Servicing

Forestar Real Estate Group Inc., Austin, Texas, has obtained $440 million in senior credit facilities, according to the company.The three-year facilities consist of a $175 million term loan and a $265 million revolving credit facility. The sole arranger and bookrunner of the facilities is KeyBanc Capital Markets. Forestar can be found on the Web at http://www.forestargroup.com.

Congress could pass a mortgage tax relief bill this week that encourages loan modifications and ensures that homeowners are not penalized when a lender reduces the principal amount of their mortgage.The bill, passed by the Senate Dec. 14, eliminates tax penalties for three years on mortgage debt forgiven in a loan mortification or foreclosure. Currently, any reduction in mortgage debt by a lender is treated as income for tax purposes. "Homeowners who are already in trouble on the mortgage certainly can't afford a big hit from the tax man, too," said Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee. The House passed a permanent exception back in October. But the House is expected to vote on and pass the Senate version so it can be sent to the president for his signature quickly. House Ways and Means Committee spokesman Matthew Beck said it is important to provide this relief to troubled homeowners as soon as possible. "I believe the House will accept the Senate version," he said. The Senate bill also includes a three-year extension of a tax deduction for mortgage insurance premiums. The House bill called for a seven-year extension.

Three classes of notes in Ballantyne Re PLC have been downgraded by Fitch Ratings because certain reserve funds backing the transaction have material exposure to subprime residential asset- and mortgage-backed securities.The downgrades were as follows: class A-1 floating-rate notes, from A-plus to BB; class B-1 subordinated notes, from BB-plus to B; and class B-2 subordinated floating-rate notes, from BB-plus to B. The ratings have been removed from Rating Watch Negative. The downgrades reflect "material mark-to-market declines" in the value of RMBS and ABS in the asset portfolios supporting Ballantyne Re's reserves, resulting in "significant unrealized losses" in the portfolios. Ballantyne Re is a special-purpose company incorporated in Ireland.

Four classes from two issues of NovaStar mortgage pass-through certificates have been downgraded by Fitch Ratings.The downgrades were as follows: NovaStar 2003-1, class M-3, from BBB to BB; and NovaStar 2004-4, class B-2, from A-minus to BBB-plus, class B-3, from BBB to BBB-minus, and class B-4, from BBB-minus to B. Fitch also affirmed the ratings on 11 other classes in the two transactions. The downgrades were attributed to deterioration in the relationship between credit enhancement and expected losses. The collateral consists of first- and second-lien subprime mortgage loans.

Six classes from two securitizations by Option One Mortgage Corp. have been downgraded by Fitch Ratings.The downgrades were as follows: series 2004-1, class M-5, from BBB-plus to BBB-minus (and removed from Rating Watch Negative), class M-6, from BB-plus to BB, and class M-7, from BB-minus to CC/DR3; and series 2004-2, class M-5, from BBB-plus to BBB-minus (and removed from Rating Watch Negative), class M-6, from BB-plus to BB, and class M-7, from B-plus to B. Fitch also affirmed the ratings on nine classes in the two deals. The downgrades were attributed to deterioration in the relationship between credit enhancement and loss expectations. The collateral for the transactions consists of first- and second-lien mortgage loans.

Fifty-four classes of mortgage-backed securities from several issuers have been downgraded by Fitch Ratings as a result of changes to its subprime loss forecasting assumptions.Fitch also placed 35 classes on Rating Watch Negative and affirmed the ratings on classes with outstanding balances of about $3 billion. Among the securities affected by the latest downgrades were: 14 classes from Credit-Based Asset Servicing & Securitization LLC series 2007-CB4; 11 classes from Natixis mortgage pass-through certificates, series 2007-HE2; 11 classes from Credit Suisse First Boston Home Equity Asset Trust series 2007-2; and 10 classes from Carrington mortgage pass-through certificates, series 2007-FRE1. The rating actions were attributed to changes to Fitch's subprime loss forecasting assumptions that "better capture the deteriorating performance of pools from 2006 and late 2005 with regard to continued poor loan performance and home price weakness."

One hundred and ten classes of residential mortgage-backed securities from 28 alternative-A securitizations issued by Countrywide have been downgraded by Fitch Ratings.Fitch also placed 12 CWALT classes on Rating Watch Negative, removed 18 classes from Rating Watch Negative, and affirmed the ratings on 69 classes. The negative rating actions were attributed to deterioration in the relationship between credit enhancement and expected losses. The collateral consists primarily of 30- and 15-year fixed-rate, first-lien alt-A mortgage loans.

Residential Capital LLC, the Minneapolis-based holding company for GMAC's residential lending affiliates, has again extended the early tender time for its previously announced cash tender offer for up to $750 million in aggregate principal amount of debt securities.ResCap said the new early tender time is midnight Eastern time on Dec. 19 (unless further extended by ResCap), the same as the expiration time of the tender offer. ResCap can be found on the Web at http://www.rescapholdings.com.

Citigroup, New York, has committed to providing its own support facility for its structured investment vehicles, a class of financial instruments that have generally been short of liquidity due to the U.S. subprime-mortgage-sparked global credit crunch.The company said it remains supportive of a larger multicompany effort to build an SIV support facility called the Master Liquidity Enhancement Conduit, but wanted to address its own needs immediately due to recent downgrades of its SIV senior debt ratings. SIVs often have some subprime mortgage exposure, but Citigroup said its own is "immaterial" and "indirect," totaling $51 million. The move to resolve Citigroup's uncertainty regarding senior debt repayment on its SIVs is the first major action by the company's new chief executive officer, Vikram Pandit.

Two classes of NationsLink Funding Corp.'s commercial mortgage pass-through certificates, series 1998-1, have been downgraded by Fitch Ratings.Class G was downgraded from B-plus to B, and class H was downgraded from CC/DR4 to C/DR5. In addition, Fitch affirmed the ratings on three other classes in the deal. The downgrades were attributed to an increase in expected losses as a result of recent valuations on the specially serviced assets. "As of the November 2007 distribution date, the pool's aggregate certificate balance has been reduced 85% to $153.6 million from $1.02 billion at issuance," Fitch reported.