its mortgage subservicing operations. The order also limits excessive growth and prioritizes remediation by requiring the bank to receive no supervisory objection from the OCC before adding new subservicing clients and prior to declaring or paying dividends to shareholders while the order is effective.

Cenlar FSB is the largest mortgage sub-servicer in the country, performing servicing duties on behalf of financial institution clients throughout the United States, and the second largest mortgage servicer in the United States.

Rating Action Commentary

Fitch Affirms Cenlar FSB’s U.S. RMBS Servicer Rating; Outlook Negative

Wed 28 Oct, 2020

Fitch Ratings – New York – 28 Oct 2020: Fitch Ratings has affirmed Cenlar, FSB’s U.S. residential mortgage servicer rating as follows:

–U.S. residential primary servicer rating for prime product at ‘RPS2’; Outlook Negative.

Key Rating Drivers

The ‘RPS2’ rating reflects Cenlar’s continued investments in its servicing operation, experienced management team and staff, highly developed growth strategy, effective enterprise risk management controls, and the financial strength and support of its parent, Cenlar Capital Corporation (CCC).

On March 27, 2020, Fitch revised its U.S. RMBS servicer Outlooks to Negative where a Negative Outlook did not already exist due to the evolving economic stresses and operating conditions caused by the coronavirus pandemic.

These stresses have increased systemic risk across the mortgage-servicing spectrum, and Fitch is particularly focused on entities with RMBS servicing responsibility.

Early indications of Cenlar’s performance in this evolving environment have not raised elevated concerns.

However, Fitch expects that additional remittance cycles and further insight into the market’s handling of loans in forbearance and deferrals will be necessary prior to resolving the Negative servicer Outlooks of Cenlar and most other active RMBS servicers.

Some key pandemic-related developments at Cenlar include:

–Successfully transitioned 95% of its staff to a work from home environment.

Currently operating as a fully virtual office with a limited number of FTEs for in-person processes (mailroom, document execution).

–The servicer indicated that it had over 191, 000 requests for forbearance or deferral assistance from March through June 30, 2020.


–The servicer follows the Coronavirus Aid, Relief and Economic Security Act (CARES Act). Typically, terms are being offered at 90-180 days agreements or as stipulated by its investors. The servicer also follows state mandates regarding assistance options. Mortgagors are also encouraged to make partial payments.

–The servicer enhanced its telephony and web portal services to meet the increased demand for assistance. In addition, two call center vendors were boarded to offer forbearance triage, default call center and customer Interaction support.

–As of January 2020, through June 30, 2020, the servicer had 603 complaints from the Consumer Financial Protection Bureau (CFPB).

Cenlar participates in the servicing of new prime RMBS issuances, but is focused on expanding its private-label and subservicing operations.

The servicer completed an agreement to subservice CitiMortgage, Inc’s (Citi) owned portfolio, agency-held loans, and monthly flow production.

Cenlar’s portfolio has grown 18% yoy with Citi representing approximately 20% of Cenlar’s total portfolio by loan count as of June 30, 2020.

Since Fitch‘s last review there have been several senior management changes.

Anthony Renzi, who started in March 2018, as Cenlar’s president and COO, was replaced by Robert Lux, COO, effective Sept., 2019.

A new SVP of the default operation was named in June 2019, and the former VP of strategy administration was named as the CIO.

Greg Tornquist remains as Cenlar’s CEO and chairman of the board.

Cenlar as of June 2020, employs approximately 3,100 full time equivalents (FTEs), which represents yoy increase of 18%.

The servicer also effectively trained and incorporated a selected group of former Citi’s FTEs into its operation and also added one of Citi’s former servicing locations to meet its planned growth objectives.

Anthony Renzi is Chief Executive Officer at Common Securitization Solutions. (Freddie Mac)



He previously served as Executive Vice President of Single-Family and Operations and Technology at Freddie Mac and COO, Managing Director of Citibank Mortgage, Retail and Commercial Banking North America, where he managed 15,000 employees in North America, India and the Philippines.

More recently, Renzi was Chief Executive Officer and President of Ditech Holding Corporation and President and Chief Operating Officer for Cenlar, FSB.

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