Servicing

The Federal Agricultural Mortgage Corp., Washington, has reported net income of $21.3 million ($1.77 per share) for 2002, and said the figure was reduced by $2.5 million by the impact of Financial Accounting Standard 133.Farmer Mac's net income for the prior year was $16.3 million, the company said. However, fourth-quarter net income available to common stockholders declined from $5.5 million in the fourth quarter of 2001 to $2.8 million in the fourth quarter of 2002, reflecting in part the impact of accounting-related charges. Excluding extraordinary gains and losses, net income was $4.4 million in the fourth quarter. New business volume grew by $2 billion, a 38% increase over the previous year, Farmer Mac said.

Countrywide Credit Industries Inc., Calabasas, Calif., has reported record unaudited earnings of $841.8 million ($6.49 per share) for 2002, up 57% from $537.5 million ($4.34 per share) in the comparable fiscal 12-month period, which ended Nov. 30, 2001.(Countrywide adopted a calendar-year reporting schedule in January 2002.) Pretax earnings by the company's core mortgage banking operations totaled $968 million in 2002, up 45% from $667 million, while pretax earnings from diversified businesses nearly doubled to $375 million, representing 28% of total earnings, the company said. In the fourth quarter, earnings totaled $254.9 million ($1.94 per share), up 58% from $161.0 million ($1.27 per share) in the fiscal quarter ended Nov. 30, 2001. "Remarkable quarterly and annual operational milestones were established, while setting earnings records in mortgage banking," said Angelo R. Mozilo, Countrywide's chairman and chief executive officer. "Record fundings of $102 billion in the fourth quarter far exceeded prepayments by $50 billion. Annual fundings exceeded prepayments by $123 billion, driving the uninterrupted growth in the servicing portfolio to $452 billion at Dec. 31, 2002." The company can be found online at http://www.countrywide.com.

The American Bankers Association and Freddie Mac have announced the formation of an alliance that offers ABA member banks greater access to the secondary market and a range of products and services.The agreement offers preferred access to the tools and services on Freddie Mac's loanprospector.com website and a private-label subservicing option through Dovenmuehle Mortgage Inc., among other features. "This is an end-to-end business solution for banks," said Dave Stevens, senior vice president for single family lending at Freddie Mac. "The agreement is designed to meet the needs of ABA members and includes components that improve the front-end origination process, enhance back-end servicing solutions, and energize mortgage portfolio management and investment strategies of participating banks." The ABA can be found online at http://www.aba.com, and Freddie Mac can be found at http://www.freddiemac.com.

Irwin Mortgage Corp., Columbus, Ind., has announced the selection of Minneapolis-based U.S. Bank as document custodian for its mortgage files.As custodian of the files, U.S. Bank will be responsible for file certification and storage and for compliance with standards set by Ginnie Mae, Fannie Mae, Freddie Mac, and the Federal Home Loan Bank System, Irwin Mortgage said. Eric Knapp, vice president of Irwin Mortgage, said U.S. Bank's Internet reporting capabilities were "a deciding factor" in Irwin's choice of the bank. Irwin Mortgage is a subsidiary of Irwin Union Bank, and its ultimate parent company is Irwin Financial Corp. Irwin Financial can be found on the Web at http://www.irwinfinancial.com, and U.S. Bank can be found at http://www.usbank.com.

A survey of major private-label issuers indicates that they expect the volume of new jumbo residential mortgage-backed securities to fall 10%-20% this year from last year's record high, Moody's Investors Service has reported.The rating agency projects that private-label securitizations will decline less than the overall mortgage market, which it estimates will decrease by 15%-25%. Moody's said $228 billion in jumbo RMBS were originated in 2002. Moody's can be found online at http://www.moodys.com.

The Federal Home Loan Bank of Chicago has reported that the Mortgage Partnership Finance program ended last year with $41.7 billion of loans outstanding, a 68% increase from 2001.Noting that the amount of mortgage debt outstanding grew an estimated 11% last year, the Chicago FHLB said the program is gaining market share, and that most of the growth has come from member institutions using the MPF as an outlet for conventional loans, as opposed to government-backed loans. During 2002, $27.9 billion of MPF loans were funded through the participating FHLBanks. As of Dec. 31, 437 FHLBank member commercial banks, thrifts, credit unions, and insurance companies were participating in the MPF program.

The Bond Market Association has reported that it has facilitated the development of a new file format for monthly reporting of payment data for private-label collateralized mortgage obligations and asset-backed securities.The association said the new format addresses "the problem of post-payment adjustments … where DTCC has to revise the payment made to CMO and ABS bondholders after the payment has already gone out." The new format, which is being phased in this year, is "designed to decrease the number of such revisions," the association said. The association can be found online at http://www.bondmarkets.com.

Wells Fargo & Co., San Francisco, has reported record net income of $5.71 billion ($3.32 per share) for 2002, up 11% from $5.15 billion ($2.97 per share) in 2001.For the fourth quarter, net income totaled a record $1.47 billion ($0.86 per share), up 10% from $1.33 billion ($0.77 per share) a year earlier. Wells Fargo's mortgage origination volume totaled $333 billion for the year, which it termed an industry record. "The home finance businesses saw exceptional growth in 2002, with total originations of $333 billion surpassing our 2001 industry record of $202 billion," said Mark Oman, group executive vice president for home and consumer finance. The company's owned servicing portfolio ended the year at $535 billion, up 26%, and its home equity portfolio grew 41% to $36 billion, Mr. Oman said.

Standard & Poor's has reported that rating actions on residential mortgage-backed securities doubled in the fourth quarter compared with those of a year earlier, but most of the news was good, as upgrades exceeded downgrades by 214 to 16."The outstanding rating performance of RMBS securities during 2002 was largely due to record levels of prepayments resulting from unprecedented low mortgage rates in the U.S.," said Ernestine Warner, a director in S&P's structured finance surveillance group. In addition, the strength of the housing market contributed to the upgrades.

Standard & Poor's is giving the cold shoulder to loans that are affected by the new Georgia Fair Lending Act.Beginning Feb. 1, S&P said conforming-balance mortgage loans and manufactured housing loans governed by the Georgia law will not be allowed in S&P-rated structured finance transactions. S&P said the decision was based on the determination "that investors cannot be insulated from the potential liability resulting from violation" of the Georgia law through the credit enhancement or legal structure of the securities. The rating agency can be found online at http://www.standardandpoors.com.