Servicing

The National Advisory Council has released national standards for consumer homeownership education and counseling that it says would help prevent a repeat of today's wave of foreclosures if widely adopted.The council said the standards are the product of a two-year development process led by industry stakeholders. It is "the first time that representatives from all corners of the housing industry have reached agreement on a set of benchmarks for the delivery of quality education and counseling to consumers across the nation," the council said. A 23-member National Homeownership Industry Standards Advisory Council that includes the Federal Reserve System, the Department of Housing and Urban Development, Fannie Mae, Freddie Mac, and Countrywide Financial Corp. has been established in connection with the new standards. Other members include NeighborWorks America, Bank of America, Chase, Citi, Wells Fargo, and the National Association of Realtors. A description of the National Industry Standards for Homeownership Education and Counseling can be found online at http://www.homeownershipstandards.com.

Nine classes from four IndyMac ABS Inc. home equity issues have been downgraded by Fitch Ratings.In addition, two classes have been placed on Rating Watch Negative, one class has been upgraded, the Distressed Recovery ratings on two classes have been upgraded, and the ratings on 36 other classes in six IndyMac ABS home equity deals have been affirmed. The negative rating actions were attributed to a deterioration in the relationship between credit enhancement and expected losses. The rating agency can be found online at http://www.fitchratings.com.

Irwin Home Equity Corp.'s residential primary servicer ratings for home equity and high loan-to-value products have been downgraded from RPS2-minus to RPS2 by Fitch Ratings.The downgrades reflect "profitability pressures" at IHE's parent company, Irwin Financial Corp., and the fact that continued weakness in the sector could affect Irwin Financial's financial flexibility, Fitch said. Irwin Financial reported a loss in the first quarter, partly due to a $10.1 million loss at the San Ramon, Calif.-based IHE, the rating agency said. Fitch can be found on the Web at http://www.fitchratings.com.

AIG Financial Products Corp., Wilton, Conn., has acquired a "significant" minority stake in The REX Group, a group of San Francisco-based home finance companies, according to AIG-FP.The company said its unspecified "strategic investment" in The REX Group (including Real Estate Equity Exchange Inc. and Odin Investment Management LLC) represents "its commitment to develop U.S. residential real estate equity as an important new asset class." Joseph Cassano, president of AIG-FP, said his company "has played a leading role in developing commodities as an asset class" and that its goal is "to replicate this model" for residential real estate equity. The REX Group's first product, the REX Agreement, is a real estate equity purchase agreement that gives the homeowner a portion of the home's equity in cash in exchange for the right of the company to share in a specified percentage of the future value of the home, AIG-FP said. The companies can be found online at http://www.aigfp.com and http://www.rexagreement.com.

The Department of Housing and Urban Development will sponsor a homeownership "security" conference May 14 offering industry officials advice on working with troubled borrowers who might be in danger of foreclosure.Speakers include: Richard Price, vice president of subprime servicer EMC Mortgage; Robin Stout Magala, senior delinquency resolution manager for Freddie Mac; and Federal Housing Commissioner Brian Montgomery, among others. (EMC is owned by Wall Street firm Bear Stearns & Co., which has been enforcing buyback agreements on lenders.) The conference, which starts at 9 a.m., will be held in Washington.

Freddie Mac is reminding its servicers that they have the discretion to provide up to a year's worth of mortgage relief to borrowers with homes damaged by the tornados that ripped through Greensburg, Kan., and other towns that President Bush has designated major disaster areas.Disaster relief policies are available in major disaster areas designated by the Federal Emergency Management Agency where individual FEMA assistance is available. Freddie Mac gives mortgage servicers the discretion to reduce or suspend mortgage payments for up to 12 months for borrowers with Freddie Mac-owned mortgages in the FEMA-designated disaster areas. Each case must be individually assessed to determine which option will best fit the homeowner's circumstances. "Freddie Mac and the nation's mortgage servicers are working together to bring some measure of financial relief to homeowners who were affected by these storms," said Ingrid Beckles, vice president of servicing and asset management at Freddie Mac. "Borrowers in these major disaster areas should contact their mortgage servicers to discuss forbearance or other workout options Freddie Mac supports when disaster strikes." Freddie can be found online at http://www.freddiemac.com.

Thanks to a strong refinancing market, Countrywide Home Loans originated $40.4 billion of home mortgages in April, an 11% gain from its volume in the same month last year.However, its nonprime fundings plunged by 48% to just $1.68 billion. The company released its April results on May 9, a day after its stock ran up 7.2% on takeover rumors. Countrywide's policy is not to comment on takeover talk, but investment banking sources familiar with the company told MortgageWire that they do not think the firm is in play. In April, refinancings accounted for 61% of its production, compared with 54% for the same month last year. About 0.69% of all the loans Countrywide services ($1.4 trillion) are in some form of foreclosure. The company can be found online at http://www.countrywide.com.

Six classes of Fremont Home Loan Trust's residential mortgage-backed certificates, series 2006-B pool 2, have been downgraded by Fitch Ratings.The downgrades were as follows: class SL-M5, from A-plus to BBB-minus; class SL-M6, from A to BB-minus; class SL-M7, from A-minus to B; class SL-M8, from BBB-plus to C/DR6; class SL-M9, from BBB-plus to C/DR6; and class SL-B1, from BBB to C/DR6. Classes SL-M5, SL-M6, and SL-M7 were placed on Rating Watch Negative, as were classes SL-M3 and SL-M4 of pool 2, classes M-9, M-10, and M-11 of pool 1, and class M-6 of series 2003-B. Fitch also upgraded four classes from the Fremont deals and affirmed the ratings on 18 classes in the subprime transactions. The downgrades were attributed to deterioration in the relationship between credit enhancement and expected losses.

Thirteen classes of GS Mortgage Securities Corp. residential mortgage pass-through certificates from four GSAMP transactions have been downgraded by Fitch Ratings.Fitch also placed 11 classes on Rating Watch Negative, assigned Distressed Recovery ratings to five classes, and affirmed the ratings on 16 other classes in the transactions. The negative rating actions were attributed to faster-than-expected prepayments and earlier-than-expected collateral losses for series 2005-S1 and 2005-S2; losses that have exceeded excess spread for the past eight months for series 2006-S1; and losses that have exceeded excess spread for three of the past four months for series 2006-S2. The deals consist of closed-end fixed-rate mortgage loans secured by second liens on residential properties.

The long-term issuer default ratings of R&G Financial Corp., San Juan, Puerto Rico, and R&G Mortgage have been lowered from BB to BB-minus by Fitch Ratings.Fitch also downgraded R&G Financial's preferred stock from B to B-minus, lowered various ratings of other R&G subsidiaries such as R-G Premier Bank and R-G Crown Bank, and maintained its negative rating outlook on the companies. The rating agency said the actions stemmed from the longer-than-expected delay in releasing audited financial statements, regulatory and legal issues, R&G's deteriorating operational results in 2006, and the mix and level of its capitalization. "R&G is lagging its Puerto Rican peers in the resolution of its accounting issues," Fitch said. Fitch can be found online at http://www.fitchratings.com, and R&G Financial can be found at http://www.rgonline.com.