Servicing

The Foreclosure Economic Advisory Council, a new nonprofit group formed to promote sustainable homeownership by analyzing foreclosure trends, has announced the members of its advisory board.The members are: Wanda Alexander, founder, president, and chief executive officer of Horizon Consulting Inc.; James P. Gaines, a research economist at the business school of a Southwestern university; Bradford R. Geisen, founder of Foreclosure.com in Boca Raton, Fla.; Glenn E. Gromann, senior partner at Smith and Gromann PA, a specialty real estate law firm; Frank Marshall, a frequent speaker at conferences in the real-estate-owned industry; and Michael G. Nathans, founder, president, and CEO of PRBC.com, a credit bureau payment reporting business. Marla Webb has been named senior adviser to the council. "A sustained high rate of foreclosures in the country, as well as the continued uncertainty within the real estate market and the increasing number of homeowners engaged in alternative, low-payment mortgage programs, led us to develop the FEAC -- with the goal of understanding what the primary causes of foreclosures are and how to better promote sustainable homeownership in the U.S.," Ms. Webb said.

Freddie Mac has identified the loan-level variables it intends to disclose at issuance for single-family fixed-rate and adjustable-rate mortgage Participation Certificates.The company said it will begin providing the expanded disclosures in the fourth quarter and that updates to PC disclosures will continue to be available at the pool level for new and previously issued PC securities. Freddie Mac said it is working with data providers to accommodate the disclosures of several dozen loan-level variables, including credit score, loan age, loan purpose, net note rate, occupancy status, original loan-to-value ratio, property type, and servicer name. Freddie said it will make the disclosures available on its website, http://www.freddiemac.com/mbs, beginning in the fourth quarter.

Fannie Mae has announced that it will make available 1,500 single-family properties from its inventory of real estate owned to provide temporary housing for individuals and families displaced by Hurricane Katrina.The government-sponsored enterprise said it will provide the REO properties for rent-free leasing for up to 18 months. The properties are located in states with the highest concentration of evacuees, including Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Oklahoma, Tennessee, and Texas. Fannie Mae said it will discuss how best to carry out the initiative with the Department of Housing and Urban Development and the Federal Emergency Management Agency. The GSE can be found online at http://www.fanniemae.com.

Two classes of Ace Securities Corp. series 1999-LB2 mortgage-backed securities have been downgraded by Fitch Ratings.Class M-2 was downgraded from A to A-minus, and class B was downgraded from BBB to BBB-minus. In addition, Fitch affirmed the ratings on 13 classes from five Ace Securities deals and upgraded three classes. The rating agency said the downgrades resulted from higher-than-expected collateral losses and a deteriorating relationship between loss expectations and credit support. "Losses have exceeded excess spread in five out of the last six distribution dates, resulting in a decline of [overcollateralization] to $1.85 million, below its target of $2.08 million," Fitch said. The pool consists of adjustable- and fixed-rate, first-lien residential subprime mortgage loans.

Five classes from three issues of CDC Mortgage Capital Trust mortgage pass-through certificates have been downgraded by Fitch Ratings.The downgrades were as follows: series 2002-HE1, class B, from BBB-minus to BB-plus; series 2002-HE2, class B-1, from BBB to BB-plus, and class B-2, from BBB-minus to BB; and series 2002-HE3, class B-1, from BBB to BBB-minus, and class B-2, from BBB-minus to BB-plus. In addition, Fitch affirmed the ratings on 33 classes from seven CDC deals. The rating agency attributed the downgrades to a deterioration in the relationship between credit enhancement and expected losses. "While Fitch feels there is no material risk of a principal writedown of the downgraded classes under the expected-case scenario, the affected classes are currently unable to satisfactorily sustain the projected stressed-case scenarios required to maintain their respective initial ratings," the rating agency said. The pools consist of fixed- and adjustable-rate subprime mortgages, primarily for one- to four-family residential properties. Fitch can be found online at http://www.fitchratings.com.

Ginnie Mae, which issued the first mortgage-backed security in 1970, is seeking public comment on its initiative to guarantee securitizations of excess servicing fees for the first time."The Excess Yield Program will allow qualifying Ginnie Mae issuers to reduce the amount of mortgage servicing rights on their balance sheets," the proposed rule says. Securitizations would reduce the capital and hedging costs associated with holding MSRs. And Ginnie officials hope it will make the Ginnie Mae program more attractive to lenders and servicers. "The Excess Yield Program should lower costs of, and encourage the origination of, government-insured and guaranteed loans that back Ginnie Mae MBS," the proposal says. "This will directly benefit low- and moderate-income borrowers and further Ginnie Mae's mission of expanding affordable housing." The comment period on the proposed rule ends Nov. 14. Ginnie guarantees mortgage securities backed by Federal Housing Administration, Department of Veterans Affairs, and Rural Housing Service home loans.

While the percentage of loans in foreclosure dropped sharply in the second quarter, the share of loans that were delinquent edged up slightly, according to the Mortgage Bankers Association.The percentage of loans in the foreclosure process fell 8 basis points from the first-quarter level to 1.00%, according to the MBA's quarterly delinquency survey. The foreclosure rate was also down 22 bps from that of one year earlier. Meanwhile, the overall delinquency rate -- the percentage of loans 30 or more days past due -- was 4.34% in the second quarter, up 3 bps from the first-quarter level. However, the overall delinquency rate remained 22 bps lower than it had been in the second quarter of 2004. Doug Duncan, the MBA's chief economist, noted that nearly 96% of mortgage customers were making their payments on time. But he added that the MBA expects "an uptick in delinquency rates over the next few quarters" in states affected by Hurricane Katrina. Higher energy costs may also exacerbate delinquency rates starting in the fourth quarter.

Argent Mortgage has announced a commitment to match up to $1 million in donations from independent mortgage brokers to HomeAid America, a nonprofit provider of transitional homes, in connection with Hurricane Katrina relief.Argent and its affiliates have already committed $3 million to jump-start HomeAid's initiative to begin constructing transitional housing for displaced families, the company said. Brokers can contribute and qualify for Argent matching donations by sending a check made out to HomeAid directly to Argent (Argent Mortgage, 3 Park Plaza, Irvine, Calif. 92614, Attn: Arlene Steinert) or by clicking on the Katrina Relief link on Argent's website at https://www.argentmortgage.com/Katrina.cfm.

Freddie Mac has instructed its 2,300 mortgage servicers to extend immediate relief to all National Guard members on state duty involving Hurricane Katrina recovery operations.The servicers are required to offer relief comparable to that already available to other members of the armed forces under the Servicemembers Civil Relief Act. SCRA protects active-duty service personnel from foreclosure and interest rates in excess of 6%, but National Guard members are not covered unless they are called to state duty in response to a national emergency declared by the president, Freddie Mac said. "Until such a declaration is made, Freddie Mac is instructing its servicers to give National Guard personnel the same SCRA credit protections anyway," the government-sponsored enterprise said. Freddie Mac said it is also reminding servicers to ensure that SCRA protections are available to active-duty and reserve military personnel covered by the law as well as officers of the U.S. Public Health Service. Freddie Mac can be found online at http://www.freddiemac.com.

Trustreet Properties Inc., a real estate investment trust based in Orlando, Fla., has announced the pricing of a private placement of $50 million of 7.5% senior notes due 2015.The notes will be issued at a price of 102.375% of par (plus accrued interest from March 23) and will mature on April 1, 2015, the restaurant REIT said. The company can be found online at http://www.trustreet.com.