NEW YORK, Dec. 19, 2014—Morningstar Credit Ratings, LLC today assigned its ‘MOR RV1’ residential vendor ranking for ClearCapital.com, Inc. (Clear Capital) as a residential vendor in the asset valuation market. The forecast for the ranking is Stable.
The assigned ranking reflects Morningstar’s assessment of Clear Capital’s operational infrastructure and client-driven performance results in its duties as a residential vendor producing asset valuations. The Stable forecast for the residential vendor ranking stems from a pervasive risk management culture that incorporates audit, quality assurance, compliance, and legal oversight across the enterprise. The company has developed strong vendor selection criteria and vendor rating standards that effectively measure vendor performance as reflected in its execution of service-level agreements with customers. Clear Capital’s proprietary technology provides the company with a highly flexible platform from which to effectively embed comprehensive quality assurance standards in all work orders received from vendors. Additionally, the technology provides a comprehensive rating system for evaluating the quality of both external vendor work and internal staff. Clear Capital offers extensive training and continuing education opportunities for new and tenured employees and has developed comprehensive policies and procedures to ensure the company consistently adheres to industry best practices. Clear Capital’s flexible business model and proprietary technology provide the company with a solid business platform from which to pursue opportunistic market growth and a diversified business strategy. The assigned ranking is based on the following factors:
• Robust technology environment: Morningstar believes Clear Capital has an effective technology architecture and systems infrastructure that supports its products and services and is fully scalable. This technology infrastructure provides the necessary performance management tools critical to monitoring and delivering performance to clients as outlined in service-level agreements. Additionally, the company’s technology architecture performs extensive data validation checks on all work orders and provides a rating system for vendors. Clear Capital has comprehensive project management protocols in place for developing and prioritizing technology projects. The company has an effective disaster recovery and business continuity plan in place, tested annually, that is based on geographical redundancy between the company’s locations in Truckee and Roseville, California.
• Risk management: Morningstar believes Clear Capital has implemented an effective risk control environment throughout the organization by instituting sound internal controls. These controls include, but are not limited to, effective training programs, comprehensive procedures, continuous performance monitoring and review, internal risk assessment methodologies, and control monitoring. A Statement on Standards for Attestation Engagements No.16, Reporting on Controls at a Service Organization (SOC 1), is conducted annually by an external firm, in addition to an annual financial controls audit. An enterprise-wide risk management program is in place, and the legal and compliance areas provide guidance on state and federal laws and regulations. As an appraisal management company, Clear Capital partners with various trade industry groups and legislative bodies to remain current on existing and proposed legislation that may affect its business nationwide.
• Effective training programs: Morningstar’s positive opinion of Clear Capital is based on its effective training regimen for new and tenured employees that benefits from a blend of internal and external training solutions. The syllabus offers training in relevant regulations such as the Gramm-Leach-Bliley Act and the Uniform Standards of Professional Appraisal Practice, as well as product-specific training and technology applications. All courses require skills testing. A career path program is in place, consisting of an annual employee review that incorporates an ongoing development plan. Morningstar believes Clear Capital has the requisite training infrastructure, staff, and resources commensurate with the size of its organization.
• Comprehensive policies and procedures: Morningstar believes Clear Capital has comprehensive policies and procedures that incorporate workflow-specific processes and descriptive narrative. The policy and procedure documents are written by the operational staff using a consistent format and are centrally administered by the human resources department. The risk management committee periodically undertakes a formal review of policies and procedures. Policy and procedure documents are available enterprise-wide on the company’s intranet to ensure consistent practices across the business platform.
• Solid performance record: Clear Capital is led by a highly tenured management team with significant and relevant industry experience. The company is a recognized leader in the industry and has produced more than 8 million valuations, including appraisals, broker price opinions, and collateral desktop analysis. Clear Capital has developed an infrastructure for continuous performance monitoring and reporting to best execute service-level agreements with customers. The company effectively utilizes its proprietary technology to perform extensive data validation and vendor performance scoring and provide feedback. This process is further enhanced by a team of quality assurance representatives and certified appraisers that perform in-depth quality analysis on all work orders.
The forecast for the ranking is Stable. Morningstar believes Clear Capital is fully capable of serving as an effective residential vendor in the asset valuation market for a wide variety of financial institution clients. The Stable forecast is based on Morningstar’s view that Clear Capital will maintain organizational stability, providing high-quality service and performance for clients. Clear Capital’s flexible technology environment, risk management culture, industry-leading performance, and highly experienced management team should position the company well for continued growth and market expansion.
To access Morningstar’s operational risk assessment methodology and all published reports, please visit https://ratingagency.morningstar.com.
About Morningstar Credit Ratings, LLC and Morningstar, Inc.
Morningstar Credit Ratings, LLC is a Nationally Recognized Statistical Rating Organization (NRSRO) that specializes in structured credit research and ratings and offers a wide array of services including new-issue ratings and analysis, operational risk assessments, surveillance services, data, and technology solutions.
Morningstar Credit Ratings’ rankings, forecasts, and assessments contained in this press release are evaluations and opinions of noncredit related risks and, therefore, are not credit ratings within the meaning of Section 3 of the Securities Exchange Act of 1934 (“Exchange Act”) or credit ratings subject to the Exchange Act requirements and regulations promulgated thereunder with respect to credit ratings issued by NRSROs.
Morningstar Credit Ratings, LLC is a subsidiary of Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research in North America, Europe, Australia, and Asia.
Morningstar, Inc. offers an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. Morningstar provides data on approximately 479,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 13 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $169 billion in assets under advisement and management as of Sept. 30, 2014. The company has operations in 27 countries.
Morningstar, Inc. is not an NRSRO, and its credit ratings on corporate issuers are not NRSRO credit ratings.
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