Servicing

Eleven classes from three GreenPoint Credit Manufactured Housing Trusts have been downgraded by Fitch Ratings.The downgrades were as follows: series 1999-5, classes M-1A and M-1B, from AA-minus to A-minus, and class M-2, from BBB to BB-minus; series 2000-1, class A-3, from AA to A, classes A-4 and A-5, from A-plus to BBB, class M-1, from BBB-minus to BB-minus, and class M-2, from CCC to C; and series 2000-3, class I A, from A-minus to BBB-minus, class I M-1, from BB-plus to B, and class I M-2, from CCC to CC. In addition, Fitch affirmed the ratings on six classes from four Greenpoint MH deals. The rating agency attributed the downgrades to greater-than-expected losses. The loans are serviced by GreenPoint Credit, a subsidiary of GreenPoint Financial Corp. GreenPoint exited the manufactured housing lending business in early 2002, but has continued to service its loan portfolio. Fitch can be found online at http://www.fitchratings.com.

Four classes of CS First Boston mortgage-backed securities, series 2001-2, have been downgraded by Fitch Ratings.The downgrades were as follows: classes B-3 and B-4, from BBB to BB; class B-5, from BB to B; and class B-6, from B to C. In addition, the ratings on three classes in the deal were affirmed. Fitch attributed the downgrades to realized and expected losses. The 0.15% original credit support provided by the unoffered class B-7 certificate has been depleted, the rating agency said.

Prepayment rates for Fannie Mae and Freddie Mac mortgage-backed securities recorded "very modest gains" in August despite the fact that mortgage rates were about 25 basis points lower than in the previous month, according to Bear Stearns.Analyst Dale Westhoff said the speed gains were generally less than 10%, with the bigger percentage increases concentrated in the 5.0%-6.0% coupons. "Above the 6.0% coupon prepayment increases were even more muted, with most increases less than 5%," Mr. Westhoff said. He said the speeds for the August reporting period were slightly below the Bear Stearns projections, and that "most of the incremental refinancing produced by the 50 basis point drop in 30-year mortgage rates in July and August to 5.80% is expected to flow through to the September numbers." Mr. Westhoff cited recent lows in the 10-year Treasury note yield, which he said "narrowly missed reaching our first key rate threshold" of 4.0%. A 10-year Treasury yield below 4.0% would correspond to a 5.60% mortgage rate, he said, and would expose the 5.5% coupon (35% of the mortgage market) to refinancing pressure. Bear Stearns can be found online at http://www.bearstearns.com.

Officials have proposed to delay implementation of controversial proposed accounting guidance for interest-rate-impaired securities, according to the webcast of a Financial Accounting Standards Board meeting held Sept. 8.A number of mortgage and bond market participants had been concerned about certain aspects of the guidance and said they saw the delay as a relatively favorable development. "We believe this is an appropriate interim result that is consistent with recommendations we and other financial industry organizations submitted … and think it will avoid unnecessary dislocations throughout the debt markets that might have resulted from more immediate application of these provisions," said The Bond Market Association in a statement released in conjunction with its affiliates, the Asset Managers Forum and the American Securitization Forum. The Financial Accounting Standards Board can be found online at http://www.fasb.org, and The Bond Market Association can be found at http://www.bondmarkets.com.

Fidelity National Financial, Jacksonville, Fla., has delayed the spinoff of its servicing technology unit and is cautioning that the IPO may never happen.In a statement released Thursday, FNF management blamed the delayed spinoff/initial public offering on a "relatively weak and unpredictable" equities market. It also cited its just-announced $400 million acquisition of a bank technology firm as a reason for the delay. Meanwhile, a source familiar with the company told MortgageWire that a top-20 residential servicer that uses the unit -- Fidelity National Information Services -- as its mortgage service bureau is contemplating switching systems and using Fiserv. (See the Sept. 13 issue of National Mortgage News for more details.) Officials at both Fiserv and FNIF declined to comment. FNF bought FNIF (then called Alltel Information Systems) for $1 billion back in January 2003.

Fourteen classes of senior, mezzanine, and subordinate certificates in two Origen manufactured housing securitizations have been downgraded by Moody's Investors Service.In series 2001-A, the downgrades were as follows: classes A-4 to A-7, from Aaa to A2; class M-1, from Aa2 to Ba2; class M-2, from A2 to Caa2; and class B, from Baa2 to C. In series 2002-A, the downgrades were as follows: classes A-1 to A-4, from Aaa to Aa2; class M-1, from Aa2 to A3; class M-2, from A2 to Ba3; and class B-1, from Baa2 to Caa3. The downgrades were attributed to weaker-than-expected performance by the pools. Delinquencies and repossessions have exceeded original expectations, leading to higher-than-expected cumulative losses, Moody's said. The rating agency can be found online at http://www.moodys.com.

Charles Schwab Bank, San Francisco, has announced that it has made its home equity line of credit disaster relief program available to assist families and individuals affected by Hurricane Frances.The relief program offers up to $25,000 as a new HELOC or as an increase to an existing one, the company said. The HELOC is available on a primary or a secondary residence, including residences that have sustained storm damage that would normally disqualify the property for such a credit line, Charles Schwab said. The same program is being offered to victims of Hurricane Charley. The company can be found on the Web at http://www.schwab.com.

The home loan delinquency rate increased modestly in the second quarter but remained lower than it had been a year earlier, according to the Mortgage Bankers Association's National Delinquency Survey.Nationally, 4.43% of home loans were at least 30 days past due at the end of the second quarter, up 10 basis points from the first quarter, according to the MBA. But the seasonally adjusted delinquency rate was down 54 bps from that of the second quarter of 2003. The inventory of loans in foreclosure fell in the second quarter to 1.16%, down 11 bps from the inventory in the first quarter and down 19 bps from that of a year earlier. MBA chief economist Douglas Duncan said the second-quarter increase in the overall delinquency rate is probably an aberration. "Based on the continued expansion of the economy and strong home-price growth in many regions, it is unlikely this small upward blip represents a reversal of the downward trend in delinquencies we have seen since the middle of 2001," he said.

Five classes from two securitizations of Merit Securities Corp. manufactured housing contracts have been downgraded by Fitch Ratings.The downgrades were as follows: series 13, class M-1, from BBB-plus to BBB-minus, class M-2, from BB-plus to B, and class B-1, from B-plus to C; and series 12-1, class M-2, from BBB-minus to BB-minus, and class B-1, from BB-minus to CCC. In addition, the ratings on four other classes in the two deals were affirmed. The downgrades were attributed to the poor performance of the collateral pools. About $10.1 million in overcollateralization remains for the series 12-1 classes, and "there is very little monthly excess spread to help cover losses," the rating agency said. For series 13, overcollateralization was exhausted in November 2003, and there is no monthly excess spread. "The manufactured housing industry is experiencing its worst downturn ever," Fitch said. "Relaxed credit standards, overbuilding by manufacturers, and the difficulties relating to servicing this unique asset have all contributed to poor performance of MH securities."

Nine classes from two Deutsche Financial Capital manufactured housing transactions have been downgraded by Fitch Ratings.The downgrades were as follows: series 1997-I, class M, from A-minus to BBB, and class B-1, from CC to C; and series 1998-I, classes A-2 to A-7, from AA-minus to A, and class M, from BB-minus to B-minus. In addition, the ratings on four classes were affirmed. DFC was a joint venture of Deutsche Financial Services Corp. and Oakwood Acceptance Corp., a subsidiary of Oakwood Homes Corp. Collateral consists of fixed-rate manufactured housing contracts secured by new and used manufactured homes serviced by OAC. Fitch attributed the downgrades to the fact that overcollateralization was fully depleted in both transactions more than two years ago. "As a result, subordinate classes of certificates have been directly absorbing losses generated within the collateral pool and in certain cases have been fully written down," the rating agency said. Oakwood Homes filed for Chapter 11 bankruptcy protection on Nov. 15, 2002, and announced late last year that substantially all of its assets would be acquired by Clayton Homes Inc., a subsidiary of Berkshire Hathaway. Fitch can be found online at http://www.fitchratings.com.