Servicing

Fannie Mae has filed a Form 8-K informing the Securities and Exchange Commission that the impact of hurricanes Katrina and Rita is likely to cost the company $250 million to $550 million on an after-tax basis.Updating the SEC on its capital restoration plan, Fannie Mae also said it believes the company exceeded its 30% capital surplus requirement as of Sept. 30. In September 2004, Fannie Mae entered into an agreement with regulators stipulating that the company should hold 30% excess capital above its minimum capital standard. Fannie Mae can be found on the Web at http://www.fanniemae.com.

Two classes in Soundview Home Equity Loan Trust series 2001-1 have been downgraded by Fitch Ratings.Class M-1 was downgraded from AA to AA-minus, and class M-2 was downgraded from B to BBB-minus. Fitch also affirmed the ratings on one other class in the transaction. The downgrades were attributed to higher-than-expected losses that have caused a reduction of the overcollateralization and principal writedowns to the supporting class B. Fitch can be found on the Web at http://www.fitchratings.com.

Mortgage servicing rights on a portfolio of $170 million of Fannie Mae home loans from the Midwest are being offered for sale by Prestwick Mortgage Group, Alexandria, Va.The portfolio has a weighted average note rate of 5.968% and a weighted average servicing fee of 0.3430%. The weighted average seasoning is 32 months, and the delinquency ratio is 1.19%. Most of the properties are located in Ohio or Indiana. Bids are due Oct. 18.

Prepayment rates on 30-year, fixed-rate, agency mortgage-backed securities dropped 20% in September as a result of higher mortgage rates, fewer business days, and the beginning of the fall slowdown in housing turnover, according to Bear Stearns.The largest percentage speed declines came in the lower coupons, where 4.5s, 5.0s, and 5.5s fell 20%-25%, compared with 10%-12% declines on 6.5s and higher coupons, according to Steven M. Bergantino, managing director of mortgage research. However, discount speeds were still "well above historical norms," he said, citing the example of fully seasoned 5% coupons that prepaid at 15 CPR, versus a historical level of 9 CPR. "Moreover, these elevated discount speeds have persisted in the face of a pronounced flattening in the mortgage yield curve, providing a strong indication of the continued influence of cash-out refinancings on fixed-rate prepayments," the analyst said. Average speeds on 30-year Fannie Maes stood at 19.4 CPR overall in September, down 4.5 CPR from their August level, compared with 17.5 CPR (down 4.7 CPR) for Freddie Macs and 25.2 CPR (down 4.4 CPR) for Ginnie Maes. Bear Stearns can be found online at http://www.bearstearns.com.

Countrywide Financial Corp., Calabasas, Calif., has announced that its primary subsidiary, Countrywide Home Loans, has purchased two buildings near the Tampa International Airport to expand its corporate offices into Florida.Countrywide said it expects to make a capital investment of $20 million to $25 million, including the purchase of the building shells and property for more than $15.9 million. Patrick Benton, the company's managing director of corporate real estate administration, said the move was part of Countrywide's growth strategy to search for new office locations in business-friendly states. "In addition to the government support of targeted business development in Florida, we were attracted by the proximity of these two buildings to the airport, allowing for the convenient handling of documents that will come to this location from Countrywide offices around the country," Mr. Benton said. The company can be found online at http://www.countrywide.com.

Mortgage lenders added 3,000 full-time employees to their payrolls in August as home sales remained strong and refinancing picked up.Employment in the mortgage banker/broker sector rose from 522,200 in July to 525,200 in August, according to the Oct. 7 job report by the U.S. Bureau of Labor Statistics. (There is a one-month lag in BLS reporting of mortgage-sector employment data. The September data will be released Nov. 4.) Since August 2004, employment in the mortgage industry has grown by 9.3% with the addition of 44,300 new hires. Meanwhile, the U.S. economy lost 35,000 jobs in September in the aftermath of Hurricane Katrina, raising the unemployment rate to 5.1%, up from 4.9% in August. The effects of Hurricane Rita should show up in October's job report. The BLS can be found online at http://stats.bls.gov.

Foreclosure filings in Massachusetts were nearly a third higher through August than in the comparable period of last year, according to ForeclosuresMass, Framingham, Mass.Statewide foreclosures were 32.8% higher in the period of January through August than the levels recorded in the same months of 2004, the online data provider reported. "We have seen a remarkable spike in the past few months," said Jeremy Shapiro, president and co-founder of ForeclosuresMass. "Looking forward, it will be interesting to see how unprecedented increases in the cost of home heating fuel and gas, coupled with other pressures on mortgagees, will impact foreclosures in the months to come." The company can be found online at http://www.foreclosuresmass.com.

Nehemiah Corporation of America, a privately funded provider of downpayment assistance gifts based in Sacramento, Calif., has pledged $1.6 million to aid victims of the hurricanes of 2005.Nehemiah said it plans to combine its DPA program, community reinvestment fund, community foundation, and urban ministry program, along with support from other partners, to meet the needs of middle- to lower-income market borrowers often overlooked by the large banks. According to a Nehemiah spokesman, customer benefits include interest rates between 6% and 9% and loans that average $300,000. In addition, most of the capital will be available to developers with interest rates as low as 3% to 4%.

The Calvert Foundation, Bethesda, Md., has announced that it will direct Calvert Community Investment notes to help rebuild communities in the Gulf Coast region devastated by hurricanes Katrina and Rita.The capital raised through the notes will be used to assist with the redevelopment of affordable homes and the financing of community facilities. The foundation said its investment dollars will be placed with a broad range of private and public efforts in the Gulf Coast region, such as the Hope Community Development Credit Union in New Orleans and the Southern Mutual Help Association, which serves rural Louisiana. "We want to support local organizations -- accountable to the communities they serve -- to foster long-term revitalization and more equitable development," said foundation director Shari Berenbach. For more information about CCI notes, go to http://www.calvertfoundation.org.

Bank of America is lending a helping hand to the Gulf Coast areas devastated by hurricanes Katrina and Rita by investing $100 million in a "community development banking" effort to rebuild affordable housing and revitalize neighborhoods.BoA said it will also make available 200 apartments to displaced families in Georgia, Florida, Tennessee, and Texas. The CDB initiative includes $60 million in new construction and redevelopment loans dedicated to secure affordable housing units, and $40 million for affordable housing development and community revitalization through tax credit investments. In addition, BoA said it will partner with nonprofits like The Enterprise Social Investment Corp. and the National Equity Fund.