Servicing

With more borrowers seeking to modify their commercial mortgage backed securities loans in increasingly complicated ways, Fitch Ratings has published a new report explaining its rationale for evaluating these requests.The report is designed to educate borrowers and CMBS servicers about the evaluation process and document needs when Fitch is asked for a rating confirmation. In issuing a confirmation, Fitch confirms that a modification to an existing loan will not affect the ratings of the transaction. The paper covers request issues such as assumptions, defeasance, management changes, and more complicated issues such as tenants-in-common structures.

Moody’s Investors Service has downgraded the financial strength rating of Fannie Mae from "A-" to "B+" with a stable outlook.At the same time, Moody’s affirmed Fannie Mae’s "Aaa" senior unsecured debt rating with a stable outlook and its "Prime-1" rating for short term debt. The bank financial strength rating had been under review for downgrade since Sept. 28 of last year, following a report by the Office of Federal Housing Enterprise Oversight. Fannie Mae’s subordinated debt and preferred stock ratings, at "Aa2" and "Aa3," remain on review for possible downgrade. The rating agency’s website is http://www.moodys.com.

Class B3 of CWMBS (Countrywide Home Loans Inc.) mortgage pass-through certificates series 2001-3 (Alt 2001-2) has been downgraded from B to CCC by Fitch Ratings.The rating agency also removed class B4 of CWMBS series 2003-41 from Rating Watch Negative. In addition, Fitch upgraded four classes and affirmed the ratings on 22 classes in five CWMBS transactions. Fitch attributed the downgrade to losses and high delinquencies relative to decreasing credit support levels. Fitch can be found on the Web at http://www.fitchratings.com.

GE has priced a secondary offering of stock in Genworth Financial, the spinoff that includes GE's mortgage insurance business.A total of 85,000 shares of Genworth class A common stock are being sold in the secondary offering at a price of $26.50 per share. The underwriters do not have an overallotment option. Concurrently, Genworth will repurchase directly from GE approximately 19.4 million shares of Genworth's class B common stock for $500 million. GE, as the selling stockholder, will receive net proceeds of approximately $2.6 billion and after the transactions will own approximately 52% of Genworth's common stock. GE chairman and chief executive Jeff Immelt termed the offering an "important next step in the reduction of our investment in insurance." GE said that, subject to market conditions, it expects to continue reducing its investment over the next two years as Genworth transitions to full independence.

Two mezzanine certificates from Origen Manufactured Housing Contract senior/subordinate asset-backed certificates, series 2001-A, have been downgraded by Moody's Investors Services.The downgrades were as follows: class M-1, from Ba2 to B1, and class M-2, from Caa2 to Ca. Moody's attributed the downgrades to the continued weaker-than-expected performance of the pool and the resulting erosion in credit support.

Three subordinate certificates from two Access Financial manufactured housing securitizations have been downgraded by Moody's Investors Services.The downgrades were as follows: Access Financial Manufactured Housing Contract Trust, series 1995-1, class B-1, from Ba2 to B2; and Access Financial Manufactured Housing Contract Trust, series 1996-1, class A-6, from Aa3 to A1, and class B-1, from Caa2 to Ca. Moody's attributed the downgrades to the continued weaker-than-expected performance of Access Financial's manufactured housing pools. Moody's can be found on the Web at http://www.moodys.com.

Fidelity National Financial, Jacksonville, Fla., has announced the addition of online bidding capabilities to BuyBankHomes.com, FNF's Web portal dedicated to marketing properties that have completed the foreclosure process.The new feature offers interested parties a convenient way to place online bids on foreclosed properties that will be presented at live onsite auctions, the company said. "BuyBankHomes.com's online bidding capabilities enable buyers and investors to be represented at the live auction by proxy, which will result in a one-time bid being submitted on their behalf at the appropriate point in the live auction process," FNF said. The company can be found online at http://www.buybankhomes.com and http://www.fnf.com.

Interactive Mortgage Advisors and Bob Dowell, formerly of Phoenix Analytic Services, have joined forces to form Interactive Mortgage Analytics LLC, Denver.The new entity is offering analytic services to the mortgage industry with an emphasis on the servicing asset. Its services include mark-to-market evaluations, FAS 140 advisory services, purchase or sale analysis, and customized analytic reports, the company said. Mr. Dowell joined Phoenix Capital in 1999 and became involved in the development of its specialized valuation entity, Phoenix Analytic Services. Interactive Mortgage Advisors is a specialized capital markets group that acts as principal in the purchase of whole loans and as an adviser to the mortgage banking industry. It can be found online at http://www.interactivemortgageadvisors.com.

The ratio of upgrades to downgrades on residential mortgage-backed securities was nearly 12 to 1 in 2004, according to Fitch Ratings.The ratio was actually down for the year, owing to a "notable slowdown" in refinancing activity in the second half, but it still contributed strongly to the overall positive upgrade/downgrade ratio of 2.36 to 1 for all structured finance transactions, the rating agency reported in a new study of structured deal ratings for last year and since 1991. The ratio stood at 1.95 to 1 in 2003. In contrast to the somewhat lower ratio of upgrades to downgrades for RMBS last year, upgrades were "up significantly across all the other major structured finance sectors, including asset-backed securities (upgrades doubled relative to 2003), commercial mortgage-backed securities (up 26%), and collateralized debt obligations (up 70%)," Fitch reported. The rating agency can be found online at http://www.fitchratings.com.

Citigroup has announced an agreement to sell its $1.4 billion manufactured housing loan portfolio to 21st Mortgage Corp., a manufactured housing lender based in Knoxville, Tenn.The terms of the transaction were not disclosed. Citigroup said the cumulative effect of the sale would be an after-tax loss of approximately $120 million in the first quarter. The companies can be found online at http://www.citigroup.com and https://www.21stmortgage.com.