Servicing

EverBank, Jacksonville, Fla., has announced an agreement to acquire the mortgage servicing portfolio of NetBank, as well as its direct banking and small business financing divisions.The terms of the agreement were not disclosed. The acquisition will increase EverBank's assets to approximately $7 billion and its customer base to over 550,000, the privately held company said. EverBank recently expanded its reverse-mortgage operations by purchasing BNY Mortgage Co. "The NetBank acquisition is another important milestone in our strategic transformation into a high-performing, fully integrated financial services company," said Blake Wilson, EverBank president and chief financial officer.

Williams & Williams Assets, a newly formed division of Tulsa, Okla.-based real estate auction firm Williams & Williams, has announced that it will directly acquire mortgage investors' collateral risk.The new division said it is "actively pursuing" bulk portfolios of foreclosed real estate assets from Wall Street investors and other financial institutions, as well as contractual flow purchase agreements relating to such assets. "There is not a single financial institution I am aware of that likes having real-estate-owned properties on their books," said Dean Williams, chief executive officer and president of Williams & Williams. ".... We're able to structure direct and/or ongoing purchases of these assets in the hundreds of thousands of properties per month, increasing the net realized returns compared to traditional REO disposition and effectively eliminating, or at least stemming, the related collateral risk incurred by mortgage investors." The company can be found online at http://www.williamsauction.com.

Mortgage lenders support the efforts of federal regulators to strengthen underwriting standards on subprime loans and will help troubled borrowers avoid foreclosure, according to a joint statement issued by five industry groups.The trade groups have been very wary of proposed subprime guidance the banking regulators are expected to finalize soon, and they are very concerned about proposed legislation aimed at providing relief for subprime borrowers facing foreclosure. "We believe the efforts of our members, together with the actions of the regulators, will be effective in dealing with current problems in subprime mortgage lending," the joint statement on responsible subprime lending says. "We urge the federal regulators to ensure that the proposed statement on subprime lending strikes a careful balance that provides enhanced consumer protections without unintentionally limiting the availability of home ownership to creditworthy borrowers." The Financial Services Roundtable, the American Bankers Association, the Mortgage Bankers Association, the Consumer Bankers Association, and America's Community Bankers signed the statement.

Class M-I-3 of Residential Asset Securities Corp.'s home equity mortgage asset-backed pass-through certificates, series 2001-KS2, has been downgraded from B3 to Caa2 by Moody's Investors Service.The downgrade was based on "the analysis of the credit enhancement provided by subordination, overcollateralization, and excess spread relative to the expected loss," Moody's said. The transaction is backed by first- and second-lien fixed-rate, and first-lien adjustable-rate, subprime mortgage loans. Moody's can be found on the Web at http://www.moodys.com.

Class M-3 of Ameriquest Mortgage Securities Inc. Quest 2003-X4 has been downgraded from BB-minus to CC/DR3 by Fitch Ratings.In addition, Fitch affirmed the ratings on 16 classes from three Quest transactions. The downgrade was attributed to deterioration in the relationship between credit enhancement and expected losses. Fitch can be found online at http://www.fitchratings.com.

Doral Financial Corp., a San Juan, Puerto Rico-based mortgage lender, has announced a recapitalization plan under which it will sell $610 million of its common stock to a newly formed bank holding company backed by Bear Stearns Merchant Banking and eight other companies.After the recapitalization, the new entity, Doral Holdings, will own approximately 90% of Doral's common stock outstanding, and Doral's existing common shareholders will own the remainder. The investment by Doral Holdings, together with certain other transactions, are expected to enable Doral to repay at maturity its $625 million floating-rate senior notes due July 20, to fund a previously announced settlement of a securities class action and shareholder derivative litigation, and to pay transaction expenses, the company said. The recapitalization "will permit Doral to continue as a well-capitalized major financial institution in Puerto Rico," said Doral chairman Dennis G. Buchert. "Although highly dilutive to existing common shareholders, the board believes it is the best, and probably the only, means to retain some value for existing shareholders and enable them to participate in the future of the company." After the announcement of the recapitalization plan, Fitch Ratings downgraded Doral Financial's long-term issuer default rating from B-plus to B and lowered several of the company's other ratings.

The rating on class A-5 of Asset Securitization Corp.'s commercial mortgage pass-through certificates series 1995-MD IV has been revised from Rating Watch Negative to Rating Watch Evolving by Fitch Ratings.In addition, class B-1 was placed on Rating Watch Evolving and the ratings on five other classes of the same series were affirmed. Fitch attributed the revision from Rating Watch Negative to the upcoming maturity of the largest of the two remaining loans in the pool. Although class A-5 has unpaid interest shortfalls, the rating agency said it expects the shortfalls to be fully recovered. Fitch can be found online at http://www.fitchratings.com.

Four certificates from Renaissance Home Equity Loan Trust deals issued in 2002 and 2003 have been placed under review for possible downgrade by Moody's Investors Service.The affected securities are: series 2002-1, classes M-2 and B; series 2002-4, class B; and series 2003-2, class M-4. In addition, nine classes were placed under review for possible upgrade. The negative rating actions were attributed to credit enhancement levels that are considered low given the projected losses on the underlying pools. The transactions consist of subprime, primarily first-lien, adjustable- and fixed-rate loans.

Two certificates from SG Mortgage Securities Trust 2006-FRE1 have been downgraded by Moody's Investors Service.Class M-10 was downgraded from Ba1 to Ba2, and class M-11 was downgraded from Ba2 to B2. The reason for the downgrades is that credit enhancement levels may be low given the projected losses on the underlying pools, Moody's said. The transaction " has built up a large delinquency pipeline of approximately 13% in foreclosure" and real estate owned compared with the available overcollateralization, according to the rating agency. The deal consists of subprime, primarily first-lien, adjustable- and fixed-rate loans.

Three classes from two Fremont Home Loan Trust deals issued in 2005 have been downgraded by Moody's Investors Service, and three classes from another deal have been has placed under review for possible downgrade.The downgrades were as follows: series 2005-1, class B-1, from Ba1 to Ba3, and class B-2, from Ba2 to B3; and series 2005-B, class M-11, from Ba1 to B2. Classes M-9, M-10, and M-11 of series 2006-B were placed on review, and Moody's confirmed the rating on one class from series 2005-1. The negative rating actions were attributed to credit enhancement levels (including excess spread) that are deemed too low in view of projected losses. The transactions are backed by first- and second-lien adjustable- and fixed-rate mortgage loans.