Servicing

The Prestwick Mortgage Group, Alexandria, Va., is brokering the sale of servicing rights on a $46 million portfolio of loans backed by Ohio homes.The weighted average note rate is 6.054%, and the average loan balance is 84,358. Bids are due at 5 p.m. EDT on June 6.

A portfolio of servicing rights on $262 million of Fannie Mae and Ginnie Mae loans is being offered for sale by Interactive Mortgage Advisors, Denver.IMA is brokering the sale of the portfolio, which consists of two parts: an $88 million Ginnie Mae piece and a $174 million Fannie Mae piece. Bidders can bid on either portion or for the entire portfolio. Bids are due June 7 at 5 p.m. Mountain time.

First BanCorp, San Juan, Puerto Rico, has reported a cash payment of approximately $2.4 billion from Doral Financial Corp. to First BanCorp's subsidiary FirstBank, "substantially reducing" the balance of approximately $2.9 billion in mortgage-related commercial loans outstanding to Doral.The commercial loans resulted from First BanCorp's previously announced revised classification of several mortgage-related transactions with Doral. The payment reduced the balance of the commercial loans to Doral to approximately $450 million, First BanCorp said, adding that it "expects additional accelerated payments by Doral." The loans had been recorded as purchases of residential real estate loans from Doral by FirstBank, and they were later reclassified as commercial loans secured by mortgages. FirstBank has agreed to reimburse Doral for 40% of the net losses incurred by Doral as a result of sales of the mortgages, subject to certain conditions. First BanCorp can be found online at http://www.firstbankpr.com.

Freddie Mac has reported that its net income fell 27% to $2.1 billion last year, from $2.9 billion in 2004, primarily because of $600 million in costs associated with settling securities litigation, charges related to Hurricane Katrina, and certain accounting changes.Freddie Mac also warned that its earnings would likely show increased volatility in the future due to "asymmetric mark-to-market accounting treatment" of certain assets and liabilities. Those accounting changes affect another measure of Freddie Mac's performance, the value of net assets, before capital transactions, attributable to common shareholders. The net value declined slightly last year, to $26.7 billion at the end of 2005. In a conference call with investors and analysts, Freddie Mac executive vice president Patricia Cook said wider mortgage-to-debt option-adjusted spreads reduced the fair value of net assets, but that the wider spreads will actually benefit Freddie Mac in the long term. Freddie Mac chairman and chief executive Richard Syron and chief operating officer Eugene McQuade said the fundamentals of the business remain good, stressing that Freddie Mac gained market share last year and exceeded a 30% surplus capital target by some $3.5 billion.

Class B of First Union Home Equity Loan mortgage pass-through certificates, series 1997-3, has been downgraded from B to CCC by Fitch Ratings and assigned a Distressed Recovery rating of DR2.Fitch said the downgrade reflects the deterioration of credit enhancement relative to expected losses, largely as a result of liquidations that have reduced the amount of overcollateralization supporting the transaction. The collateral consists of mixed fixed-rate and balloon mortgages extended to subprime borrowers.

Two classes from two Ameriquest Mortgage Securities Inc. home equity issues have been downgraded and removed from Rating Watch Negative by Fitch Ratings.Class M2 of series 2002-C and class M-4 of series 2002-3 were downgraded from BBB-minus to B. In addition, Fitch affirmed the ratings on four classes from the two Ameriquest transactions. The downgrades were attributed to a deterioration in the relationship between credit enhancement and expected losses.

Three classes of Argent Securities Inc.'s ARSI series 2004-PW1 home equity issue have been downgraded and removed from Rating Watch Negative by Fitch Ratings.The downgrades were as follows: class M9, from BBB-minus to BB; class M10, from BB-plus to B-plus; and class M11, from BB to B. Fitch also affirmed the ratings on nine other classes from the transaction. The downgrades were attributed to a deterioration in the relationship between credit enhancement and expected losses. The transaction consists of loans originated or acquired by Argent Mortgage Co. or Olympus Mortgage Co., Fitch said.

Five classes from five Conseco/Green Tree home equity loan deals have been downgraded by Fitch Ratings.The downgrades were as follows: Green Tree Home Equity 1998-C, class B-2, from CCC/DR1 to CC/DR2; Green Tree Home Equity 1999-C, class B-2, from C/DR2 to C/DR6; Green Tree Home Equity 1999-D, class B-2, from CCC/DR1 to C/DR4; Conseco Home Equity 2001-B B2, class B-2, from BB to B-plus; and Conseco Home Equity 2001-D, class B-1, from BB-minus to B. In addition, Fitch upgraded 11 classes and affirmed the ratings on 54 other classes in 18 Conseco/Green Tree home equity and home improvement transactions. The downgrades were attributed to a deteriorating relationship between credit enhancement and expected losses. Fitch can be found online at http://www.fitchratings.com.

Six certificates from two ACE Securities Corp. Home Equity Loan Trust subprime mortgage deals have been downgraded by Moody's Investors Service.The downgrades were as follows: series 2002-HE1, class M-2, from A2 to Baa1, class M-3, from Baa2 to B1, and class M-4, from Baa3 to B3; and series 2004-HE1, class M-5, from Baa2 to Baa3, class M-6, from Baa3 to Ba2, and class B, from Ba2 to Caa2. The downgrades were attributed to the weaker-than-expected performance of the mortgage collateral and the resulting erosion of credit support. "In both of the transactions, overcollateralization amounts are currently below their targets, and pipeline losses are likely to cause eventual depletion of the overcollateralization and losses on the most subordinate tranches," Moody's said. In addition, credit enhancement levels may be low given the projected losses on the underlying pools, according to the rating agency. Moody's can be found online at http://www.moodys.com.

Three certificates from First Franklin Mortgage Loan Trust series 2002-FF2 have been downgraded by Moody's Investors Service.The downgrades were as follows: class M-1, from Aa2 to A2; class M-2, from A2 to Ba1; and class M-3, from Baa1 to Ba2. Moody's said it downgraded the certificates because credit enhancement levels are low in view of projected losses on the underlying pools, and loss severities on liquidated loans are on the rise. The transaction consists of subprime first-lien mortgage loans originated by First Franklin Financial Corp. Moody's can be found online at http://www.moodys.com.