Servicing

Two tranches of GSAMP Trust 2004-SEA2 have been downgraded by Moody's Investors Service, and two other tranches have been placed on review for possible downgrade.Class B-1 of the transaction was downgraded from Baa3 to Ba3, and class B-2 was downgraded from Ba1 to Caa3. Classes M-4 and M-5 were placed on review for possible downgrade. Moody's also upgraded one tranche issued by GSAMP Trust 2003-SEA2. The negative rating actions were based on a "rapid deterioration" of overcollateralization caused by accelerating losses, Moody's said. "From March to May of 2006. the transaction incurred nearly $4 million in losses," the rating agency reported. The deal consists of seasoned subprime mortgage loans, some of which experienced delinquency prior to securitization. Moody's can be found online at http://www.moodys.com.

Fitch Ratings has upgraded the residential primary servicer rating of National City Home Loan Services, Pittsburgh, from RPS2-minus to RPS2 for alternative-A and subprime loans.In addition, Fitch raised National City's special servicer rating from RSS3-plus to RSS2-minus. The primary servicer ratings are based on the company's "experienced management team, commitment to technology enhancements, and solid internal control environment," Fitch said. The special servicer rating reflects its "reliable default management and asset liquidation methodologies," the rating agency said. Fitch can be found online at http://www.fitchratings.com.

Two tranches of RFC's RFSC series 2003-RP1 Trust have been downgraded by Moody's Investors Service.Class M-2 was downgraded from A2 to Baa1, and class M-3 was downgraded from Baa2 to B3. The downgrades were attributed to "high and rapidly rising levels of cumulative loss," a large proportion of severely delinquent loans, and "significant deterioration" of overcollateralization in recent months. The underlying collateral consists of subprime and re-performing residential mortgage loans. Moody's can be found online at http://www.moodys.com.

Barclays Bank PLC, London, has announced an agreement to acquire the U.S. subprime mortgage servicing business of HomEq Servicing Corp. from Wachovia Corp., Charlotte, N.C., for a total consideration of $469 million.The consideration represents net book value for the mortgage servicing rights and fixed assets "and $209 million in respect of advances, the collection of which is fully indemnified by Wachovia," Barclays said. The consideration is subject to an adjustment mechanism based on the value of the MSRs and advances at the closing of the transaction. The company said the acquisition will expand the capabilities of the growing U.S. mortgage securitization franchise of Barclays Capital, the bank's investment banking division. Barclays Capital can be found on the Web at http://www.barclayscapital.com.

Moody's Investors Service has downgraded one subordinated tranche from a mortgage-backed securitization issued by Credit Suisse First Boston Mortgage Securities Corp. in 2001.The downgrade of class M-2 of series 2001-HE25 from A2 to Baa1 "is based on the fact that the bonds' current credit enhancement levels, including excess spread, are low compared to the current projected loss numbers for the current rating level," Moody's said. The rating agency can be found on the Web at http://www.moodys.com.

Manoj Singh has been named senior vice president of market risk oversight at Freddie Mac.Mr. Singh was most recently a senior managing director at Bear, Stearns & Co. He was previously a senior vice president at Lehman Brothers, where he was responsible for the risk management of all mortgage products, including residential mortgage trading and securitization, wholesale trading and securitization, asset-backed securities, and commercial mortgage-backed securities, Freddie Mac said. The government-sponsored enterprise can be found online at http://www.freddiemac.com.

Mortgage products with amortization terms of more than 30 years present "markedly" different risk profiles for different product types, according to a recent study by Fitch Ratings."The main risks associated with a longer amortization schedule are the higher payment increases, increased adverse selection risk, and slower equity build-up," said Suzanne Mistretta, senior director at Fitch. The report looks at the performance of 40-, 45-, and 50-year option adjustable-rate, hybrid, and fixed rate mortgages. Fitch can be found on the Web at http://www.fitchratings.com.

The percentage of home loans that are past due or in foreclosure showed widespread improvement in the first quarter, according to the Mortgage Bankers Association.Overall, 4.41% of home loans were at least 30-days late at the end of the first quarter, down 29 basis points from the fourth quarter on a seasonally adjusted basis, according to the MBA's National Delinquency Survey. The percentage of loans in the foreclosure process declined one basis point to 0.98% from the previous quarter. MBA chief economist Doug Duncan said a strong economy and job growth in the first quarter offset factors such as the aging of the loan portfolio, rising short term interest rates, and high energy prices that have put upward pressure on delinquency rates.

Two classes of notes issued by Phoenix CDO II Ltd., a collateralized debt obligation that includes mortgage-backed securities, have been downgraded by Fitch Ratings.Classes C-1 and C-2 have been downgraded from CCC to C. Fitch attributed the downgrades to a recent default that it expects to cause the undiscounted principal received by the notes to fall "substantially" below their current balance. The transaction, a CDO managed by Phoenix Investment Partners, is composed of asset-backed securities, residential MBS, and commercial MBS. The rating agency can be found online at http://www.fitchratings.com.

Interactive Mortgage Advisors, Denver, is brokering the sale of servicing rights on a $50 million portfolio of home loans.The portfolio consists of Freddie Mac, Fannie Mae, and private-label loans from 26 states, with the largest concentration of loans in Georgia. The average loan size is $139,283. The weighted average interest rate is 5.794% on the loans, and the weighted average servicing fee is 0.296%. Bids are due on Thursday, June 22.