Servicing

Two subordinated tranches from Credit Suisse First Boston Mortgage Securities Corp. series 2002-10 have been placed under review for possible downgrade by Moody's Investors Service.The affected tranches are classes I-M-2 and I-B. Moody's said the bonds' credit enhancement levels, including excess spread, are low for the current rating level in view of projected losses.

Two certificates from CS First Boston Mortgage Securities Corp. series 1997-1R have been placed under review for possible downgrade by Moody's Investors Service.The affected certificates are classes 1-B3 and 1-B4. In addition, classes 1-M1, 1-M2, and 1-M3 were placed under review for possible upgrade. The transaction is a resecuritization backed by other residential mortgage-backed securities. Moody's said the negative rating action was based on the weak performance of the underlying security and reduced credit enhancement relative to projected losses.

Three certificates issued by MESA 2002-1 Global Issuance Co. have been placed under review for possible downgrade by Moody's Investors Service.The certificates, classes M-2, B-1, and B-2, are resecuritizations backed by other residential mortgage-backed securities. The rating action was based on the weak performance of the underlying securities and the reduced level of credit enhancement relative to the projected losses, Moody's said. The rating agency can be found online at http://www.moodys.com.

Origen Financial Inc., Southfield, Mich., has reported a net loss of $5.8 million ($0.23 per share) for the fourth quarter, compared with net income of $2.0 million ($0.13 per share) a year earlier.The real estate investment trust also reported a net loss of $1.8 million ($0.08 per share) for the year, far less than the $22.0 million loss recorded in 2003 by Origen and its predecessor, Dynex Financial. "We believe that our fourth-quarter loss is not indicative of ongoing results of operations, as we made significant charges to income relating to loans originated by our predecessor before our current origination platform was implemented in 2002," said Origen chief executive officer Ronald A. Klein. Origen, a manufactured home loan originator and servicer, can be found online at http://www.origenfinancial.com.

Flagstar Bancorp, Troy, Mich., has announced a $0.04 per share reduction in its fourth-quarter earnings to defer a gain from an interest rate hedging position it had terminated.The change will result in corresponding increases of approximately $0.02 per share in 2005 and 2006, the company said. Flagstar also reported an unrelated adjustment to its retained earnings to correct a cumulative overstatement of interest accrued on its $10.2 billion portfolio of mortgage loans. The latter adjustment will not affect the company's 2004 earnings or its 2005 earnings guidance, the company said. Flagstar can be found online at http://www.flagstar.com.

Bear Stearns & Co. has announced the development of a monthly mortgage performance index aimed at helping investors assess risk when investing in mortgage-backed securities.The Bear Stearns Performance Index features nontraditional metrics such as the cash-flow status of delinquent loans and covers more than 3,000 transactions in the private-label mortgage market. "Borrower defaults have been understated in recent years because record home price increases have resulted in far fewer recorded losses -- the traditional measure of default," said Gyan Sinha, senior managing director and head of Bear Stearns' asset-backed research. "Our deal-level reports also give investors the ability to better estimate the number of borrowers who are going to default from delinquency as opposed to those who are on a successful repayment plan." The company can be found online at http://www.bearstearns.com.

The Senate has passed a consumer bankruptcy bill by a 74-25 vote, clearing the measure -- which addresses some foreclosure issues -- for quick action in the House.The bill is the product of eight years of congressional debates and amendments, according to the American Bankers Association. "The time has come for this fair and balanced bill to become law," ABA executive vice president Edward Yingling said. The 500-page bill (S.256) contains language that prohibits bankruptcy judges from reducing the amount of a debtor's mortgage. This cram-down provision reinforces a Supreme Court decision, but it could become controversial if housing prices start to decline. One provision sought by the Mortgage Bankers Association would remove a $4 million cap on single-asset bankruptcies so that owners of large commercial properties cannot drag out the bankruptcy process and delay foreclosure at the lender's expense. "We are very pleased the Senate has passed this legislation," MBA senior vice president Kurt Pfotenhauer said. President Bush has signaled that he is ready to sign the bankruptcy bill.

Freddie Mac has announced the beginning of a quiet period vis-á-vis the equity investment community in connection with the forthcoming release of its financial results for 2004.The move is in accordance with Freddie Mac's corporate disclosure policy, the government-sponsored enterprise said.

The U.S. CMBS Loan Delinquency Index declined 4 basis points in February to 1.23%, marking the first time in several years that delinquencies in all four major property types fell simultaneously, Fitch Ratings has reported.The rating agency said declines are often the result of resolutions through asset sales of real estate owned properties that result in losses. In the office and multifamily sectors, the amount of new defaults was slightly below the amount of resolved delinquents, Fitch reported, whereas in the industrial and retail sectors the declines resulted largely from the resolution of larger loans. The 16% decline in the dollar balance of industrial loans was largely due to the resolution of two industrial properties in North Carolina, both of which involved selling properties at significant losses. A similar pattern emerged in the retail sector, where Fitch attributed a 7% decline to the sale of several large loans that were REO properties. Hotel delinquencies, which have improved steadily over the past year, rose 3.6%.

Classes A-1 to A-5 of Bombardier Capital Mortgage Securitization Corp.'s manufactured housing series 2000-A have been downgraded from B-minus to CCC by Fitch Ratings.In addition, Fitch affirmed the ratings on 19 classes in six Bombardier MH transactions. The rating agency said the downgrades were due to poor performance of the underlying collateral as well as diminishing credit enhancement. "In the series 2000-A transaction, overcollateralization has been fully depleted, and the high level of losses incurred has resulted in the full writedown of classes M-2, B-1, and B-2," the rating agency said. The collateral consists of manufactured housing installment sales contracts and first-lien mortgage loans on the real estate where the manufactured homes are permanently affixed.