Servicing

Rising rates may signal better footing in the market for mortgage servicing rights, if a recent proposed sale involving $5.4 billion of mortgages is any indication.Phoenix Capital, Denver, is representing Ohio Savings Bank in the sale of servicing rights on $5.4 billion of fixed-rate Fannie Mae loans. The bulk portfolio consists of newly originated loans with 30-year and 15-year weighted average note rates of 5.90% and 5.14%, respectively. The average loan balance is $167,655. Phoenix said it has traded servicing rights on about $40 billion of loans since January.

The rating on class B of Delta Funding Home Equity Loan Trust 2000-4 has been lowered from B to D by Standard & Poor's.The ratings on four other classes from the deal were affirmed. S&P attributed the downgrade to a depletion of overcollateralization that resulted in a writedown of more than $92,000 to class B, as well as the levels of losses and serious delinquencies.

The ratings on three classes of Conseco MH Senior/Subordinate Pass-Through Trust 2000-3 have been lowered and removed from CreditWatch with negative implications by Standard & Poor's Ratings Services.The downgrades were as follows: class M-1, from A to B-minus; class M-2, from BBB to CCC; and class B-1, from BB to CCC-minus. "The performance trend associated with the pool of manufactured housing contracts (which supports the rated certificates) has deteriorated during the past two years, with more pronounced deterioration experienced during the past several months," the rating agency said. S&P can be found on the Web at http://www.standardandpoors.com.

Citigroup Global Transaction Services has been appointed custodian for $300 billion in assets serviced by seven of the 12 Federal Home Loan Banks, according to the company.Citigroup said the deal represents "one of the largest such appointments in the history of the transaction services industry." Citigroup has been appointed custodian for the FHLBanks of Chicago, Des Moines (Iowa), Indianapolis, New York, Pittsburgh, San Francisco, and Topeka (Kan.). Prior to the appointment, Citigroup already served as custodian for an additional $130 billion of assets serviced by the FHLBanks of Atlanta and Boston.

Class B-3 of GE Home Equity series 1999-HE1 has been downgraded from CC to C by Fitch Ratings.The bond took a principal writedown on June 25, and credit support for the class has been reduced to zero due to the level of losses, Fitch said. "Although the transaction's structure allows for the writedown amount to be repaid in subsequent months, if there are recoveries in the future, the structure does not allow for interest on the written-down amount to be repaid," the rating agency said.

The rating on class B-1 of OMI Trust 2000-D has been lowered from CC to D by Standard & Poor's Ratings Services.The downgrade "reflects the unlikelihood that investors will receive timely interest and the ultimate repayment of their original principal investment," S&P said. The trust reported an outstanding liquidation loss interest shortfall of $11,595.27 for the B-1 class on the July payment date. S&P said it believes that B-1 interest shortfalls "will continue to be prevalent in the future, given the adverse performance trends displayed by the underlying pool of manufactured housing retail installment contracts originated by Oakwood Homes Corp., and the location of B-1 writedown interest at the bottom of the transaction payment priorities (after distributions of senior principal)." Oakwood announced in November 2002 that it was filing for Chapter 11 bankruptcy protection. S&P can be found online at http://www.standardandpoors.com.

Gregory J. Parseghian, Freddie Mac's president and chief executive officer, has been named chairman of the board of the Freddie Mac Foundation.Mr. Parseghian has served for two years on the board of the foundation, which was created in 1991 as a philanthropic program for children, youths, and their families. As chairman, Mr. Parseghian will oversee initiatives aimed especially at preventing child abuse and neglect, promoting foster care and adoption, and youth development, the foundation said. "The Freddie Mac Foundation anchors our philanthropic program, and I look forward to leading its efforts to make a positive difference in the lives of children," he said. Mr. Parseghian was named president and CEO of Freddie Mac in June. He was previously its executive vice president and chief investment officer. The foundation can be found online at http://www.freddiemacfoundation.org.

LOGS Financial Services, Northbrook, Ill., a default management and outsourcing provider for the mortgage industry, has announced the expansion of its services into the subprime and chattel mortgage markets.The company has formed a subprime default management group in its Outsourcing Division, with an emphasis on manufactured housing. LOGS said it recently contracted to service delinquent loans in Baton Rouge, La., to complement the work being done in its Northbrook and Jacksonville, Fla., locations. "Losses in the manufactured housing market continue to rise to the point where fewer financing opportunities exist for the purchase of new units," said Michael C. Barron, LOGS' general counsel. "This has resulted in higher pricing for these loans and, consequently, a higher default risk. By applying the process-driven structure of our Outsourcing Division to the management of these loans for our servicing clients, we are confident we can reduce the cost of liquidation while ensuring the best possible recovery on the collateral value." LOGS said it is also expanding its default management services to handle mixed collateral loans, home equity, and other unusual financing arrangements. The company can be found online at http://www.logs.com.

Four classes of IndyMac Manufactured Housing Contract pass-through certificates have been downgraded by Fitch Ratings.The downgrades were as follows: series 1997-1, class M, from BBB to B; series 1998-1, class M, from BBB to B; series 1998-2, class M-1, from BBB-minus to B, and class M-2, from BB-minus to CCC. In addition, the ratings on 14 other classes from the three deals were affirmed. The rating agency noted that IndyMac exited the manufactured housing lending business in mid-1999 but continues to operate its mortgage loan servicing operation in Pasadena, Calif. Fitch attributed the downgrades to poor performance of the underlying manufactured housing loans, whose higher-than-expected losses have led to "the complete depletion of overcollateralization on all three transactions." Fitch can be found online at http://www.fitchratings.com.

Southern Financial Bancorp. and Essex Bancorp, both of Virginia, have announced a merger that will spin off Essex's wholly owned mortgage subservicing subsidiary.Following the bank merger, the existing shareholders of Essex Bancorp will own 75.1% of LoanCare, Essex's servicing unit. Southern Financial will own 24.9% of LoanCare. LoanCare is a nationwide subservicer of loans for various investors. Gene D. Ross, currently chairman and chief executive officer of Essex Bancorp, will become the CEO of LoanCare.