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Prepayment rates for Fannie Mae and Freddie Mac mortgage-backed securities surged in June for recently originated 30-year 5.5% coupons and rose significantly for 6.0% coupons as well, according to the Bear Stearns Prepayment Commentary.Speeds for Fannie Mae '03 vintage 5.5s jumped from a constant prepayment rate of 7.2 to 20.8, while speeds for the '02 vintage soared from 18.6 CPR to 42.4 CPR, a record increase, Bear Stearns analysts Dale Westhoff and Bruce Kramer reported. The analysts said the "most notable aspect" of the June report was the divergence in response between lower coupons (6.0% and lower) and higher coupons (6.5% and higher). "The lower coupons, especially the 5.5s, saw a spectacular jump in speeds based on a first-time opportunity to refinance," they said. ".... Since today's report corresponds to a mortgage rate of approximately 5.5% and a [Mortgage Bankers Association of America] Refinancing Index of between 7500 and 8000, we expect to see additional increases develop in next month's report in response to a record low in mortgage rates of 5.25% and a 10000 peak in the Refinancing Index." Bear Stearns can be found online at http://www.bearstearns.com.

Contrary to expectations, a weak economy and rising unemployment have not weakened the performance of subprime mortgage loans, according to Moody's Investors Service."Through analysis of Moody's Home Equity Index, we see that the increase in unemployment has so far had minimal impact on subprime performance as delinquency rates and losses have held steady," said Julia Tung, a Moody's analyst. However, Moody's warned that future subprime performance could suffer if increased lender competition leads to a relaxation of underwriting standards. Moody's can be found online at http://www.moodys.com.

The ratings on two classes of Morgan Stanley Capital I Inc.'s commercial mortgage pass-through certificates, series 1997-XL1, have been lowered by Standard & Poor's Ratings Services.The downgrades were as follows: class G, from BB to B, and class H, from B to CCC. The ratings on four other classes in the deal were raised, and three others were affirmed. S&P attributed the downgrades to the deterioration in the performance of four of the seven remaining nondefeased loans, which represent 25% of the outstanding pool balance. The loans are: Grand Kempinski Hotel, secured by a luxury hotel in Dallas; Mark Centers Pool, secured by 17 community and neighborhood retail shopping centers in seven Eastern states; Westgate Mall, secured by a regional mall in Fairview Park, Ohio; and Westshore Mall, secured by a mall in Holland, Mich. S&P can be found on the Web at http://www.standardandpoors.com.

Irwin Financial Corp., Columbus, Ind., has announced that it expects its earnings per share for the second quarter to fall "significantly below" its first-quarter EPS because of a revised economic outlook that will hurt the credit quality of its home equity portfolio.Irwin, the parent company of Irwin Mortgage Corp., Irwin Home Equity Corp., and several other subsidiaries, said its EPS for all of 2003 is still expected to be in line with previous guidance of at least $2.25, however. Irwin said its home equity lending segment has been hurt by the weak economy, especially unemployment. Recent forecasts by third-party economists and the Federal Reserve have led the company to believe that its home equity portfolio will be hurt more severely than previously estimated, Irwin said. The company can be found online at http://www.irwinfinancial.com.

Net-interest-margin securitizations have performed better than expected in the U.S. subprime residential mortgage-backed securities market, and they are likely to continue to do so, according to a report by Fitch Ratings.The report said the decline in short-term interest rates is the primary reason for the NIMS performance, while a trend toward using more conservative assumptions in structuring the securities is an additional factor. "If the economy continues its slow growth and remains in its sluggish state, Fitch expects NIMS to sustain their current outperformance of stressed projections," said Tom Albertson, a Fitch senior director. "A worsening economic scenario would only cause NIMS to underperform if the negative effects of rising delinquencies exceed the benefits of falling interest rates." The report is titled "Net Interest Margin Securitizations Performance Update and Outlook." The rating agency can be found on the Web at http://www.fitchratings.com.

America's Senior Financial Services, Jupiter, Fla., has announced an effort to identify short-sellers of its shares on the Over-the-Counter Bulletin Board Exchange and said it may move to certificate-only trading.Adopting certificate-only trading would "sidestep the abuses that exist via short-selling of securities held in 'Street name'," the company said. Nelson Locke, the company's chief executive officer and largest shareholder, said America's Senior recently confirmed short-selling by a party who was "significantly short" and informed the party's broker. "Because our shares are [eligible to be sold in Street name], the broker allowed the short-selling to continue even after being advised that the seller could not cover his short position," Mr. Locke said. "We believe we could reduce this type of harmful conduct by requiring that shareholders have physical custody of actual certificates before selling." Mr. Locke also encouraged shareholders to take their shares out of Street name. America's Senior, the parent company of Jupiter Mortgage Corp., can be found online at http://www.americassenior.com.

Issuance of second-lien mortgage-backed securities reached more than $6.5 billion in the first quarter, putting this segment of the market on track for a record-breaking year, according to Moody's Investors Service."The higher issuance volume is mainly driven by the popularity of second-lien products for both borrowers and lenders," Moody's said in a report written by Marjan Riggi, a vice president and senior analyst. "Given property price appreciation and low interest rates, the increased equity in the borrowers' homes has provided them the opportunity to take out a second loan on considerably better terms than credit cards or other consumer loans." Moody's can be found online at http://www.moodys.com.

Mortgage lenders added over 10,000 employees to their payrolls in May as the refinancing boom and record home sales continued to stretch industry capacity, according to an estimate based on data from the U.S. Bureau of Labor Statistics.Using BLS data released July 2, MortgageWire estimates that employment in the mortgage banker/broker sector jumped from 398,100 in April to 409,000 in May. Owing to changes announced last month, the BLS no longer provides an official estimate of employment in the mortgage industry. MW's estimate uses two BLS data series from the June employment report to approximate the employment numbers for May. The BLS can be found online at http://stats.bls.gov.

David S. Loeb, co-founder of Countrywide Credit Industries and IndyMac Bancorp Inc., died June 30 in Sparks, Nev., at the age of 79, IndyMac has reported.Mr. Loeb, who was also chairman emeritus of IndyMac, co-founded Countrywide (now Countrywide Financial Corp.) with Angelo Mozilo in 1969 and served as its president and chairman from March 1969 through February 2000. In 1985, Messrs. Loeb and Mozilo founded Countrywide Mortgage Investments Inc., a real estate investment trust, which evolved into IndyMac Bancorp, IndyMac said. "David was a giant in the mortgage industry," said Michael W. Perry, IndyMac's chairman and chief executive officer. ".... His wisdom and industry experience, coupled with his strategic vision, strongly influenced IndyMac's foundation and helped us become what we are today. He was also a great mentor and friend, and we will miss him."

Matrix Bancorp Inc., Denver, has announced the renaming of its subsidiary Matrix Capital Markets Inc. to Matrix Bancorp Trading Inc.Richard V. Schmitz, co-chief executive officer of Matrix Bancorp and chairman of the subsidiary, said the name change "will allow the subsidiary's customers to more readily identify the company as a subsidiary of Matrix Bancorp." The subsidiary provides consulting services to financial institutions and financial services companies in the mortgage banking industry. The parent company can be found on the Web at http://www.matrixbancorp.com.