OREANDA-NEWS. Fitch Ratings affirms Freddie Mac's Multifamily Division commercial mortgage servicer ratings as follows:

--Commercial mortgage master servicer at 'CMS2';

--Commercial mortgage special servicer at 'CSS2'.

The master servicer rating reflects Fitch's assessment of Freddie Mac's ability to perform core servicing competencies, including primary servicer oversight, surveillance, loan accounting, and investor reporting. The rating also considers Freddie Mac's lack of experience with other commercial property types and inability to directly service loans, as well as their short tenure as a named master servicer, as well as a lack of an advancing credit committee.

Since becoming a rated master servicer, Freddie Mac experienced significant growth in its master servicing portfolio. In 2015 through self-appointment, Freddie Mac was master servicer for 14 transactions and an additional seven transactions in first quarter 2016. As of March 31, 2016, the company's CMBS master servicing portfolio totaled $6.3 billion comprised of 22 transactions, up from a single transaction totaling $391 million as of year-end 2014. Freddie Mac retains master servicing responsibility for certain K-series single borrower and junior participation loan transactions as well as its small balance securitization program that began in 2015. Small balance transactions represent approximately two-thirds of master servicing assignments by count.

The special servicer rating reflects the group's significant workout experience with multifamily properties throughout the United States, proactive surveillance, efficient use of technology for asset management, and effective internal controls. While only two members of the special servicing team, who average over 30 years of experience, are actively working out defaulted assets, the group has significant special servicing bench strength and management depth among its 22 employees who are capable of working out loans should defaults rise. Special servicing is led by four senior managers averaging 30 years of industry experience and 11 years of tenure.

The special servicing group is responsible for defaults within Freddie Mac's balance sheet portfolio which consists of 6,243 loans totaling $66.6 billion as of March 31, 2016, as well as three CMBS transactions. The special servicing group resolved 19 loans for the 12 months ending March 2016 totaling $266 million, none of which incurred a loss. Resolutions included 15 full payoffs, and four corrected and returned to performing. The multifamily assets were located in 13 states, and the outstanding balance of the loans ranged from approximately $1.4 million to $37.3 million.

Both ratings consider the company's financial strength backstopped by the U. S. Treasury, knowledge of the multifamily lending environment combined with the support of its seller/servicer network. Due to the concentration of servicing for multifamily assets, servicer ratings are limited to the '2' category.