Servicing

Wells Fargo & Co., whose home loan unit is based in Des Moines, Iowa, has reported that its managed servicing portfolio now exceeds $1 trillion in home loans and commercial mortgages serviced for others.At the end of last year, Wells Fargo said its servicing portfolio, including subservicing, totaled $1.016 trillion. Mark Oman, senior executive vice president in charge of Wells Fargo's home and consumer loan group, called the growth rate "astonishing," noting that Wells Fargo has doubled its servicing portfolio over the past five years. The company's totaled managed servicing portfolio increased 22% during 2005. Wells Fargo can be found online at http://www.wellsfargo.com.

Capital Trust Inc., a New York-based real estate investment trust, has announced the sale of $50 million of trust preferred securities through its consolidated statutory trust subsidiary, CT Preferred Trust I.The REIT said the subsidiary's assets consist solely of $51.55 million of junior subordinated notes concurrently issued by Capital Trust. The trust securities have a 30-year term, are redeemable at par on or after April 30, 2011, and pay distributions at a fixed rate of 7.45% for the first 10 years and at a floating rate of 2.65% over the three-month London interbank offered rate thereafter.

Freddie Mac is extending its foreclosure moratorium in many Gulf Coast communities for another three months, but starting March 1, servicers can initiate foreclosures in 65 counties and parishes that sustained only minimal storm damage in hurricanes Katrina and Rita.Freddie's current moratorium, which covers 120 counties and parishes in Alabama, Louisiana, Mississippi, and Texas, expires Feb. 28. "We are replacing our one-size-fits-all approach," Freddie senior vice president Janet Eakes said. "This announcement builds on our commitment and our servicers' commitment to continue to provide relief for borrowers in the worst disaster areas, while resuming normal business operations elsewhere." Freddie is extending the moratorium until May 31 in 21 counties and parishes with the most severe damage. In another 34 counties and parishes with less-severe damages, servicers must seek Freddie's approval to start a foreclosure. Freddie Mac can be found online at http://www.freddiemac.com.

Class B of Aegis Asset Backed Securities Trust, series 2003-1, has been placed on Rating Watch Negative by Fitch Ratings.Fitch also affirmed the ratings on four other classes in the transaction, whose collateral pool consists chiefly of subprime residential mortgage loans. The watchlist placement is due to monthly collateral losses that have exceeded excess spread and reduced overcollateralization, the rating agency said. "As of the January distribution date, the OC balance had declined to $1,079,166, below its current target of $3,006,562," Fitch reported.

Six classes of Morgan Stanley Dean Witter Mortgage Capital 2000-F1 have been downgraded by Fitch Ratings.The downgrades were as follows: class B, from A-plus to BBB; class C, from BBB-plus to BB; class D, from BBB to B; class E, from BB-minus to C; class F, from B-plus to C; and class G, from B-minus to C. The downgrades were attributed to reductions in the credit enhancement that Fitch expects to be available to support each class. "As many loans in default have remained unresolved, recovery expectations have decreased while interest liabilities continually detract from collections," the rating agency said. "These lowered expectations in conjunction with incurred losses on existing defaults have reduced subordination and credit enhancement available to outstanding bonds." Fitch can be found online at http://www.fitchratings.com.

Five classes from three Delta Funding Corp. home equity issues have been downgraded by Fitch Ratings and four classes from two other issues have been placed on Rating Watch Negative.The downgrades were as follows: Delta 1999-2, class M2, from A to BBB-plus, and class B, from CC to C; Delta 1999-3, class M1, from AA to A-plus, and class M2, from BBB to BBB-minus; and Delta 2000-3, class M-2, from A-minus to BBB. Classes M2 and B of Renaissance HELT 2002-1 and classes M2 and B of Renaissance HELT 2002-3 were placed on Rating Watch Negative. In addition, Fitch upgraded seven classes and affirmed the ratings on 68 classes from 20 Delta Funding transactions. The negative rating actions stemmed from a deterioration of credit enhancement relative to monthly losses, which have exceeded excess spread for at least nine of the past 12 months, the rating agency said. Fitch can be found online at http://www.fitchratings.com.

Prepayment rates on 30-year fixed-rate agency mortgages fell 23% in January, chiefly as a result of a seasonal slowdown in housing turnover and refinancing activity over the holiday season, according to Bear Stearns & Co.Citing the constant prepayment rate of 5.7 CPR for mortgages in Fannie Mae 4.5% mortgage-backed securities, Bear Stearns analysts Dale Westhoff and V.S. Srinivasan pointed to the extension risk "looming" over the fixed-rate mortgage market. "Even if the housing market remains relatively strong, speeds on deep discount mortgages are likely to converge to their historical norms as cash-out refinancing becomes uneconomical, forcing borrowers to look at 2nd lien mortgages and home equity lines of credit as alternative ways to tap the equity appreciation in their property," the analysts said. For 15-year Fannie Mae and Freddie Mac collateral, speeds decreased by 2.1 CPR overall, compared with a 3.1 CPR overall decline for 30-year mortgages, the Bear Stearns analysts reported. They predicted rising speeds in the February and March reporting periods, citing lower rates so far in February and the four additional business days in March. Bear Stearns can be found online at http://www.bearstearns.com.

Freddie Mac and Fannie Mae are talking about getting involved in the subprime market to increase their credit guarantee business and better serve their customers.Freddie Mac executive vice president Patricia Cook told investors at a Credit Suisse conference that there is nothing in "our charter" that says Freddie cannot purchase and securitize subprime loans. The mortgage giant currently buys triple-A-rated subprime securitizations, she said, and Freddie Mac could securitize subprime mortgages without "necessarily" increasing the company's credit risk. "The key is to be able to buy the mortgages and decide how much of that credit risk we want to retain and how much we want to sell," Ms. Cook said. A company spokeswoman said Freddie Mac has "no immediate plans" to roll out a subprime program. Fannie Mae's chief business officer, Rob Levin, also told the Credit Suisse conference that his company wants to provide secondary-market execution for a wider array of mortgage products that its customers originate. "We are also focused on ways to participate in the subprime market," Mr. Levin said.

HomeBanc Corp., Atlanta, has announced the pricing of a public offering of 2.0 million shares of 10% series A cumulative redeemable preferred stock at $25 per share.The stock has been approved for listing on the New York Stock Exchange under the symbol "HMB PrA." J.P. Morgan Securities was the sole bookrunner and lead manager of the offering. HomeBanc can be found on the Web at http://www.homebanc.com.

In the fourth quarter, 80% of the homeowners who refinanced their homes got a mortgage at least 5% larger than the original loan, up from 73% in the previous quarter, according to Freddie Mac.The percentage was much higher than the 56% level recorded a year earlier, the government-sponsored enterprise said in its quarterly refinance review. "We estimate that home equity extraction from the refinancing of prime first mortgage liens will result in an extraction of $243 billion in 2005," said Frank Nothaft, Freddie Mac's chief economist. "However, equity extraction in 2006 will likely fall sharply, by a little more than half to about $117 billion, as we expect lower refinance activity and slower house price appreciation."