Servicing

Standard & Poor's Ratings Services has announced that it will rate structured finance transactions that include South Carolina loans governed by the state's predatory lending law, which took effect Jan. 1.S&P said the South Carolina High-Cost and Consumer Home Loans Act bars certain practices in connection with what it defines as "consumer home loans" and "high-cost home loans." Violations could result in liability for the originators of such loans, but the act does not explicitly impose liability on purchasers or assignees of either type of loan, S&P said. However, if a court finds that such a loan violated the act at the time it was made, the court may refuse to enforce the loan or part of the loan, rewrite or modify the loan, or award monetary damages, S&P said. For deals that include South Carolina loans, S&P will require the issuer to warrant that the loans comply with all applicable laws, and that its compliance procedures can effectively identify consumer home loans and high-cost home loans and determine that they don't violate the aforementioned act. S&P can be found online at http://www.standardandpoors.com.

Mortgage lenders reduced their payrolls by 7,500 full-time employees in November, reflecting the sharp dropoff in refinancings that started in September.The Bureau of Labor Statistics data released Friday show that employment in the mortgage banker/broker sector fell from 417,100 in October to 409,600 in November. The mortgage sector has been shedding jobs for three consecutive months. Meanwhile, the December jobs report disappointed many who expected to see a real boost in hiring. The BLS reported that only 1,000 new jobs were created in December, but the unemployment rate fell to 5.7%. (The December employment report provided mortgage sector employment data for November only. The BLS instituted this one-month lag when it revamped its jobs report in May.) The BLS can be found online at http://stats.bls.gov.

Nomura Securities International Inc. has appointed Don MacKinnon head of structured credit trading and asset finance, a new position at the company that includes responsibility for its residential and commercial mortgage-backed securities businesses.Mr. MacKinnon was previously president and chief executive officer of Real Business Solutions, a commercial real estate services and technology company. In addition to overseeing RMBS and CMBS, Mr. MacKinnon will be responsible for managing the firm's asset finance business. Mr. MacKinnon has a mandate to expand the company's U.S. operations in all three businesses.

Prepayment rates of Fannie Mae and Freddie Mac mortgage-backed securities were mixed in the December reporting period, and changes were generally small on a percentage basis, according to the Bear Stearns Prepayment CommentaryAnalysts Dale Westhoff and Bruce Kramer said nearly all changes were under 10% in 30-year coupons of 6.5% and above. "The most interesting results were in the cusp coupons (5.0% and 5.5%), where several trends in the current housing market converged to bring the only notable surprises in the December report," the analysts said. "The [Fannie Mae] 5.5%/2003 cohort, which is by far the largest single piece of the coupon stack at $268 billion outstanding, rose from 8.8 CPR in November to 10.6 CPR in December." The analysts said conventional speeds overall "remain slightly higher" than expected for several reasons, including record housing turnover and high levels of refinanced loans in pools. Bear Stearns can be found online at http://www.bearstearns.com.

Craig S. Davis, a former president of Washington Mutual's home loans and insurance services group, has joined the board of directors of Ellie Mae.Mr. Davis, who has more than 25 years of senior management experience in the mortgage and financial services industry, served as WaMu's mortgage chief for seven years. He retired suddenly from the Seattle-based thrift last fall in the wake of a disclosure that it would book a loss in the third quarter related to mortgage loan sales because of problems in tracking loan commitments. Sig Anderman, Ellie Mae's chairman and chief executive officer, praised Mr. Davis's leadership at WaMu and predicted that his perspective "will be invaluable as we enter our critical next phase in leveraging state-of-the-art technology for mortgage brokers, lenders, and service providers." Ellie Mae can be found online at http://www.elliemae.com.

Peter R. Fisher, a former undersecretary for domestic finance at the U.S. Treasury, has joined investment management firm BlackRock Inc. as a managing director.Mr. Fisher was previously active in mortgage and government-sponsored enterprise issues while working for the Treasury Department. He left that post in early October. Before joining the Treasury, he was an official with the New York Federal Reserve Bank. BlackRock, which manages assets on behalf of institutional and individual investors worldwide, is majority-owned by The PNC Financial Services Group Inc. and by BlackRock employees. It can be found online at http://www.blackrock.com.

Countrywide Financial Corp., Calabasas, Calif., has announced that its long-time independent auditor, Grant Thornton LLP, has been replaced by KPMG LLP, but that the move was not based on any dispute with Grant Thornton over accounting principles or practices.Countrywide praised Grant Thornton, which has been the company's independent auditor since the early 1970s, adding that the company would complete Countrywide's 2003 audit. The appointment of KPMG was made by the Audit and Ethics Committee of Countrywide's board of directors based on a comprehensive review of audit firms that began in mid-2003, the company said.

The issuance of U.S. private-label residential mortgage-backed securities will most likely decline by 30% in 2004, a percentage "far less" than the decrease projected for new residential mortgage volumes this year, Standard & Poor's has reported.RMBS issuance will most likely fall to $400 billion this year from the record-breaking $575 billion in 2003, the rating agency said. S&P can be found online at http://www.standardandpoors.com.

American Business Financial Services Inc., Philadelphia, has announced the extension of an investment note exchange offer through Feb. 6 due to the response to the offer and the processing volume experienced over the holiday season.ABFS said $74.6 million of the investment notes were exchanged for $35.3 million of senior collateralized subordinated notes and 39.3 million shares of series A convertible preferred stock through Dec. 31. The offer, as extended, allows eligible noteholders to exchange the principal amount of their investment note in increments of $1,000 for equal amounts of: a senior collateralized note with the same maturity date and an interest rate of 10 basis points higher than their existing note; or shares of series A preferred stock with a liquidation value of $1 per share, with an option to convert the shares into common stock beginning 24 months after the issuance date. The company can be found online at http://www.abfsonline.com.

Countrywide Financial Corp., Calabasas, Calif., has announced the promotion of Stanford L. Kurland to the position of CFC president.Mr. Kurland, who will retain the title of chief operating officer of CFC, had been serving as executive managing director of CFC and president of its subsidiary Countrywide Home Loans. David Sambol has been named president and chief operating officer of CHL. He will continue as executive managing director of mortgage banking and capital markets for CFC. In his role as president of CFC, Mr. Kurland will lead the development and execution of the company's strategic plans and will direct all corporate and subsidiary operations. He will also oversee the company's asset/liability and investment, hedging, and interest rate risk-management activities. Mr. Sambol is now responsible for Countrywide's domestic and international mortgage lending and servicing activities.