Servicing

Class A of Signal Securitization Corp. series 1998-2, a manufactured housing transaction, has been downgraded from BBB-minus to BB-minus by Fitch Ratings.In addition, one class in another Signal deal was upgraded and the ratings on two other classes from two Signal MH transactions were affirmed. The downgrade was attributed to cumulative losses that are expected to total 29%. The rating agency noted that Signal Bank NA bought manufactured housing contracts through Mobile Consultants Inc., who originated and subserviced manufactured housing contracts for Signal Bank and 25 other lenders. MCI was acquired by Signal Bank's parent, First Federal Savings Financial Services.

Five classes in four Bombardier Capital Mortgage Securitization Corp. manufactured housing deals have been downgraded by Fitch Ratings.The downgrades were as follows: class M of series 1998-A, from BBB to BB; class A of series 1998-B, from BBB-minus to BB-minus; class A of series 1998-C, from A to BBB; and, in series 2001-A, class A, from A-plus to A, and class M-1, from BB-minus to B. Fitch said cumulative losses as a percentage of the initial pool balance are expected to total approximately 40%-48% for the 1998 transactions and 39% for the series 2001-A deal. Fitch noted that Bombardier provided retail financing for manufactured homes before exiting the business in September 2001. It continued to service its MH loan portfolio until March 2006, when the portfolio and servicing rights were acquired by Green Tree Servicing LLC, the rating agency said.

Eighteen classes of Oakwood Homes Corp. manufactured housing transactions have been downgraded by Fitch Ratings.The downgrades were as follows: class M of series 1997-B, from A-minus to BBB-plus; class M of series 1997-C, from BBB-plus to BBB; class M of series 1997-D, from BBB-minus to BB; classes A-3, A-4, and A-5 of series 1999-B, from AA-minus to A-plus; classes A-1 and A-ARM of series 1998-C, from BBB-plus to BBB-minus; classes A-2, A-3, A-4, and A-5 of series 1999-A, from BBB-minus to BB; classes A-2, A-3, and A-4 of series 1999-B, from BB-minus to B; and classes A-2, A-3, and A-4 of series 2001-B, from BBB-minus to BB-plus. The rating agency also upgraded one class and affirmed the ratings on 52 classes in 19 Oakwood transactions. In explaining the downgrades, Fitch said cumulative losses as a percentage of the initial pool balance are expected to total approximately 17%-23% for the 1995-1996 transactions, 22%-38% for the 1997-1999 transactions, and 34%-46% for the 2000-2001 transactions. The rating agency can be found on the Web at http://www.fitchratings.com.

In the first quarter, 88% of the homeowners who refinanced their homes got a mortgage at least 5% larger than the original loan, the highest such percentage since the third quarter of 1990, according to Freddie Mac.The percentage was up from 81% in the previous quarter and much higher than the 64% level recorded a year earlier, the government-sponsored enterprise said in its quarterly refinance review. "The share of all mortgages that were for refinance fell slightly in the first quarter of 2006 to 44% from 45% in the fourth quarter of 2005," said Frank Nothaft, Freddie Mac's chief economist. ".... [T]he first quarter of 2006 is the first time in 20 quarters in which the new mortgage rate was higher than the old one for more than half of refinancing borrowers." Freddie Mac can be found online at http://www.freddiemac.com.

Texas, Ohio, Michigan, Georgia, and Indiana led the nation in March in residential foreclosures, and recorded some of the fastest monthly growth in foreclosures as well, according to Foreclosure.com, an online listing service based in Boca Raton, Fla.Total residential foreclosures rose 38% in Texas, which led the nation in foreclosed homes with 98,020, while the totals in the other four states grew by roughly one-third in March, the company reported. "Markets that benefited disproportionately from the housing boom over the last five years are most susceptible to foreclosures," said Brad Geisen, president and chief executive officer of Foreclosure.com. But he noted that "even areas where home prices didn't appreciate as quickly are now seeing increased foreclosures." The company can be found online at http://www.foreclosure.com.

The Prestwick Mortgage Group, Alexandria, Va., is brokering the sale of servicing rights on $347 million of home loans largely from Indiana and Ohio.The weighted average note rate is 5.807%, and there is a weighted average servicing fee of 0.3351%. The average loan balance on the Fannie Mae loans is $103,419. Bids are due by 2 p.m. EDT on May 12.

Atlanta-based NetBank has announced plans to sell its mortgage servicing platform along with most of its mortgage servicing rights on $13 billion of home loans.NetBank said management believes the proposed sale will free up $20 million to $35 million in risk-based capital that the company has allocated to its servicing asset. "When we committed to this line of business as part of our overall income diversification strategy for the company, we set a goal of growing the servicing asset to at least the $25 billion mark," said Douglas Freeman, NetBank's chairman and chief executive officer. "Based on our analysis, we needed to reach this minimum level to rationalize our investment and to have the asset serve as an effective macro hedge against our mortgage production network." He added that economic and market changes have made it difficult for NetBank to increase the servicing asset as much as the company had hoped. NetBank can be found online at http://www.netbank.com.

BRT Realty Trust, a real estate investment trust based in Great Neck, N.Y., has announced the sale of $30 million of trust preferred securities in a private placement.The mortgage REIT said the sale will enable it to continue the expansion of its lending activities. The 30-year securities will bear interest of 8.49% through April 30, 2016, and at a floating rate of 2.90% above the three-month London interbank offered rate after that, the company said. BRT can be found online at http://www.brtrealty.com.

Saxon Capital Inc., a residential mortgage lending and servicing real estate investment trust based in Glen Allen, Va., has announced the pricing of a private offering of $150 million of senior notes due in 2014.The notes will bear interest at a fixed rate of 12%. The net proceeds will be used chiefly to acquire additional third-party mortgage servicing rights and whole loans in bulk, Saxon said. The REIT can be found online at http://www.saxonmortgage.com.

Alesco Financial Trust, a Philadelphia-based specialty finance real estate investment trust, has agreed to merge with Sunset Financial Resources, a Jacksonville, Fla.-based specialty finance REIT.Sunset will issue 1.26 shares of its stock for each Alesco share. The REITs said the merged company will pursue Alesco's strategy of focusing on trust preferred securities issued by banks and insurance companies, middle-market loans, and residential mortgage-backed securities. Alesco is managed by Cohen Brothers Management LLC, Philadelphia. Sunset has entered into an interim management agreement with Cohen Brothers that allows the REIT to convert its existing assets into assets consistent with the investment strategy of the merged companies. Alesco is currently not publicly traded, while Sunset trades on the New York Stock Exchange. Based on Sunset's April 27 closing price of $8.85 per share, each Alesco share is valued at $11.15 per share.