Servicing

Class II-B-5 of Luminent Mortgage Loan Trust series 2006-3 has been placed on Rating Watch Negative by Fitch Ratings.In addition, the ratings on five other classes in the transaction were affirmed. The negative rating action was attributed to "signs of increasing credit risk." The collateral consists of adjustable-rate mortgage loans.

Two classes of Asset Backed Securities Corp. subprime mortgage pass-through certificates have been placed on Rating Watch Negative by Fitch Ratings.The affected securities were class M-11 of series 2006-HE2 and class M-10 of series 2006-HE4. In addition, Fitch affirmed the ratings on 55 classes in five ABSC deals. Fitch attributed the negative rating actions to a deterioration in the relationship between loss expectations and credit enhancement. The transactions consist chiefly of fixed- and adjustable-rate subprime residential mortgage loans.

Class B-1F of Amresco Residential Securities Corp. mortgage loan pass-through certificates, series 1997-3 group 1, has been downgraded from CCC/DR2 to CC/DR4 by Fitch Ratings.In addition, the Distressed Recovery rating of class B-2F was lowered from DR3 to DR6, and the ratings on 38 classes in seven Amresco transactions were affirmed. The downgrade was due to a deterioration in the relationship of credit enhancement to loss expectations, Fitch said. The pools consist of fixed- and adjustable-rate conventional mortgages.

MERS, the electronic registry for tracking ownership of mortgage loans and servicing rights, has registered its 50 millionth loan.The milestone comes nine years after MERS pioneered its "MERS as original mortgagee" process, enhancing the registry by eliminating the need for an initial assignment to MERS. R.K. Arnold, president and chief executive officer of MERS, said the MOM process has allowed lenders and servicers to streamline their operations and reduce costs. "Having 50 million loans registered since then is gratifying, especially when we realize that reducing lender costs to originate loans benefits borrowers, especially first-time homeowners," he said. MERS eliminates the need to prepare and record paper assignments when mortgage companies sell loans or servicing rights. MERS estimates that lenders save at least $25 for each loan that is registered on the system. Currently, some 3,000 participating lenders register an average of 25,000 loans on MERS each day, the company said. MERS can be found on the Web at http://www.mersinc.org.

Fitch Ratings has affirmed the long-term issuer default and short-term issuer ratings (BBB-plus and F2, respectively) for Astoria Financial Corp. and Astoria Savings and Loan, but the rating outlook has been revised from stable to negative.Fitch said the negative outlook reflects the "profitability pressure" on the Lake Success, N.Y.-based mortgage lender stemming from an adverse interest rate environment that has caused "significant net interest margin compression" over the past three years. "Capital levels have declined as a result of fairly aggressive stock repurchases, while equity generation remains modest," Fitch said. "Although capital measures are sound from a regulatory perspective, Fitch views negatively the decline in capitalization, particularly in light of [Astoria Financial's] increased mix of reduced- and no-documentation loans." Astoria can be found on the Web at http://www.astoriafederal.com.

First National Bank of Arizona has turned to Phoenix-based Accenture for post-closing business process outsourcing.The Accenture service combines personnel, process, and technology to fully automate this part of mortgage fulfillment. Financial terms of the two-year contract were not disclosed. Accenture said it will provide the bank with file-room services, including imaging to convert paper documents into electronic form, indexing to capture relevant information in digital form, workflow services to speed processing, and performance metrics spanning the process. It will also offer data and document review to confirm that loans have met underwriting, servicing, and secondary-market salability requirements. Accenture will deliver the service both onsite and through its Global Delivery Network, which includes more than 40 centers in 30 cities around the world. The company can be found on the Web at http://www.accenture.com.

An analysis by Fitch Ratings concludes that the flattening of home price appreciation last year contributed to the rising number of defaults on subprime home loans.Using local metropolitan area data, Fitch found that subprime loans originated in the first quarter of 2006 experienced home price appreciation of just 0.5% last year, but that the default rate jumped to 8.3% of outstanding mortgage balances. By contrast, for the full year of 2005, subprime originations experienced average home price appreciation of 17% after 12 months and the default rate was only 1.7%. Fitch says the data show that home price deflation "is driving higher defaults of recently originated subprime mortgages." Fitch can be found on the Web at http://www.fitchratings.com.

Sixteen classes of Residential Accredit Loan Inc. mortgage pass-through certificates have been downgraded by Fitch Ratings, and 15 classes have been placed on Rating Watch Negative.In addition, Fitch upgraded two classes and affirmed the ratings on 76 classes from 16 RALI securitizations. The negative rating actions on 2005 and 2006 vintage deals were due to current trends in the relationship between serious delinquencies and credit enhancement, Fitch said. Downgrades in 2001 and 2003 vintage deals were attributed to high delinquencies and losses. The collateral for the deals consists primarily of 15- and 30-year fixed-rate mortgage loans extended to alternative-A borrowers, the rating agency said.

Analysts included in Zacks.com's All Star Analyst Survey have once again recommended the stock of Starwood Hotels & Resorts Worldwide Inc.The All Star Analyst portfolio represents all stocks with a Strong Buy rating from at least four analysts with a 5-Star All Star ranking, Zacks said. Starwood "has long been one of the All Stars' favorite names in the hotel industry," Zacks reported. The company said Starwood's earnings topped the analysts' consensus by about 26% in the first quarter and that its revenue per available room for same-store hotels rose 10.2% worldwide. Zacks can be found online at http://www.zacks.com.

Foreclosure filings in Massachusetts totaled 2,002 in April, the seventh consecutive month in which they have exceeded 2,000, according to ForeclosuresMass.com, a provider of foreclosure data based in Framingham, Mass.The company said lenders initiated foreclosure proceedings against 23,116 homeowners over the past 12 months, an 81% increase from the 12-month level recorded a year earlier. "Virtually every community in Massachusetts is being impacted by the foreclosure crisis," said Jeremy Shapiro, president and co-founder of ForeclosuresMass.com. "Wealthy and poor, urban and rural, and all communities in between are being ravaged. Our forecasts indicate that foreclosures will continue to have a negative impact on the Massachusetts real estate market throughout 2007." The company can be found online at http://www.foreclosuresmass.com.