Servicing

Overall prepayment rates on 30-year Fannie Mae and Freddie Mac mortgage-backed securities increased "modestly" in November, apparently as a result of an uptick in refinancing, according to Bear Stearns.The aggregate constant prepayment rate for Fannie Mae 30-year MBS was 21.6 CPR for November, up from 20.5 CPR in October, according to Bear Stearns analyst Dale Westhoff. "The increase was uniformly distributed across the meat of the coupon stack (5s through 6.5s) with no one coupon driving the movement in aggregate prepayments," Mr. Westhoff reported. He noted that there had been a 6-basis-point decline in mortgage rates from October to November, and a 4.5% increase in application activity as measured by the Mortgage Bankers Association. Freddie Mac 30-year MBS continued to prepay slower than Fannie Maes in November "across virtually all coupons and vintages," Mr. Westhoff said. Meanwhile, the overall speed gap between Ginnie Maes and conventional MBS was little changed in November, holding at just above 7 CPR for 30-year collateral versus Fannie Maes, according to Mr. Westhoff. Bear Stearns can be found online at http://www.bearstearns.com.

Vanderbilt Mortgage and Finance Inc., Knoxville, Tenn., and JPMorgan Chase & Co., Chicago, have announced an agreement whereby Vanderbilt will purchase Chase Home Finance's $4 billion manufactured housing loan portfolio.The terms of the agreement were not disclosed. The companies said the portfolio will be serviced by Vanderbilt and 21st Mortgage Corp. in Knoxville. Vanderbilt Mortgage is a subsidiary of Clayton Homes Inc., a manufactured housing company that is wholly owned by Berkshire Hathaway.

Four classes of notes issued by Varick Structured Asset Fund Ltd. have been downgraded by Fitch Ratings.The downgrades were as follows: classes A-1 and A-2, from BBB-minus to BB; and classes B-1 and B-2, from CCC-minus to CC. The transaction, a collateralized debt obligation managed by Clinton Group Inc., is supported by a diversified portfolio of asset-backed securities, residential mortgage-backed securities, and commercial MBS. Fitch attributed the downgrades to continued deterioration of the collateral and the adverse effects of its interest rate hedge. As of Oct. 28, defaulted assets represented 5.3% of the collateral and eligible investments, the rating agency said. Fitch can be found online at http://www.fitchratings.com.

Four classes of Impac Secured Assets Corp. mortgage pass-through certificates, issued by Impac Funding Corp., have been downgraded by Fitch Ratings.The downgrades were as follows: series 2000-1, class B-1, from B to CCC, and class B-2, from CC to C; series 2000-3, class M-3, from CCC to C; and series 2001-6 pool 1, class B, from BBB to BB. In addition, Fitch upgraded 28 classes from 15 Impac securitizations and affirmed the ratings on 66 classes from 24 Impac deals. The rating agency attributed the downgrades to poor collateral performance and the deterioration of asset quality beyond original expectations. Fitch can be found online at http://www.fitchratings.com.

Employment in the mortgage industry reached all-time highs in October as lenders added 6,200 full-time employees to their payrolls, according to the U.S. Bureau of Labor Statistics.The BLS November employment report indicates that jobs in the mortgage banking/broker sector rose from 459,300 in September to 465,500 in October. (There is a one-month lag in BLS reporting of mortgage-sector employment data. The November data will not be released until Jan. 7.) The additional hiring comes at a time when originations are falling. Loan volume dropped 19% from the second quarter to $663.0 billion in the third quarter, according to the Quarterly Data Report, which is published by National Mortgage News. Meanwhile, BLS economists said job growth "continued in the mortgage-related industries" in November.

Class B-4 of Salomon Brothers Mortgage Securities VII Inc. mortgage pass-through certificates, series 1997-HUD1, has been downgraded from CCC to CC by Fitch Ratings.In addition, Fitch upgraded 26 classes from 12 Salomon deals and affirmed the ratings on 43 classes in 17 securitizations. The downgrade was attributed to decreased credit enhancement available to offset "potential losses from the increasing delinquency pipeline." As of the October distribution, nearly 19% of the remaining mortgage loans were nonperforming, the rating agency said. Fitch can be found on the Web at http://www.fitchratings.com.

NoteWorld Servicing Center, a servicer of seller-financed mortgages based in Tacoma, Wash., has announced a partnership with First American Title, Santa Ana, Calif., to provide specialized account servicing to First American's seller-carryback customers.Under the arrangement, NoteWorld said it will act as First American's exclusive accounting servicing division for buyers and sellers using seller-carrybacks to fund their property purchases. (A seller-carryback transaction, also known as seller financing, is one in which the seller acts as a full or partial lender and carries a loan on the property. If there is no third-party servicer, the buyer makes payments directly to the seller.) NoteWorld said the partnership will enable First American to offer online account information, pay-by-phone and pay-by-Web options, tax and insurance impounding, and "superior" customer service. The companies can be found online at http://www.noteworld.com and http://www.firstam.com.

Ocwen Federal Bank FSB, West Palm Beach, Fla., has filed an application with its regulator to turn in its federal thrift charter, a move that would prevent it from taking deposits in the U.S.Ocwen Federal, a subsidiary of Ocwen Financial, is the nation's ninth-largest servicer of subprime loans, but is currently operating under a supervisory agreement that, among other things, has the effect of limiting its growth. Even though the parent is headquartered in Florida, the thrift has but one bank branch -- located in Ft. Lee, N.J. The branch issues retail certificates of deposit that "currently serve as a source of financing for us," according to a filing with the Securities and Exchange Commission. A few months back Ocwen said it was considering "debanking," and it finally filed an application to do so during the week of Nov. 22. At MortgageWire's deadline, OTS officials and Ocwen chief executive Bill Erby could not be reached for comment. In the third quarter Ocwen Financial earned $39.3 million, but most of the profit was due to what the company called a "partial reversal of the deferred tax asset valuation allowance."

American Home Mortgage Investment Corp., a real estate investment trust based in Melville, N.Y., has announced a public offering of 2 million shares of series B cumulative redeemable preferred stock.The underwriters have been granted an option to buy up to 300,000 additional shares to cover any overallotments, the mortgage REIT said. The lead manager of the offering is Friedman, Billings, Ramsey & Co. American Home can be found on the Web at http://www.americanhm.com.

Twenty-four classes from 34 Conseco/Green Tree home equity and home improvement securitizations have been downgraded by Fitch Ratings, and 54 classes have been removed from Rating Watch Negative.In addition, Fitch upgraded 36 classes and affirmed the ratings on 55 classes from the deals. The downgrades were attributed to "concerns regarding adequacy of remaining credit enhancement in light of nonperforming assets and expected losses." Fitch said a majority of the downgrades involve the assignment of a C rating to the most subordinate class of outstanding certificates in the series because limited guarantees by Conseco Finance Corp. no longer secure the classes. "As a result, losses are now having a direct impact on the downgraded certificates," the rating agency said. Fitch noted that it had previously placed a number of classes on Rating Watch Negative due to concerns about Conseco's financial strength (the company filed for bankruptcy about two years ago) and a lack of information on servicing practices. Their removal from the watchlist followed Fitch's review of modification servicing techniques and its observation of collateral performance, the rating agency said. Fitch can be found online at http://www.fitchratings.com.