Servicing

First Alliance Corp., Irvine, Calif., has announced an approximately $4.5 million writedown in the value of its securitization residual interests for the second quarter.Prepayments of the company's adjustable-rate loans increased about 20% in the second quarter, First Alliance said. However, the delinquency and loan-loss experience of mortgages in First Alliance's servicing portfolio "continues to be among the lowest in the subprime sector," the company said. In other company news, First Alliance announced the appointment of Richard Taylor as legal counsel and corporate secretary. He replaces Ed Summers, who has resigned to take a post with a manufacturing company.

Thomas Glanfield has been named co-leader of Price Waterhouse LLP's asset securitization practice.Mr. Glanfield will assume the responsibilities of Shahid Quraishi, who recently resigned to join NationsBank. Mr. Glanfield will be based in the firm's Arlington, Va., office. David Baranick will continue as co-leader of Price Waterhouse's asset securitization practice in New York, focusing mainly on commercial mortgage-backed securities.

A portfolio of servicing rights on $202 million in mortgage loans from the southeastern United States is for sale.The average loan balance is $100,343 and the average note rate is 7.289% on the Freddie Mac loans. Countrywide Servicing Exchange is the broker. Bids are due by June 30.

The ratings of HomeSide Lending Inc. and HomeSide International Inc., Jacksonville, Fla., have been placed on FitchAlert with negative implications by Fitch IBCA Inc. The action followed the placement on FitchAlert-negative of the ratings of National Australia Bank Ltd., which owns the U.S. holding company whose subsidiary acquired HomeSide and HomeSide Lending in February.The rating action on NAB was, in turn, related to the placement on FitchAlert-negative of Australia's foreign currency. The affected HomeSide ratings include those on HomeSide Lending's senior medium-term notes (rated AA-minus), its commercial paper program (rated F1-plus), and HomeSide's $200 million senior secured second-priority notes due 2003 (rated A-plus).

Countrywide Credit Industries Inc., Calabasas, Calif., has reported unaudited earnings of $90.8 million for the fiscal first quarter ended May 31, 30% higher than its earnings of $70 million a year ago.Basic and diluted earnings per share were $0.82 and $0.78, respectively, up from $0.66 and $0.64. The company's board of directors declared a cash dividend of $0.08 per common share for the first quarter, payable July 31 to shareholders of record on July 15, 1998. Countrywide chief executive officer Angelo R. Mozilo said the highlight of the quarter was record fundings of $20.9 billion, up 123% from a year ago. "While this is predominantly a refinance market, purchase mortgage fundings also reached an all-time high of $9.0 billion during the quarter," Mr. Mozilo said. Subprime and home equity loans accounted for 23% of the production sector gain on sale for the quarter and 11% of the sector's pretax profits, he said. The servicing portfolio ended the quarter at $192 billion, and the servicing sector margin declined to "essentially a break-even level" because of an increase in the normal amortization of the servicing asset, Mr. Mozilo said. The company's website address is www.countrywide.com.

Fannie Mae, Freddie Mac, and the Mortgage Bankers Association of America will guarantee up to $8 million in loans to the Mortgage Electronic Registration Systems Inc., a McLean, Va., enterprise that is cooperatively owned by member firms.MERS is trying to jump-start an electronic registry for tracking ownership of mortgage loans and servicing rights. The recapitalization plan, which also includes support from participating lenders, was necessary because MERS backers underestimated how long it would take the industry to implement the electronic registry.

Principal Residential Mortgage Inc., Des Moines, Iowa, has agreed to buy ReliaStar Mortgage Corp., also of Des Moines, for an undisclosed price.ReliaStar currently is a subsidiary of ReliaStar Financial Corp., Minneapolis. The deal will give Principal a servicing portfolio of nearly $40 billion; ReliaStar currently services $7 billion. On a pro forma basis, Principal will become one of the top 20 servicers in the country, according to a list compiled by the Database Products Group of Faulkner & Gray. ReliaStar is a wholesaler with an 800-broker network nationwide. Principal is retail and correspondent lender, purchasing more than $6.1 billion from other lenders last year. Its retail network had production of $950 million.

Hamilton, Carter, Smith & Co., Beverly Hills Calif., is accepting bids on a $69 million servicing portfolio.The average loan balance is $135,000, with a weighted average interest rate of 7.52%. The original loan-to-value ratio is 63%. The loans are concentrated in Illinois. Bids are due June 25.

Delinquency rates on home equity loans and home equity lines of credit fell to two- and three-year lows, respectively, in the first quarter of 1998, according to data released by the American Bankers Association.The delinquency rate on HELs (closed-end seconds) in the first quarter was 1.30% -- an 8-basis-point drop compared with the first quarter of 1997 and a 19-bp decline from the fourth quarter. The last time the HEL delinquency rate was this low was the third quarter of 1996, when it stood at 1.29%. The delinquency rate on HELOCs fell to 0.76% in the first quarter, a 44-bp drop over the past 12 months and a 20-bp drop when compared with fourth quarter numbers. The delinquency rate for HELOCs has not been this low since the second quarter of 1995, when it was 0.75%. The ABA did not distinguish between 'A' credit and subprime borrowers in its quarterly survey. However, a spokesperson said a small portion of the loans were originated to 'B' credit borrowers.

Countrywide Servicing Exchange has a bid deadline of June 18 for three servicing deals.The first is an annual flow purchase agreement for $500 million to $1 billion of annual Fannie Mae, Freddie Mac, and Ginnie Mae servicing. The loans are primarily from California, with a small portion coming from Nevada. The average loan balance is expected to be $165,000 to $185,000. Countrywide is also selling a $135 million bulk package of Fannie Mae, Freddie Mac, and Ginnie Mae servicing with a weighted average note rate of 7.872% and an average loan balance of $90,831. Separately, Countrywide also has a $101 million Ginnie Mae portfolio for sale with the same bid deadline. The weighted average note rate is 8.675%, and the average loan balance is $64,683.