Fitch Ratings has affirmed the commercial mortgage primary servicer rating of Bellwether Enterprise Real Estate Capital, LLC (Bellwether, or the company) as follows.

Key Rating Drivers

The affirmation of the primary servicer rating reflects Bellwether's continued demonstrated proficiency of primary servicing commercial mortgage loans and demonstrated commitment to a supporting continued portfolio growth through hiring and continuous technology enhancements. The rating also considers the highly experienced and tenured management team, consistent low employee turnover, application of internal controls, and financial condition.

Bellwether is a commercial real estate (CRE) finance company that acts as a correspondent lender and servicer for life insurance companies, pension funds and CMBS lenders. It is also a direct lender for GSEs (Freddie Mac and Fannie Mae), as well as an approved lender for the Federal Housing Administration and Rural Housing Service, retaining servicing for about 77% of its originations in 2020.

The company has grown significantly through various acquisitions and lift-outs in recent years to increase originations nationally. The most recent acquisition occurred in October 2020 through which Bellwether expanded into the Philadelphia market with the acquisition of Maher Commercial Mortgage, adding three servicing employees, as well as a servicing portfolio of 185 loans, totaling approximately $3.0 billion.

Bellwether has increased its primary servicer staff count, bringing it to 86 servicing employees, adding bench strength in asset management, insurance and loan operations. Overall employee turnover, which is historically very stable relative to other Fitch rated servicers, remained low at 6% in 2020.

Included within Bellwether's growing staff are five new employees to support the company's internalization of insurance compliance monitoring from an outside vendor, with life company related loans being moved initially, and all loans expected to be internalized by the end of 2021. Bellwether notes that the internalized insurance function should provide a better borrower experience, improving both borrower relationships as well as bringing additional opportunities for internal training.

The company continues to demonstrate its commitment to enhancing its information technology infrastructure through multiple initiatives including replatforming its primary servicing system of record to a cloud-based architecture, development of a new Salesforce based workflow management system, and expanding the use of optical character recognition and artificial intelligence tools for analyzing commercial property rent rolls and insurance compliance forms.

Bellwether's internal control environment consists of high-level policies and procedures, task tracking and reporting from the servicing application, and management oversight of servicing functions. A dedicated quality control and compliance team, independent of servicing operations, perform quarterly reviews to confirm compliance with established policies and procedures. While Bellwether does not maintain internal audit resources, it leverages internal audits performed by its parent company, Enterprise Community Investment.

However, Fitch noted internal audits do not have a defined schedule and the scope of servicing functions reviewed has been limited in recent years. The infrequency and limited scope of internal audits is partially mitigated by the robust scope of quarterly compliance reviews.

Bellwether's servicing portfolio has increased 36% by balance to $35.1 billion, up from $25.8 billion at year-end 2019. The growth is primarily driven by non-securitized loans, which have increased to a total of $28.2 billion, up from $20.2 at year-end 2019, a 40% increase. Concurrently, the balance of securitized loans within the portfolio grew to $6.8 billion from $5.6 billion, a 22% increase over the last 18 months.

Life insurance loans comprise the majority of the firm's servicing portfolio (54% by loan count), followed by Fannie Mae (19%) and Freddie Mac (12%). With regard to collateral, multifamily comprised the majority of loans serviced at 55% by loan count, followed by retail loans at 18% and industrial loans at 15%.

RATING ACTIONSENTITY/DEBT	RATING		PRIOR

Bellwether Enterprise Real Estate Capital, LLC

? CMBS Primary Servicer

CPS2+ 	Affirmed		CPS2+

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Additional information is available on www.fitchratings.com

PARTICIPATION STATUS

The rated entity (and/or its agents) or, in the case of structured finance, one or more of the transaction parties participated in the rating process except that the following issuer(s), if any, did not participate in the rating process, or provide additional information, beyond the issuer's available public disclosure.

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