Servicing

Freddie Mac, the Credit Union National Association, and CUNA Mutual Mortgage Corp. have announced an agreement that gives credit unions and their members "unprecedented access" to the secondary mortgage market and the latest mortgage technology.Under the agreement, qualified credit unions will have access to capital markets and portfolio management expertise, "simplified seasoned mortgage sale execution," a secondary market execution with only a single mortgage loan, and a private-label servicing option, the alliance members said. "The great thing about this alliance is that it marries Wall Street money to credit union philosophy," said Daniel A. Mica, CUNA's president and chief executive officer. "It will allow credit unions to use their mortgage portfolios to, in effect, access the capital markets. This is an enormous breakthrough at a time when mortgages have become the fastest-growing area of credit union lending."

The special servicer rating of InterBay Funding LLC, Miami, has been raised from RSS2-minus to RSS2 by Fitch Ratings.The rating agency said the upgrade "reflects InterBay's ability to manage and liquidate nonperforming residential mortgage loans and real estate owned assets utilizing its solid default management expertise and advanced default technology, which are integral components of special servicing." Fitch also cited the company's "experienced management and staff, enhanced loan administration procedures, and strengthened management structure." InterBay's special servicing is performed on portfolios acquired by its parent company, BayView Financial Trading Group. Fitch rates residential servicers on a scale of 1 to 5, with 1 being the highest rating. It can be found online at http://www.fitchratings.com.

Fannie Mae has announced refinements to its Benchmark Securities programs for 2003 and named the members of its core dealer group for Benchmark Notes.The government-sponsored enterprise said it will adopt a flexible syndicate structure for Benchmark Bills auctions under which it will select a core syndicate of 6-10 dealers monthly, while reserving the right to go outside that range. Fannie Mae said it will occasionally engage in buybacks of noncallable Benchmark Securities (except for on-the-run securities in two-, three-, five-, and 10-year maturities), but will limit the buybacks to ensure that a minimum of $4 billion of a specific Benchmark Note and $2 billion of a specific Benchmark Bond will remain outstanding. The members of the GSE's core Benchmark Notes dealer group are: Bear, Stearns & Co. Inc.; Credit Suisse First Boston Corp.; Deutsche Bank Securities; FTN Financial Capital Markets; Goldman, Sachs & Co.; HSBC Securities (USA) Inc.; J.P. Morgan Securities Inc.; Lehman Brothers Inc.; Merrill Lynch & Co.; Morgan Stanley & Co. Inc.; Salomon Smith Barney Inc.; and UBS Warburg LLC. Fannie Mae can be found on the Web at http://www.fanniemae.com.

Conseco has announced that the company and its senior lenders have extended a forbearance agreement that originally was to have expired on Nov. 27.The agreement has now been extended to Jan. 11, 2004 "provided that other customary terms of the agreement are met," Conseco said. Conseco, the parent company of manufactured housing and home equity company Conseco Finance, has been struggling with various financial woes and been trying to sell its mortgage-related subsidiary. Conseco can be found online at www.conseco.com.

Despite the busy home purchase and refinancing market, mortgage insurance volume dropped 3.4% in October from the month before.The Mortgage Insurance Companies of America reported that 186,361 borrowers used private mortgage insurance to buy or refinance a home in October. Insurance-in-force declined 1.09% to $724.7 billion industrywide, according to MICA. On a positive note for the industry, the number of applications for MI policies increased 4.4% in October. The association's website is www.micadc.org.

Home loan applications decreased slightly in the week ending November 22, according to the Mortgage Bankers Association of America.The trade group's index of all mortgage loan applications fell 5.8% to 1131 during the week. However, the lending index was still up 79.8% from the same week a year earlier. The MBA's home purchase index actually increased during the week, while the refinancing index fell to 5672. It was the eighteenth consecutive week that the refinance index was above 4000, and refinancing still accounted for nearly 77% of all loan applications. The MBA's website is at www.mbaa.org.

Fannie Mae and Freddie Mac will reach a little deeper into the mortgage market next year when they raise the ceiling on single-family home loans they can purchase or securitize to $322,700.The 7.33% increase from $300,700 this year isn't as great as expected. "Prices bounce around from month to month," said Tim Forsberg of the Federal Housing Finance Board. "I guess we got 'em on the downside." Increases in the conforming loan limit are based on the board's survey of housing costs from one October to the next in 31 major markets. The average this October was $235,700, compared with $219,600 a year ago. But just a month earlier, the change was even more dramatic, with prices rising 8% -- from $219,900 to $237,600 -- over the 12-month period. Nevertheless, the two government-sponsored enterprises say as many as 250,000 higher-end home buyers and owners will reap the rewards of somewhat lower interest rates starting Jan. 1. Currently, Fannie's and Freddie's combined loan purchases represent an estimated 64% of total industry production, according to the Quarterly Data Report, a MortgageWire affiliate. In addition, the Federal Housing Administration is expected to raise the limit on loans it can insure to $280,749 in high-cost markets and $154,896 is most other places.

Oakwood Homes Corp., the bankrupt Greensboro, N.C.-based builder and financier of manufactured homes, has received $415 million in various lines of credit.This includes $215 million of debtor-in-possession financing from Berkshire Hathaway Inc., Greenwich Capital Financial Products Inc., and Ranch Capital LLC. The DIP includes a $75 million loan servicing advance line. In addition, the company has negotiated an agreement for continued access to its $200 million loan-purchase facility, allowing it to continue to originate as usual. An agreement has been reached with Berkshire Hathaway, its largest senior unsecured creditor, for the Warren Buffett-controlled firm to become the largest shareholder in Oakwood when it emerges from bankruptcy.

The ratings on 42 classes of 33 home equity loan deals by Conseco Finance Corp. (formerly Green Tree Financial Corp.) have been placed on Rating Watch Negative by Fitch Ratings.The actions reflect concerns about certain servicing practices used by Conseco on its HEL portfolio, as well as Conseco's "extremely weak financial profile," Fitch said. While the home equity deals' performance has largely met Fitch's expectations, the servicing practices -- such as loan extensions and deferrals -- "may have portrayed more favorable performance than is actually the case," the rating agency said. The practices have been used to modify about 36% of the company's home equity portfolio, and "may only be a way of delaying losses," Fitch opined. The rating agency can be found online at http://www.fitchratings.com.

Charter Municipal Mortgage Acceptance Co., New York, has reported the private placement of 575,705 Series A Convertible Community Reinvestment Act Preferred Shares with an unnamed financial institution at $17.37 per share.Net proceeds of the offering will be used mainly to buy additional tax-exempt revenue bonds secured by multifamily housing properties. CharterMac said it believes, based on a legal opinion, that an investment in CRA Preferred Shares allows financial institutions to "receive positive consideration" under the CRA investment test. "Through a proprietary allocation methodology developed by CharterMac, these financial institutions are able to trace their investment to specific affordable housing properties financed by CharterMac that are located in the financial institutions' self-defined geographic CRA assessment area," the company said. CharterMac, which invests in and services multifamily housing debt, can be found online at http://www.chartermac.com.