Servicing

Class B of Impac SAC mortgage pass-through certificates, series 2001-6 pool 1, has been downgraded from BB to B by Fitch Ratings.The rating agency also affirmed the ratings on 12 other classes from three Impac transactions. Fitch attributed the downgrade to poor collateral performance and a greater-than-expected deterioration of asset quality.

Eight classes from five securitizations of Credit Suisse First Boston Mortgage Securities Corp. mortgage pass-through certificates have been downgraded by Fitch Ratings,The downgrades were as follows: series 2001-2, classes B-3 and B-4, from BB to B, and class B-5, from B to C; series 2001-9, class B-5, from B to CCC; series 2002-5 G4, class IVB5, from B to CCC, and class IVB6, from CC to C; series 2002-18 G2, class IIB4, from BBB to BB; and series 2002-24 G1, class IB4, from B-minus to CCC. In addition, six classes were upgraded and the ratings on 39 other classes from 10 CSFB issues were affirmed. Fitch said the downgrades reflect declining credit enhancement "relative to consistent or rising monthly losses." The rating agency can be found online at http://www.fitchratings.com.

C-BASS, a firm that specializes in servicing and securitizing credit-sensitive residential mortgages, has hired Peter Cerwin as a managing director in the capital markets group.Mr. Cerwin's responsibilities at C-BASS include working on new business opportunities and executing transactions from a capital markets perspective. He will report to John Draghi, chief investment officer. Mr. Cerwin joins C-BASS after four years as a director in the securitized products group at Deutsche Bank Securities.

HomeBanc Corp. completed a securitization of approximately $980 million of sequential pay notes backed by adjustable-rate, residential first and second mortgages.HMB Acceptance Corp., a HomeBanc subsidiary, retained approximately $7.3 million of class M-5 notes and $5.9 million of class B notes, as well as a certificate representing all the equity in the trust. The company said the trust will be classified as a taxable mortgage pool for federal income tax purposes and as a result a portion of the residual income that is derived from HomeBanc's interest in the trust will be treated as excess inclusion income. The trust includes approximately $985 million of loans originated by HomeBanc's subsidiary, HomeBanc Mortgage Corp, the company said. "Substantially all of the mortgage loans provide for the payment of interest only for a period of up to ten years, and in some cases after an initial fixed rate period of six months of three, five and seven years, based on the six-month [London interbank offered rate] plus a margin," HomeBanc said. Underwriters for the transaction were Bear Stearns & Co. Inc. and KeyBanc Capital Markets.

The rate-indicative 10-year Treasury yield on Wednesday fell to 3.90%, a level thought to be significant in terms of prepayments.A move to 3.90% or lower could result in a "significant increase in refi activity," according to Art Frank, director of mortgage-backed securities research at Nomura Securities International Inc. RBS Greenwich Capital Markets MBS researcher Alec Crawford also said he considers the move into a range below 3.90% to be significant.

The Eleventh Federal Home Loan District Cost of Funds Index for April was 2.515%, up over 11 basis points from March's 2.400%.This continues the measured rate that COFI has increased since it reached rock bottom in May 2004. The rise is just slightly larger than the increase in the index between January and February of this year. Since that point, when COFI was 1.708%, the index has risen a total of 81 basis points. In contrast, the Federal Open Market Committee raised the Federal Funds Rate 25 basis points on June to 1.25%, from the rock-bottom setting of 1.00% in June 2003. Since then, it has increased it seven more times at 25 basis points each and that rate is now 3.00%. COFI is traditionally a lagging indicator, usually moving three-to-six months behind other rates.

Radian Group, a Philadelphia-based mortgage insurer, plans to issue $250 million of 30-year unsecured unsubordinated debt securities, the company said.The debt securities will consist of fixed rate notes, Radian said. The company intends to use approximately $219.3 million of the net proceeds of the offering to redeem, by the end of the third quarter, all of its outstanding 2.25% senior convertible debentures due 2022, with the balance of the net proceeds to be used for general corporate purposes. Banc of America Securities and Bear, Stearns & Co. are the joint book-running managers of the offering.

The good times that the private mortgage insurance companies had in March did not last into April, as both dollar volume of primary new insurance and the number of applications received both declined, according to the Mortgage Insurance Cos. of America.Its most recent data for its members (all private mortgage insurers with the exception of Radian), found that in April, they wrote $16.16 billion of primary new insurance, of which $12.52 billion was traditional and $3.65 billion was bulk. This is down 6% from a revised total for March of $17.18 billion (the original report was $17.15 billion). Applications fell by 14%, from 147,105 in March to 126,596 in April. A sign of how much the business has slowed is that in April 2004, the industry received 181,471applications, the second highest total in that year (behind March 2004). Defaults slightly outweighed cures in April, 35,268 compared with 34,084 respectively, for a cure/default ratio of 96.6%. The trade group can be found on the Internet at http://www.micanews.com.

NovaStar Financial subsidiary NovaStar Mortgage has completed its second securitization of 2005, the company said.Lead managers RBS Greenwich Capital, Wachovia Securities and Deutsche Bank Securities, underwrote the transaction with co-manager Morgan Stanley. The transaction -- NovaStar Mortgage Funding Trust, series 2005-2 -- includes 17 rated classes of certificates with a face value of about $1.78 billion. NovaStar Mortgage retained the class C certificate in the deal, which has a notional amount of $1.8 billion and entitles the company to excess and prepayment penalty fee cash flow from the underlying loan collateral and serves as overcollateralization. The company said class C is subordinated to all other classes. NovaStar can be found on the Web at http://www.novastarmortgage.com.

Twenty-six classes from eight Long Beach home equity and mortgage loan securitizations were recently downgraded by Fitch Ratings, not 23 as the rating agency originally reported.