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Goldman Sachs & Co. has filed a $5 million unsecured claim in bankruptcy court against the now-defunct First NLC Financial Services, Deerfield Beach, Fla., a subprime lender owned by Friedman Billings Ramsey. According to First NLC's filing in West Palm Beach, Fla., Goldman is the largest unsecured creditor of the company. Others that are owed money include HSBC Mortgage Services ($3 million), Deutsche Bank ($2 million), and U.S. Bank Corp. ($1 million). Most of the claims are tied to "representations and warranties" on loan buybacks. The filing lists 20 unsecured creditors that are owed roughly $16 million. Some include former employees trying to collect on severance benefits. According to the Mortgage Industry Directory, a SourceMedia publication, First NLC was once a top-30-ranked subprime funder.

American General Finance has agreed to pay $1.49 billion to Popular Inc. -- a 3% premium -- for most of its subprime loan portfolio. A spokesman for the San Juan, Puerto Rico-based Popular told MortgageWire that most of the loans are subprime in nature and carry fixed rates. "It's a good deal for us and it's a good deal for them," he said. "We get cash and are exiting the market." He added that the loans are "well documented." The mortgages were funded by the bank's Equity One consumer finance division, a company Popular has owned since 1991. The New York-based AGF will also take control of 24 Equity One branches, all of which are located in the continental United States. AGF is a subsidiary of American International Group, an insurance conglomerate.

The California economy is being strangled by limited access to mortgage credit, according to California Gov. Arnold Schwarzenegger, who wants Congress to raise the Fannie Mae and Freddie Mac lending limit from $417,000 to $625,000 as part of an economic stimulus package. "Raising these limits would do more than anything else to pump badly needed credit back into the housing market and revive our economy," Gov. Schwarzenegger says in a letter to House and Senate leaders. More than 50% of California's housing stock is priced above the current GSE loan limit of $417,000. "When combined with the withdrawal of the jumbo loan market, it's no surprise that current home sales activity in California is half the pace seen in 2006," the governor said. The former movie star also pointed out that raising the loan limit for the government-sponsored enterprises automatically raises the limit on loans insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs. "Nothing will more beneficially improve the United States economy than immediately raising these limits," he said. California Realtors, builders, mortgage bankers, and brokers are also urging Congress to raise the GSE loan limit to $625,000 as part of a stimulus package.

Four classes of pass-through certificates from a Wells Fargo Alternative Loan Trust securitization have been downgraded by Fitch Ratings. The downgrades from WFALT 2007-PA1 were as follows: class B-2, from A to A-minus; class B-3, from BBB to BB-plus; class B-4, from BB to B; and class B-5, from B to C/DR5. Fitch also affirmed the ratings on two other classes in the deal. The downgrades were attributed to deterioration in the relationship between credit enhancement and loss expectations. The collateral consists of fixed-rate, conventional first-mortgage loans.

Five classes of IndyMac Residential Asset Securities Trust mortgage pass-through certificates have been downgraded by Fitch Ratings. The downgrades from RAST 2007-A3 were as follows: class B-1, from AA to AA-minus; class B-2, from A to BBB-plus; class B-3, from BBB to BB-minus; class B-4, from BB to C/DR4; and class B-5, from B to C/DR5. The downgrades were attributed to deterioration in the relationship between credit enhancement and loss expectations.

Nine classes of pass-through certificates from two RBSGC Mortgage Loan Trust securitizations have been downgraded by Fitch Ratings. Fitch also affirmed the ratings on 11 classes from three RBSGC deals. The downgrades were attributed to deterioration in the relationship between credit enhancement and loss expectations. The collateral consists of fixed-rate, first-lien mortgage loans.

Nine classes of GS Mortgage Securities GSR mortgage pass-through certificates have been downgraded by Fitch Ratings. Fitch also removed three classes from Rating Watch Negative and affirmed the ratings on 17 classes from several GS securitizations. The downgrades were attributed to deterioration in the relationship between credit enhancement and loss expectations.

Fitch Ratings has removed 87 residential mortgage-backed securities insured by MBIA Inc. from Rating Watch Negative. The action followed Fitch's recent affirmation of the AAA Insurer Financial Strength ratings of MBIA and its subsidiaries. The IFS rating of the financial guaranty insurance company, and the related RMBS ratings, had been placed on Rating Watch Negative following assessments of the company's exposure to RMBS and collateralized debt obligations backed by subprime mortgage collateral.

Twenty-five classes of pass-through certificates from 13 J.P. Morgan Mortgage Trust securitizations have been downgraded by Fitch Ratings. Fitch also placed two classes on Rating Watch Negative and affirmed the ratings on 48 J.P. Morgan classes. The negative rating actions were attributed to deterioration in the relationship between credit enhancement and loss expectations. The collateral for the transactions consist primarily of conventional first-lien prime mortgages.

National City Corp., Cleveland, has reported a fourth-quarter loss of $333 million ($0.53 per share), compared with net income of $842 million ($1.36 per share) a year earlier. NatCity reported a loss of $149 million for the quarter in its loans-held-for-sale portfolio due to problems in the secondary market, which resulted in additional fair-value writedowns on those loans. It has now stopped origination of all products other than agency-eligible products and shifted certain non-agency-eligible mortgage loans and home equity loans from its held-for-sale portfolio to its balance sheet portfolio. NatCity also took a charge of $181 million ($0.26 per share) for goodwill impairment related to the mortgage business. For the year, NatCity earned $314 million ($0.51 per share), down from income of $2.3 billion ($3.77 per share) in 2006.