Servicing

Digital Realty Trust Inc., San Francisco, has priced concurrent public offerings of approximately 5.1 million shares of common stock at $17.80 per share and of 2.2 million shares of preferred stock at $25 per share.The series B cumulative redeemable preferred stock bears an interest rate of 7.875%. Digital, which owns, acquires, and manages technology-related real estate, said it has granted the underwriters an option to buy up to 765,768 additional shares of common stock and up to 330,000 shares of the preferred stock to cover any overallotments. Citigroup and Merrill Lynch & Co. are the joint book-running managers for the common stock offering and, together with UBS Investment Bank, for the preferred stock offering. The company can be found online at http://www.digitalrealtytrust.com.

Downgrades on U.S. residential mortgage-backed securities deals reached a record high of 45 in the second quarter, although rating performance overall remained strong, according to Standard & Poor's.The downgrades were offset by 306 RMBS upgrades during the quarter, for an upgrade/downgrade ratio of 6.8, S&P reported. That ratio was about half the 12.7 ratio recorded in the first quarter and the 13.8 overall ratio for the past 10 quarters, the rating agency said. The previous record high for RMBS downgrades was 31, which occurred in the first quarters of 2000 and 2005. S&P can be found online at http://www.standardandpoors.com.

With fewer loan set-ups and payoffs to manage than in the previous two years, the cost of mortgage servicing decreased and productivity improved in 2004, according to the Mortgage Bankers Association.The weighted average direct servicing cost dropped to $80 per loan in 2004, compared with $91 per loan in 2003. Loan servicing productivity increased to 1,188 loans serviced per employee in 2004 from 1,043 the year before. Indirect costs also improved, with mortgage servicing right amortization and writedowns (net of hedging) averaging $397 per loan, compared with a high of $511 per loan in 2003. The cost-of-servicing study, now in its seventh year, included participation from lenders that service 57% of all home loans, the MBA said. The association can be found online at http://www.mortgagebankers.org.

Classes A, B, and C of notes issued by Sunrise CDO I have been placed on Rating Watch Negative by Fitch Ratings.The action was attributed to deteriorating credit quality that has increased credit risk. The transaction is a collateralized debt obligation supported by asset-backed securities, residential and commercial mortgage-backed securities, CDOs, and corporate debt securities. Fitch can be found online at http://www.fitchratings.com.

Washington Mutual Inc., Seattle, has reported earnings of $844 million ($0.95 per share) for the second quarter, up 73% from $489 million ($0.55 per share) a year earlier.Net income for the home loans business segment (which excludes purchased specialty mortgage finance and Long Beach Mortgage Co.) totaled $209 million in the second quarter, compared with $242 million in the first quarter and a loss of $59 million in the second quarter of 2004, WaMu said. Originations of home loans totaled $44.86 billion for the quarter, up from $38.50 billion in the first quarter but down from $56.22 billion a year earlier. "A year ago we acknowledged our challenges in integrating our mortgage banking acquisitions effectively into our operations and enhancing the risk management of our mortgage servicing asset," said Kerry Killinger, WaMu's chairman and chief executive officer. "I said we would face those challenges head on and build a mortgage team that is one of the industry's best. I am proud to say that we have done exactly that, and after four consecutive quarters of solid performance, our Home Loans Group is now positioned for growth." WaMu can be found online at http://www.wamu.com.

Five classes from three Asset Backed Funding Corp. home equity loan asset-backed certificate transactions have been downgraded by Fitch Ratings.The downgrades were as follows: ABFC series 2001-AQ1, class M-2, from BBB to BB, and class B, from B-minus to C; ABFC series 2002-SB1, class B, from BB to B; and ABFC series 2002-WF1, class M-3, from BBB to BBB-minus, and class B, from BB-plus to B-plus. Fitch attributed the downgrades to monthly losses that have reduced available credit support. In addition, 90-day delinquencies have averaged between 18% and 23% of the current pool balances, the rating agency said. Fitch can be found online at http://www.fitchratings.com.

GMAC Mortgage Corp., Horsham, Pa., has announced that industry veteran Tom Donatacci has returned to the company as senior vice president in its Business Development Group.GMAC Mortgage said Mr. Donatacci will be responsible for all third-party subservicing sales and marketing. In his previous stint with GMAC Mortgage in the late 1990s, Mr. Donatacci was an executive in the company's capital markets operation and helped build its servicing portfolio, the company said. In addition, he was involved in high-profile deals such as the acquisition of the mortgage servicing operations of Wells Fargo Bank. He was most recently the head of the mortgage servicing transactions business at Lehman Brothers/Cohane Rafferty, where "he worked on headline-making industry deals, including the sale of GE Mortgage, Fleet Mortgage, Homeside Lending, and Principal Residential Mortgage," GMAC Mortgage said.

BNP Residential Properties Inc., a real estate investment trust based in Charlotte, N.C., has been listed on the new Russell Microcap Index.The index, which was launched July 1, consists of the stocks of the smallest 2,000 companies in the U.S. equity market. BNP, an apartment REIT, can be found on the Web at http://www.bnp-residential.com.

Wells Fargo & Co., the nation's second-largest mortgage servicer, has reported record net income of $1.91 billion ($1.12 per share) for the second quarter, despite a significant revenue decline at Wells Fargo Home Mortgage related to the impairment of mortgage servicing rights.The profits were up 11% from $1.71 billion ($1.00 per share) a year earlier. Mortgage originations in the community banking segment totaled $85 billion in the second quarter, an increase of $20 billion from the level recorded in the first quarter, but down from $96 billion a year earlier, the company said. But Home Mortgage revenue declined $559 million, or 42%, from that of a year earlier due partly to a $304 million MSR impairment charge, Wells Fargo reported. The company's mortgage servicing portfolio totaled $874 billion of home loans as of June 30, up 17% from that of a year earlier. The MSR asset was valued at $8.5 billion, or $1.12% of loans serviced for others, compared with $8.5 billion and 1.37% as of June 30, 2004, according to Wells Fargo. The San Francisco-based company can be found online at http://www.wellsfargo.com.

Eight classes from three Conseco/Green Tree home equity and home improvement loan deals have been downgraded by Fitch Ratings.The downgrades were as follows: Green Tree Home Equity 1999-D, class B1, from BBB to BB-plus; Conseco Home Improvement 2000-E, class M1, from AA to AA-minus, class M2, from A to BBB-minus, class B1, from BBB to BB, and class B2, from BB to CC; and Conseco Home Equity 2001-D, class M2, from A-minus to BBB, class B1, from BBB-minus to BB-minus, and class B2, from BB-minus to CCC. In addition, Fitch upgraded 52 classes in 22 Conseco/Green Tree transactions and affirmed the ratings on 18 other classes. The downgrades were attributed to concerns about the adequacy of credit enhancement in view of expected losses.