Servicing

Fitch Ratings has downgraded $37.2 billion worth of collateralized debt obligations in 84 structured finance CDOs.The rating agency said the actions followed a review of 55 U.S. and European structured finance CDOs executed on a synthetic basis, and 29 U.S. and Asian structured finance CDOs executed on a cash/hybrid basis. The downgrades were based on continued credit deterioration in the underlying collateral and changes to the default forecasting assumptions of the rating agency's default model, Fitch said. "The updated assumptions reflect increased probabilities of default with respect to recent vintage subprime residential mortgage-backed securities and [structured finance] CDOs," the rating agency said.

The residential servicer ratings of National City Mortgage have been downgraded from RPS1-minus to RPS2-plus by Fitch Ratings.The affected ratings were NatCity Mortgage's residential primary servicer ratings for prime product and for alternative-A product. Fitch said the actions were taken due to the weakening of the financial strength of NatCity Mortgage's parent, Cleveland-based National City Corp., whose rating was recently downgraded from AA-minus to A-plus. The rating outlook for the parent company is negative. Fitch said the downgrade of NatCity was based on "its weakened core financial performance." Fitch rates residential servicers on a scale of 1 to 5, with 1 being the highest rating. Fitch can be found on the Web at http://www.fitchratings.com.

The Prestwick Mortgage Group, Alexandria, Va., is brokering the sale of mortgage servicing rights on two servicing portfolios.The first is a $44 million national portfolio of Fannie Mae loans with an 8.56% weighted average note rate and a $45,095 average balance. The portfolio has a 13.80% delinquency rate. The bid deadline is Nov. 16. A second portfolio of $14 million in Fannie Mae of loans from Ohio is also being offered. That portfolio has a 6.403% weighted average note rate, a $78,431 average loan balance, and a 1.68% delinquency rate. Bids are due Nov. 15.

Investor aversion to subprime credits has pushed the issuance of subprime mortgage-backed securities down to $3.8 billion in October -- the lowest level since July 2001, according to a report by Friedman Billings Ramsey.The FBR Investment Management Inc. report shows that the issuance of private-label subprime MBS has fallen by 91% since October 2006, when Wall Street sold $41.9 billion of such securities. Private-label alternative-A MBS issuance fell from $7.9 billion in September to $6.3 billion in October. In October 2006, Wall Street sold $25.8 billion in alt-A MBS. The Structured Finance Insights report also shows that private-label MBS issuance (including prime, alt-A, and subprime) totaled only $19.5 billion in October, down 50% from that of the previous month and 81% from that of a year earlier. FBR can be found on the Web at http://www.fbr.com.

Over 44 million homeowners could see the value of their properties decline by an average of $5,000 due to a nearby subprime foreclosure, according to a new study by the Center of Responsible Lending."The total decline in house values and tax base from nearby foreclosures will be $223 billion," the CRL issue paper says. The Durham, N.C.-based advocacy group warns that minority communities with large concentrations of subprime borrowers could experience more severe declines in property values. The CRL report is based on an academic study that found one foreclosure in a neighborhood could reduce surrounding property values by 0.9%. It is also based on CRL projections that 19.4% of subprime loans originated in 2005 and 2006 will end up in foreclosure and that 1.1 million borrowers will lose their homes. "By any measure, the epidemic of home losses is severe, and will not only harm families who lose their homes, but also nearby homeowners who suffer drops in their property values," the CRL paper concludes. The group supports legislation that would allow bankruptcy judges to restructure mortgages. It can be found online at http://www.responsiblelending.org.

Countrywide Financial Corp. funded just $3.2 billion in mortgages through loan brokers during October, a startling 57% decline from the level of a year earlier.During the month its retail production fell by 29%, while loans bought through the correspondent channel declined 52%. The Calabasas, Calif.-based company funded $22 billion in October, a 48% drop from the level recorded a year earlier. Like most residential lenders, Countrywide has been hurt by the meltdown in the subprime and nonconforming niches and a credit crunch in the secondary market. In a statement, Countrywide president David Sambol noted that 90% of the company's production is now funded through its thrift affiliate. Countrywide can be found online at http://www.countrywide.com.

Class B of the CSFB 2004-CF1 mortgage transaction has been placed on review for possible downgrade by Moody's Investors Service.The amount of the deal's available credit enhancement has been reduced from losses and step-down, Moody's said. "The timing of losses, coupled with passing of performance triggers, has caused the protection available to the subordinate bonds to be diminished," the rating agency said. The collateral backing the deal consists primarily of first-lien, fixed- and adjustable-rate scratch-and-dent mortgage loans.

Class B-5 of Financial Asset Securitization Inc. 1997-NAMC1 has been downgraded from BBB to CCC/DR2 by Fitch Ratings.In addition, the rating agency placed class B-4 of the deal and class B-3 of series 1997-NAMC2 on Rating Watch Negative and affirmed the ratings on eight classes from the two deals. Fitch attributed the negative rating actions to a deterioration in the relationship between credit enhancement and expected losses. Fitch can be found on the Web at http://www.fitchratings.com.

Four tranches of securities issued by Amortizing Residential Collateral Trust Mortgage Pass-Through Certificates, series 2004-1, have been downgraded by Moody's Investors Service.The downgrades were as follows: class M5, from A3 to Baa2; class M6, from Baa1 to Baa3; class M7, from Baa2 to Ba1; and class M8, from Baa3 to B1. The downgrades were based on an analysis of credit enhancement levels provided by excess spread, overcollateralization, and subordinate classes relative to projected and stressed losses, Moody's said. The collateral consists primarily of first-lien, fixed- and adjustable-rate subprime mortgage loans.

Moody's Investors Service has downgraded the ratings of 59 tranches from 12 RALI deals issued in 2006 and late 2005.Moody's has also placed the ratings of 15 tranches under review for possible downgrade, and two downgraded tranches remain on review for possible downgrade. The negative rating actions were based on higher-than-anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels, Moody's said. The collateral consists primarily of first-lien, fixed- and adjustable-rate alternative-A mortgage loans.