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RealtyTrac, an online foreclosure marketplace based in Irvine, Calif., has reported that 846,982 properties nationwide entered some stage of foreclosure in 2005, a 25% increase.The company's 2005 U.S. Foreclosure Market Report is based on the company's database of pre-foreclosure and foreclosure properties, which it says includes more than 550,000 properties in nearly 2,000 counties across the country. "Overall, U.S. foreclosure numbers climbed steadily over the course of the year, with more new foreclosures reported in every quarter," said James J. Saccacio, RealtyTrac's chief executive officer. "This trend appears to be moving the real estate foreclosure market back to its historic levels." The company said Florida had the nation's highest foreclosure rate and accounted for more than 14% of new foreclosures last year, despite a 29% decrease in new foreclosures in the state from the first quarter to the fourth. RealtyTrac can be found online at http://www.realtytrac.com.

Bank of America Corp., Charlotte, N.C., has reported net income of $16.89 billion ($4.15 per share) for 2005, up 19% from $14.14 billion ($3.69 per share) in 2004.Home equity production volume rose 27% to a record $72 billion, BoA said. For the fourth quarter, the company reported net income of $3.77 billion ($0.93 per share), down from $3.85 billion ($0.94 per share) a year earlier. The company can be found online at http://www.bankofamerica.com.

Friedman Billings Ramsey has downgraded Fannie Mae's stock to "underperform" because the giant mortgage company could be stuck with higher capital requirements and slower portfolio growth for two years.FBR analyst Paul Miller estimates that it could take Fannie "another two years" to become current in its financial reporting, while Freddie Mac is expected to become current by the end of this quarter. "For Fannie Mae, we believe portfolio growth will be limited to mid-single digits given continued restrictions on capital levels and management focus on restatement and becoming current in financial reporting," says a new FBR research paper. FBR reduced its 12-month price target for Fannie's stock to $44 from $65. At the same time, Mr. Miller increased the price target for Freddie's stock from $70 to $76, calling it an "outperform." The analyst said he expects Freddie's regulator to reduce its capital requirement in the first half of this year, which would allow for mid- to high-single-digit portfolio growth.

Issuance of U.S. private-label residential mortgage-backed securities will decline this year but remain strong enough to record the market's second-best year, Standard & Poor's Ratings Services is forecasting.S&P's forecast calls for private-label RMBS volume of as much as $900 billion in 2006, compared with a record $1.2 trillion in 2005. "The sector will experience generally strong rating performance, although increasing risks presented by the recent popularity of affordability products could contribute to deteriorating credit quality in the coming year," said S&P analysts Thomas Warrack and Ernestine Warner. Last year, the record RMBS issuance was led by the subprime sector's volume of $450 billion, while the alternative-A/B sector's volume doubled to more than $300 billion, S&P reported. The rating agency can be found online at http://www.standardandpoors.com.

MFA Mortgage Investments Inc., New York, has announced that it will recognize about $21 million in noncash impairment charges in the fourth quarter in connection with about $824 million worth of mortgage-backed securities that it no longer plans to hold until a recovery of market value.MFA Mortgage, a real estate investment trust, said the charges are in addition to about $18 million in previously announced losses related to the sale of about $565 million worth of MBS in 2005. "These actions were undertaken based on a number of factors, including the 13 consecutive increases in the target fed funds rate from 1% to 4.25% and a flattening of the yield curve," the REIT said. The company can be found online at http://www.mfa-reit.com.

Citing "questionable appraisals" and other factors, FNB Financial Services Corp., Greensboro, N.C., has announced that its banking subsidiary, FNB Southeast, recorded a $13.6 million special provision for credit losses in the fourth quarter."Through an internal investigation and reviews by independent consultants, the bank has identified a significant number of loans in its Harrisonburg, Va., region which are believed to have questionable appraisals and/or collateral value or which were incorrectly graded for credit risk based on the financial strength of the borrower and other factors," FNB Financial said. The company said the bank has also reclassified certain loans outside the Harrisonburg region because of the borrowers' deteriorating financial condition and the bank's discovery of "a significant reduction in the collateral base" of the loans. FNB Financial said it expects the provision for credit losses to reduce its annual earnings by approximately $8.5 million.

Washington Mutual, Seattle, has reported that it earned just $47 million off its residential lending business in the fourth quarter, a 71% decline from the level of a year earlier.Compared with those of the third quarter, home lending profits fell by 75%. WaMu chairman and chief executive Kerry Killinger attributed the earnings dropoff to a "challenging environment" in residential finance, including increased hedging costs and a flat yield curve. The thrift reports its subprime profits separately from home lending through its "commercial group." That division, which includes nonconforming lender Long Beach Mortgage, earned $164 million in the fourth quarter, a 21% gain from that of a year earlier, but a 24% decline from earnings in the third quarter. Even though its mortgage business suffered, overall earnings at the nation's largest thrift -- and third-largest mortgage lender -- rose 12% to $865 million. WaMu funded $50.4 billion in home mortgages during the quarter, including $11.7 billion in payment-option adjustable-rate mortgages. Its production volume was just about flat compared with that of the same quarter a year ago. In an analyst note, Sandler O'Neill -- which has a "hold" rating on the company -- described the mortgage business as "increasingly competitive in both the prime and subprime segments."

Two classes from Goldman Sachs Mortgage Securities Corp. series 2002-3F have been placed on Rating Watch Negative by Fitch Ratings.The affected classes, both from group 1, are class IB-4 and class IB-5. Fitch also affirmed the ratings on 29 classes from seven Goldman Sachs issues. The Rating Watch placement was attributed to higher-than-expected delinquency levels. The collateral pool consists of fixed- and adjustable-rate mortgage loans extended to prime and alternative-A borrowers, the rating agency said.

The risk of price declines over the next two years has risen in the nation's 50 largest housing markets, but a "soft landing" is likely, according to PMI Mortgage Insurance Co., Walnut Creek, Calif.The median risk index value in the PMI U.S. Market Risk Index rose 25% in the fourth quarter, increasing from 134 to 168, the company reported. This means the probability of experiencing a home price decline in the next two years has risen from 13.4% to 16.8% in the 50 largest housing markets. "We expected what we are seeing in the third-quarter data, which is a moderating of appreciation that, over time, is likely to bring prices back into line with the economic fundamentals that support them, particularly incomes," said Mark Milner, chief risk officer of PMI Mortgage Insurance. Mr. Milner said he believes that a gradual slowing of appreciation will contribute to a soft landing as long as the U.S. and regional economies stay robust. According to the index, there are now 11 markets with a greater than 50% chance of price declines over two years, up from five in the third quarter. PMI can be found online at http://www.pmigroup.com.

Six classes from two Residential Asset Securities Corp. home equity transactions have been downgraded by Fitch Ratings.The downgrades were as follows: RASC series 2001-KS2 group 1, class M-I-1, from AA to AA-minus, class M-I-2, from A to A-minus, and class M-I-3, from BB to B; and RASC series 2001-KS3 group 1, class M-I-1, from AA to AA-minus, class M-I-2, from A to A-minus, and class M-I-3, from BBB-minus to B. Fitch also affirmed the ratings on 12 classes from the two deals. The rating actions were attributed to the "potential negative impact" of loan performance on the bonds. Fitch can be found online at http://www.fitchratings.com.