Servicing

The Federal Agricultural Mortgage Corp., Washington, has reported net income of $28.2 million ($2.32 per share) for 2004, compared with $25.0 million ($2.08 per share) for 2003.For the fourth quarter, Farmer Mac's net income totaled $9.8 million ($0.82 per share), compared with $4.9 million ($0.40 per share) in the fourth quarter of 2003. Henry D. Edelman, Farmer Mac's president and chief executive officer, said 90-day delinquencies in the company's portfolio remained at low levels as of Dec. 31, totaling $25.3 million, or 0.55% of the portfolio.

IndyMac Bancorp Inc., Pasadena, Calif., the holding company for IndyMac Bank, has reported record pro forma net earnings of $211.3 million ($3.40 per share) for 2004, compared with $171.3 million ($3.01 per share) in 2003.Mortgage loan production totaled a record $37.9 billion, up 30% from the volume recorded the year before, IndyMac said. (The company said the pro forma earnings, related to SEC Staff Accountability Bulletin No. 105 and adjustments related to IndyMac's acquisition of Financial Freedom Holdings, were reported to provide comparability to historical performance figures.) For the fourth quarter, the company reported pro forma net earnings of $58.4 million ($0.91 per share), compared with $43.3 million ($0.75 per share) in the fourth quarter of 2003. Mortgage loan production totaled a record $11.2 billion, up 79% from that of a year earlier. "While industry volumes declined 26% in 2004 from 2003 levels, we grew our mortgage volumes 30%, and as a result, we achieved 74% growth in market share for the full year, to 1.34%," said Michael W. Perry, IndyMac's chief executive officer. The company can be found online at http://www.indymacbank.com.

Classes C-1 and C-2 of Putnam Structured Products CDO 2001-1 Ltd. have been downgraded from BBB to BB-plus by Fitch Ratings.The rating agency also affirmed the ratings on five other classes in the transaction. Fitch said Putnam 2001-1 is a collateralized debt obligation, managed by Putnam Advisory Co., that closed Nov. 30, 2001. The portfolio backing the CDO consists of residential and commercial mortgage-backed securities, real estate investment trusts, consumer and commercial asset-backed securities, and other CDOs. The downgrades stem from increased pressure on excess spread caused by the current interest rate environment, Fitch said. "Consequently, the terms of the interest rate swap, which were negotiated at closing, have created an excessive cash outflow on the transaction," the rating agency said. Fitch can be found online at http://www.fitchratings.com.

The Mortgage Bankers Association -- which has yet to take a position on the whether Fannie Mae and Freddie Mac should slash their servicing fees -- will host a meeting on the issue Feb. 3 in Washington.At least 30 mortgage officials, including representatives from the two government-sponsored enterprises, are expected to attend the meeting, said Steve O'Conner, the MBA's vice president of government affairs. Neither Fannie nor Freddie have cut their minimum servicing fee, currently set at 25 basis points, but both are considering it. Mr. O'Conner noted that GSE officials will attend only part of the meeting, which will be a forum for both small and large mortgage bankers. "We want to get a number of perspectives on the issue, from firms both large and small," he said. (See the Jan. 24 issue of NMN and the forthcoming Jan. 31 issue for more details on the story.)

Unizan Financial Corp., Canton, Ohio, has announced that it will record an after-tax impairment charge of $2.2 million ($0.10 per share) for the fourth quarter related to Fannie Mae and Freddie Mac preferred stock in its available-for-sale securities portfolio.The company said the decline in the value of the perpetual preferred securities was previously recorded as an unrealized mark-to-market loss on securities available for sale and was reflected in a reduction to equity through other comprehensive income. "Accordingly, the reclassification of the unrealized after-tax loss to an other-than-temporary impairment noncash charge will not affect total shareholders' equity," the company said. Unizan Financial, the holding company for Unizan Bank NA, can be found online at http://www.unizan.com.

Two classes from DLJ Mortgage Acceptance Corp. mortgage pass-through certificate series 1994-3 have been downgraded by Fitch Ratings.The downgrades were as follows: class B2, from A to BBB-plus; and class B-3, from BB to B. In addition, three classes in another DLJ deal were upgraded and the ratings on 12 classes in four DLJ deals were affirmed. The rating agency attributed the downgrades to higher-than-expected levels of serious delinquencies (90 days or more).

The growing popularity of interest-only home loans in the subprime mortgage market "may trap unwary New York metro area homebuyers into situations from which the only exit is default and foreclosure," according to Foreclosures.com, a Sacramento, Calif.-based investment advisory firm.Alexis McGee, president of Foreclosures.com, said homebuyers who take out such loans can find themselves with homes they can't afford when the loans convert to what she called "real world" mortgages. "These loans are very seductive," Ms. McGee said. "They offer below-market interest rates for two or three or five years, with no reduction of principal, and then convert automatically into fully amortized loans for the balance of the 30-year term."

Robin Grieves has been named to head Freddie Mac's Market Risk Oversight department.Mr. Grieves will be responsible for, among other things, measuring interest rate risk; creating risk management reporting and management controls; and monitoring compliance with internal risk management policies and procedures. He taught portfolio management and financial engineering to graduate students at Thunderbird, The Garvin School of International Management in Arizona. Mr. Grieves was also director of fixed-income research and government bond strategist at HSBC Securities and vice president for government bond strategies at Salomon Brothers. He also worked previously at Freddie Mac, from 1987 to 1992, as a director in the company's financial research department. Freddie Mac can be found online at http://www.freddiemac.com.

Two classes from Amresco's series 1997-3 mortgage-backed securities issue have been downgraded by Fitch Ratings.Class M-2F of Amresco series 1997-3, group 1, was downgraded from A to BBB, and class B-1F was downgraded from BB to C and removed from Rating Watch Negative. In addition, Fitch upgraded two classes and affirmed the ratings on 27 classes from various Amresco issues. The rating agency said the downgrades are due to mounting collateral losses that have depleted credit enhancement. Fitch can be found online at http://www.fitchratings.com.

The New York Federal Home Loan Bank has rebuilt its retained earnings and will resume paying normal dividends this year, according to the bank's president, Alfred DelliBovi.The FHLBank has reached its retained earnings target of $196.5 million with the payout of a 3.05% dividend for the fourth quarter. "With adequate retained earnings now accumulated, we anticipate paying out higher dividends the remainder of 2005," Mr. DelliBovi says in a letter to stockholders. In the third quarter of 2003, the New York bank took a $183.0 million loss on the sale of credit-impaired manufactured housing securities and did not pay a dividend. The FHLBank paid an average dividend of 1.83% over the next four quarters.