Servicing

Hibernia Corp., New Orleans, has reported net income of $56.2 million ($0.36 per share) for the first quarter, down 5% from $59.2 million ($0.37 per share) a year earlier, citing a temporary impairment of its mortgage servicing rights as a factor in the decline.The company said the $14.5 million noncash expense for the MSR impairment was due chiefly to an increase in the expected prepayment rate on the mortgage loans. Without the charge, net income would have totaled $65.6 million in the first quarter, up 11% from that of a year earlier, Hibernia said. "Management believes that net income excluding the mortgage impairment charge is a useful measure of operating results, because the impairment expense is a temporary noncash charge that may be recaptured in future periods if interest rates rise and prepayment speeds slow down," the company said. Hibernia can be found online at http://www.hibernia.com.

Six classes of CNC's series 1994-1 pass-through certificates, secured in part by Kmart Corp. leases, have been downgraded by Fitch Ratings and removed from Rating Watch Negative.Classes A-1, A-2, and A-3 were downgraded from BB-plus to BB-minus; class B from CCC to CC; class C from CC to C; and class D from CC to C. Fitch attributed the downgrades to "further deterioration in the credit ratings of the largest tenant concentration, Kmart, which comprises 51% of the pool, as well as limited information on the underlying collateral." The rating agency said it withdrew the corporate ratings of the bankrupt retailer in March and "will closely monitor Kmart's decision to affirm or reject any more leases, and the further effect that decision may have on this transaction."

Silverado Financial Inc., Campbell, Calif., has announced the adoption of a new business model focused on the acquisition of established, profitable mortgage brokerage and banking operations in Northern California.The company said the move was linked to the transfer of real estate licenses from Realty Capital Corp. in conjunction with a binding letter of intent signed on April 9. The acquisition model calls for buying the companies for a low multiple of free cash flow, with the seller carrying a note that will typically be paid over a 12-month period from the acquisition's own cash flow, Silverado said. The company said prospective changes in the Real Estate Settlement Procedures Act "will force the relationship between the mortgage broker and the mortgage banker to change," making it "more important than ever" that the brokerage community have "immediate access to pertinent information from its lending sources." Silverado's principal business consists of investing in, originating, and servicing mortgage loans, primarily those secured by first trust deeds to residential and commercial properties.

Washington Mutual Inc., Seattle, has reported record earnings of $1.0 million ($1.07 per share) for the first quarter, up from $956 million ($0.99 per share) a year earlier.Originations of single-family residential loans totaled $97.47 billion for the quarter, up from $58.97 billion a year earlier. Home equity loans and lines of credit and multifamily loans totaled $38.72 billion as of March 31, up $6.73 billion, or 21%, from a year earlier, WaMu reported. The company said it is on schedule to open approximately 250 financial center stores and 70 home loan stores this year. WaMu can be found online at http://www.wamu.com.

The ratings on three classes from various Conseco Finance Corp.-related securitizations issued by Home Improvement & Home Equity Loan Trust have been lowered from CCC-minus to D (default) by Standard & Poor's Ratings Services.The affected classes were as follows: series 1996-C, class HI:B-2; series 1996-F, class HE:B-2; and series 1997-C, class HE:B-2. Conseco Finance did not make any payments under a limited guarantee on the April 15 distribution date, resulting in interest shortfalls on the three classes, the rating agency said.

The ratings on four classes of Manufactured Housing Contract Trust series 2000-3 and one class of Manufactured Housing Contract Trust pass-through certificates series 2001-1 have been lowered by Standard & Poor's Ratings Services.The downgrades in series 2000-3 were as follows: class I A, from AAA to A-minus; class I M-1, from AA to BBB-minus; class I M-2, from A to BB; and class I B-1, from BBB to CCC. In series 2001-1, class I M-1 was downgraded from AA to AA-minus. All five classes were removed from CreditWatch with negative implications, as were three other classes from series 2001-1 whose ratings were affirmed. In addition, the ratings were affirmed on 37 classes from 14 other deals issued by the trusts and by GreenPoint Credit Manufactured Housing Contract Trust. S&P attributed the downgrades to deteriorating performance by the underlying manufactured housing loan contracts. S&P can be found online at http://www.standardandpoors.com.

Seven classes of notes issued by Prudential Structured Finance CBO I, which are supported in part by residential and commercial mortgage-backed securities, have been downgraded by Fitch Ratings.The downgrades were as follows: class A-1L floating rate notes and class A-1 fixed-rate notes, from AAA to AA-plus; class A-2L floating-rate notes, from A-minus to BBB-plus; class B-1L floating-rate notes and class B-1 fixed-rate notes, from BBB-minus to BB-plus; and class B-2L floating-rate notes and class B-2 fixed-rate notes, from BB-minus to B. Classes A-2L, B-1L, B-1, B-2L, and B-2 were also removed from Rating Watch Negative. The rating agency attributed the downgrades to various factors, including "substantial downward rating migration in the credit quality of the portfolio and a reduction in excess spread." The transaction, a collateralized bond obligation, is supported by a diversified portfolio of RMBS, CMBS, and asset-backed securities. Fitch can be found online at http://www.fitchratings.com.

Fannie Mae has named four new vice presidents, including two who have worked at the Department of Justice and another who was involved in developing Mexico's mortgage industry.The four are: Gabriel Galvan, vice president for emerging markets; Joseph Grassi III, vice president and deputy general counsel for multifamily legal services; Monica Medina, vice president and deputy general counsel for corporate governance; and Jon Seward, vice president and deputy general counsel for fair lending. Mr. Galvan has worked for several technology-related firms during his career, including IBM, and he was assigned to Mexico in 1995 and "was heavily involved in the development of the mortgage industry in that country," according to Fannie Mae. Mr. Grassi joined Fannie in 1994 -- from Freddie Mac. Ms. Medina was a partner in a private law firm and was previously deputy associate attorney general at the DOJ. Mr. Seward was a deputy chief at the DOJ and also a trial attorney in the fair housing division of the Department of Housing and Urban Development. Fannie Mae can be found online at http://www.fanniemae.com.

Standard & Poor's Ratings Services has withdrawn its Strong residential servicer ranking on First Nationwide Mortgage Corp., Frederick, Md., as a result of First Nationwide's recent name change to CitiMortgage Inc.S&P said First Nationwide has also been removed from its Select Servicer List. The name change followed the acquisition of First Nationwide's parent, Golden State Bancorp Inc., by Citigroup Inc., which operates its prime servicing platform under the CitiMortgage banner. CitiMortgage has indicated that it is not planning to close the Frederick servicing platform, S&P said. The rating agency can be found online at http://www.standardandpoors.com.

Wells Fargo & Co., San Francisco, has reported record net income of $1.49 billion ($0.88 per share) in the first quarter, up 8% from $1.38 billion ($0.80 per share) a year earlier.Wells Fargo's mortgage origination volume totaled $103 billion in the first quarter, the second-highest level in the company's history, and the mortgage pipeline ended the quarter at $89 billion, up 29% from the year-end level, the company said. The owned servicing portfolio totaled $552 billion at March 31. "Since March 31, 2002, the owned servicing portfolio is up $95 billion, the weighted average note for the portfolio has declined 62 basis points to 6.45%, and the value of the residential and commercial mortgage servicing rights has been reduced by over $2.9 billion to $4.2 billion," said Mark Oman, Wells Fargo's group executive vice president for home and consumer finance. The company can be found online at http://www.wellsfargo.com.