Servicing

The risk that mortgages of nonprime credit quality will go into default remained steady in the winter of this year, according to University Financial Associates.The UFA's Nonprime Mortgage Report for Winter 2004 registered a reading of 99, down one point from 100 the previous quarter. A reading of 100 means the risk of default on newly originated nonprime loans is equal to the average risk of default for loans originated during the 1990s. A lower reading indicates a lower risk level. UFA said the index has risen by 10% since 2001 but remains moderate by historical standards.

Jill Spencer has been promoted to executive vice president and chief operating officer of the Federal Home Loan Bank of Atlanta.Ms. Spencer, who was formerly EVP and general counsel, will oversee the FHLBank's administrative services, community investment services, corporate communications, credit and collateral, government relations, human resources, legal services, and strategic planning functions. The FHLBank also announced several other appointments. Greg Mayfield, formerly vice president of legal services, has been named senior vice president and general counsel and Charles Abbitt has joined the bank as chief credit officer. Cathy Adams has been promoted from group vice president for human resources and administrative services to senior vice president.

A predicted surge in foreclosures in the Chicago metropolitan area has begun, according to Foreclosures.com, a distressed property investment advisory firm based in Fair Oaks, Calif.New foreclosure filings jumped to 433 in Cook County in the first week of February, a level 30% higher than the weekly average of 334 new cases for all of 2003, the firm reported. "Late last year, we were advised to expect a sudden upsurge in mortgage defaults in early 2004," said Alexis McGee, president of Foreclosures.com. "That's happening now." Among the economists predicting the surge was Diane Swonk, chief economist at Bank One in Chicago. Foreclosures.com can be found on the Web at http://www.foreclosures.com.

Class B1 of GE Capital home equity loan pass-through certificates, series 1997-HE2, has been downgraded from CCC to C by Fitch Ratings.Fitch also placed two classes from other transactions on Rating Watch Negative, affirmed the ratings on 26 other classes in six deals, and placed two of those 26 classes on Rating Watch Negative. The classes placed on Rating Watch Negative were class B2 of series 1999-HE1 and class B3 of series 1999-HE3. Those removed from Rating Watch Negative were the M classes of series 1996-HE4 and series 1997-HE3. Fitch attributed the negative rating actions to loss levels and high delinquencies relative to the applicable credit support. Fitch can be found online at http://www.fitchratings.com.

The California Mortgage Bankers Association has announced that a member company, Alliant Information Services Inc., Fullerton, Calif., has developed two new products to help solve problems caused by property taxes and assessment liens.The Alliant Tax Bill Estimation report uses the same methodology used by counties to forecast supplemental and future secured tax bills based on the purchase price and expected closing date, the CMBA said. The other new product, Priority Lien Check, determines whether a property is subject to an accelerated foreclosure lien imposed by land-secured financing, the association said. Alliant's research director, Jeanne Klimowski, said the products help minimize risk by letting the parties know the state's property tax requirements up front. "California's complex property taxes have long been a problematic part of real estate transactions in this state," she said. "Property taxes can change dramatically after transfer, especially given the strong real estate market of the past several years." The association can be found online at http://www.cmba.com, and Alliant can be found at http://www.alliantinfo.com.

Class B of Bear Stearns Global Issuance series 2001-A, a resecuritization of the class B certificate from Bear Stearns Asset Home Loan Owner Trust series 2001-A, has been downgraded from BB to CCC by Fitch Ratings.The underlying trust is collateralized by subordinate-lien loans with high loan-to-value ratios that were originated by Conseco Finance Corp. and are serviced by Conseco. The rating agency attributed the downgrade to the depletion of overcollateralization and a reduction in the excess spread of the underlying trust's mortgage pool due to poor loan performance.

Fred Miller Jr., president and chief executive officer of the Bank of Anguilla (Miss.), has been elected chair of the board of directors of the Federal Home Loan Bank of Dallas.The FHLBank also announced the election of Pat Brister, a councilwoman for St. Tammany Parish in Mandeville, La., as vice chair. Mr. Miller, who joined the board in 1997, succeeds Henry Flores, whose term expired Dec. 31. Mr. Miller has been president of the Bank of Anguilla since 1986, and he is a past president of the Mississippi Bankers Association. Ms. Brister was named to the board in 2002 as a public-interest director. Until recently, she and her husband operated a company in Mandeville for more than 30 years, the FHLBank said. The Dallas FHLBank can be found online at http://www.fhlb.com.

Thornburg Mortgage Inc., Santa Fe, N.M., has priced an offering of 3.5 million shares of common stock at $29 per share.Net proceeds from the transaction, which are estimated at $96.3 million, will be used mainly to fund loans originated by the company and to buy adjustable-rate mortgage securities, Thornburg said. A.G. Edwards & Sons acted as the book-running lead manager for the transaction. The underwriters have been granted a 30-day option to buy up to 525,000 additional shares of common stock to cover any overallotments. Thornburg can be found online at http://www.thornburg.com.

Twenty-six single-family mortgage servicers have been honored by Freddie Mac for achieving its Tier One performance rankings, the government-sponsored enterprise has announced.The designation was given to servicers whose management of performing and nonperforming loans was deemed superior for two or more quarters in 2003. Tier One status brings with it fee waivers, financial rewards, and national recognition, Freddie Mac said. The government-sponsored enterprise ranks servicers in four tiers based on their investor reporting and default management. In addition to designating the Tier One servicers for 2003, Freddie Mac also inducted eight of the 26 servicers into its Tier One Hall of Fame for achieving Tier One status four years in a row. They are: Alliance Mortgage Co.; Bank of America Mortgage; Chevy Chase Bank FSB; Countrywide Home Loans Inc.; First Horizon Home Loan Corp.; HSBC Mortgage Corp. (USA); National City Mortgage Co.; and Wells Fargo Home Mortgage Inc.

The First American Corp., Santa Ana, Calif., has announced the signing of a letter of intent to acquire SNK Holdings Inc., a provider of mortgage default services, and its subsidiaries, including LOGS Financial Services.First American said it will combine the Northbrook, Ill.-based SNK with its Mortgage Information Group's National Default Outsourcing operations, creating a new company, First American National Default Outsourcing, to be based in Lewisville, Texas. First American will manage and direct outsourcing activities from regional offices in Milwaukee, Northbrook, and Jacksonville, Fla. "The addition of LOGS' servicing platform gives us greater capacity to support clients, and complements our recent acquisition of default claims management specialist Baker, Brinkley & Pierce," said James C. Frappier, president of First American Default Management Solutions. Regarding the acquisition of BB&P on Jan. 6, Mr. Frappier said it is "the only company in the industry that has proven itself capable of handling large volumes of claims efficiently, cost effectively, and with the turn time that our customers require." First American can be found online at http://www.firstam.com.