Servicing

Fitch Ratings has announced the addition of transactions involving specialty products to its RMBS Deal Tracker, a Web-based product that identifies original collateral attributes for Fitch-rated residential mortgage-backed securities and mortgage-related asset-backed securities.The specialty-product version of the downloadable Excel-based spreadsheet will consist initially of scratch-and-dent and mixed-asset pools, but more specialty asset types will be added as data become available, Fitch said. RMBS Deal Tracker is now available for Fitch-rated subprime, manufactured housing, prime jumbo A, select alternative-A, and specialty deals, the rating agency said. Data points provided by the product include average balance, loan-to-value and FICO distributions, property type, occupancy type, documentation type, geographic distribution, and credit enhancement levels. Fitch can be found online at http://www.fitchratings.com.

Fidelity National Financial Inc., Irvine, Calif., has announced that property owners who have suffered damage from wildfires in Southern California will be offered title insurance fee reductions of up to 50% for post-disaster reconstruction loans.FNF said the reduced disaster relief rate is available through its Chicago Title, Ticor Title, Fidelity National Title, and Security Union Title companies on private or federal loans for victims whose properties are located in a declared disaster area. The reduced rate will apply to reconstruction loans on residential or commercial properties originated within two years of the declared disaster date for the property's location. FNF can be found online at http://www.fnf.com.

Class B of ContiMortgage Home Equity Loan Trust series 1998-1 has been downgraded from B to CCC by Fitch Ratings.In addition, Fitch affirmed the ratings on four other classes in the deal and on five classes of ContiMortgage Home Equity Loan Trust series 1999-1. The rating agency attributed the downgrade to a decline in enhancement relative to the required credit support levels.

Three classes from two IndyMac ABS Inc. home equity transactions have been downgraded by Fitch Ratings and another class from a third transaction has been placed on Rating Watch Negative.The downgrades were as follows: class BF of series SPMD 2000-A group 1, from BB to CCC; class MF-1 of series SPMD 2001-A group 1, from A-minus to BBB-minus; and class MF-2 of series SPMD 2001-A group 1, from BB to B-minus. Class BV of series SPMD 2000-A group 2 was placed on Rating Watch Negative. In addition, the ratings on seven other classes from the three deals were affirmed, and an eighth rating was left unchanged. The rating agency attributed the downgrades to a significant increase in losses that has depleted overcollateralization. "The structures in the 2000-A and 2001-A transactions are not cross-collateralized, so they do not allow for excess spread to be shared by the groups," Fitch said. The rating agency said those two deals are structured to allow bonds that are written down due to losses to be written back up. Fitch can be found online at http://www.fitchratings.com.

Pretax net income for the average firm in the mortgage banking industry surged to $40.4 million in 2002 from $23.2 million in 2001, according to the Mortgage Bankers Association of America.The MBA's 2003 Cost Study surveyed 193 mortgage companies to determine the income and costs associated with originating and servicing one- to four-unit residential loans. It found that net income from warehousing rose to $522 per loan in 2002 from $456 in 2001. In addition, the study found that net secondary marketing income, capitalized servicing, and servicing release premiums provided the largest contribution to the bottom line in 2002, at $1,609 per loan. Meanwhile, mortgage servicing rights amortization and impairments (net of hedging gains) accounted for $430 per loan in losses in 2002, up from $351 in 2001, according to the MBA study. "Average company profitability surged largely due to favorable warehousing interest spreads and secondary market gains," the MBA reported. "However, one downside to the high refinancing volume was in loan servicing." The MBA can be found online at http://www.mbaa.org.

Employment in the mortgage industry leveled off in August and September, according to the latest employment report, with a loss of 1,000 jobs in September.U.S. Bureau of Labor Statistics data released on Friday shows full-time employees in the mortgage banker/broker section totaled 422,000 in September, down from 423,000 in August. (The BLS report does not reflect the firing of temporary and contract workers seen recently in the industry.) The October jobs report released on Friday also show that employment in the overall economy grew by 125,0000 in September and October, which signals the economy is starting to generate jobs. The manufacturing section lost 24,000 jobs, which is below the 53,000 average for the past 12 months. (There is one-month lag in mortgage employment data due to changes BLS made to its monthly employment report this spring.)

An affiliate of Fitch Ratings plans to release a version of the 2003 model the company uses to set credit enhancement levels for securitized, residential mortgages in the first quarter of next year.Among the things the model takes into account are regional home price bubbles and performance statistics that show alternative-A credits have a better and different performance record than B&C credits, Fitch analysts said at a meeting in New York. Fitch has been using this model to set credit enhancement levels since about the end of the first quarter of this year, said Sarbashis Ghosh, senior director in Fitch's structured finance residential mortgage area. The Nov. 5 meeting was its first public discussion of the model's underlying statistics, he said. Fitch Ratings can be found online at http://www.fitchratings.com.

Standard & Poor's has released an updated version of its credit risk analysis product for residential mortage-backed securities.S&P had added several new fields of information that "has been shown to play a critical role in a loan's foreclosure frequency or loss severity expectation" to the product. Among these is a compliance field that takes into account anti-predatory lending laws. S&P can be found online at http://www.standardandpoors.com.

Fitch Ratings has placed ORIX Capital Market's special servicer rating for commercial mortgage loans on "negative watch" due to strategies the company uses to work out troubled loans.Fitch said that in its opinion, the strategies "are more consistent with a Fitch rating of CSS2 or CSS3 than the current ORIX rating of CSS1. Stephany Petosa, a senior director at Fitch Ratings, said ORIX pursues resolution of perceived errors or loopholes in loan or deal documents "by initiating aggressive litigation." She said this strategy presents a risk to the financial interests of investors in the securities backed by the loans.

The New York Federal Home Loan Bank is warning member institutions to expect very low quarterly dividends going forward while the bank rebuilds its retained earnings.The FHLBank suspended its third quarter dividend after it sold nearly $2 billion in impaired manufactured housing securities at a $190 million loss. This loss reduced the bank's retained earnings from $240 million to $100 million. In a letter to shareholders, New York FHLBank president Alfred DelliBovi noted that the bank's federal regulator wants dividends paid out of earnings after a set-aside is made to build retained earnings to an appropriate level. "Given our need to rebuild retained earnings and the loss of investment income from the nearly $2 billion in MBS investments we sold in September, we expect that future dividends paid by the Home Loan Bank will be at a lower level relative to prevailing market interest rates than the dividends of the recent past," Mr. DelliBovi says in the letter. In the second quarter, the NY bank paid a 5.05% dividend. Mr. DelliBovi also noted that FHLBank officers and employees will not receive a year-end bonus this year.