Servicing

Monthly delinquencies have increased 1-3% on a relative basis for almost all vintages of fixed and adjustable-rate mortgage pools backing subprime, home equity asset-backed securities, Credit Suisse First Boston has reported.Delinquencies appeared relatively highest in the '00 vintage year, according to CSFB's October subprime home equity ABS tracker (HEAT) report produced by fixed income researchers Rod Dubitsky, Neil McPherson, Christopher Fenske and Jeff Zhang. The report said that "'96 and '97 vintages each decreased 1% , '98 remained relatively unchanged, while the '99 and '00 vintages increased 2% and 5% respectively."

Four classes of Salomon Brothers Mortgage Securities VII Inc. mortgage pass-through certificateshave been downgraded by Fitch. In Salomon 1997-HUD1, class B4 was downgraded fromBB to B and placed on Rating Watch Negative and class B5 was downgraded from B-minus to D. In Salomon 1997-HUD2,class B4 was downgraded from BB to B and placed on Rating Watch Negative and class B5 was downgraded to D. In additionto the downgrades, class B3 of Salomon 1997-HUD2 was placed on Rating Watch Negative. The rating agency attributedthe actions to loss and delinquency levels relative to applicable credit support.

Fitch has downgraded Delta Financial Corp.'s $150 million of 9.5% senior secured notes due Aug.1, 2004 from CCC-plus to CC, which the rating agency said indicates that "default of some kind appears likely."Fitch said Delta's ability to meet its financial obligations is "solely relianton sustained favorable business and economic developments." The rating agency cited Delta's recently announcedplans to engage Ocwen Financial Corp. to perform certain subservicing functions on Delta's subprime home equityloan portfolio. "As part of the transaction, Delta will pass through the servicing fee to Ocwen, thereby reducingthe company's operating income, although this is offset to some degree by reduced operating expenses," Fitchsaid. The rating agency said Delta's decision to exit loan servicing is based on its desire to "reduce theliquidity strain associated with making servicing and interest advances. Moreover, servicing a shrinking portfoliocoupled with declining asset quality characteristics makes the economics of servicing much less attractive."Fitch's website address is http://www.fitchratings.com.

Tidalwave Holdings Inc., Fort Lauderdale, Fla., has announced an intensified effort to acquire amortgage company that has approvals from Fannie Mae or Freddie Mac. Tidalwavepresident Leon Kline said the company wants to add a division that originates conforming loans, with the aim ofbuilding a long-term servicing portfolio. "Our Investment Mortgage Banking Division, First American MortgageSecurities, has the ability to retain servicing on pools that are currently being bid on a servicing-released basis,"Mr. Kline said. "First American Mortgage Securities management feels that it can immediately provide a conformingdivision with a dramatic increase in per-month originations, where we can retain the servicing." He said theideal acquisition would be a small agency-approved mortgage company that uses a subservicer and whose managementwants to stay on. The company's website address is http://www.tidalwaveholdings.com.

Fannie Mae has priced a $5.0 billion cash offering of two-year Benchmark Notes and a $4.0 billioncash offering of seven-year Benchmark Notes. The two-year, 6.375% notes (CUSIP31359MGG2), priced at 99.873, yield 6.443% at a spread of 53 basis points over the 5.913% Treasury due in September2002. The seven-year, 6.625% notes (CUSIP 31359MGH0), priced at 99.442, yield 6.726% at a spread of 94.5 bp overthe 6.75% Treasury due in May 2005. The joint lead managers for both issues are Goldman, Sachs & Co., J.P.Morgan Securities Inc., and Lehman Brothers Inc. Fannie Mae's website address is http://www.fanniemae.com.

Theoretics Inc., a privately held developer of risk management systems for fixed-income products and derivatives,has reached strategic licensing agreements with a number of new customers, including GMAC Mortgage. The Park City, Utah-based company said it also has licensing agreements involving its Telemark Risk ManagementSystem with SunTrust, Zurich Capital Markets, and the Federal Home Loan Bank of Boston. The new online versionof the company's system allows managers to track their portfolios from any location with Internet access. Theoreticsis offering free trial use of the online version of its technology. The Telemark system is generally leased fora per-month charge. It offers fixed-income coverage that includes bonds, mortgages, structured swaps, caps andfloors, swaptions, currencies, and synthetic option replication. The company's website address is http://www.theoretics.com.

The servicer ratings of Crown Northcorp have been placed on Rating Watch Negative by Fitch. The company has a master servicer rating of CMS3, a primary servicer rating of CPS2, and a special servicerrating of CSS2. (Fitch rates servicers on a scale of 1 to 5, with 1 being the highest rating.) "This decisionfollows disclosure of financial weaknesses that have led to a significant reduction in staff and affected the uncertaintyas to the future of the company," the rating agency said. Crown Northcorp does not service any commercialmortgage-backed securities deals currently rated by Fitch. Fitch's website address is http://www.fitchratings.com.

American Business Financial Services Inc., Bala Cynwyd, Pa., has closed a $150 million fixed-ratemortgage loan securitization via three subsidiaries. ABFS Mortgage Loan Trust2000-3 consists of Class A-1 notes carrying a coupon of 7.61%. Prudential Securities was the sole manager of thedeal. The company's three subsidiaries are American Business Credit Inc., Upland Mortgage, and New Jersey Mortgageand Investment Corp. ABFS's website address is http://www.abfsonline.com.

United Financial Inc., Denver, is brokering the sale of servicing rights on a portfolio of $52 millionof home loans from Illinois. Federal Housing Administration loans represent 86%of the portfolio. The average loan size is $69,100 and the weighted average interest rate is 8.52%. The weightedaverage age of the loans is 107.4 months. Bids are due Oct. 11.

Fiserv Inc., Brookfield, Wis., has announced the acquisition of National Flood Services Inc., Kalispell,Mont., a provider of flood policy administration services to the insurance industry. Theterms of the deal were not disclosed. NFS is a third-party administrator for companies participating in the NationalFlood Insurance Program. Fiserv is a provider of information technology to the financial industry. Its websiteaddress is http://www.fiserv.com.