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BankUnited Financial Corp., Coral Gables, Fla., has reported a mortgage-related net loss of $117.7 million ($3.35 per share) for the second quarter, compared with net income of $23.2 million ($0.62 per share) a year earlier. The loss was chiefly attributable to a $130 million provision for loan losses. Alfred R. Camner, the company's chairman and chief executive officer, said the quarter was "a mix of strong results from our core banking operations offset by continued deterioration in the mortgage portfolio." Mr. Camner pointed to the company's launch of a Mortgage Assistance Program to provide relief to borrowers with payment-option adjustable-rate mortgages. "We will be reaching out to thousands of option ARM borrowers, the largest portion of which are in Florida, to place them into traditional mortgage products, including government agency loans," he said. "We intend to waive prepayment fees and to create additional incentives for these borrowers to make the transition both easy and affordable." The company can be found online at http://www.bankunited.com.

Mortgage-related bond insurer Assured Guaranty Ltd., Hamilton, Bermuda, recorded $545.2 million in net income during the quarter ended June 30 but noted that the higher earnings stemmed primarily from accounting gains that are expected to fall to zero over time. Like some of its peers, the company credited an "increase in after-tax unrealized gains on credit derivatives" as the principal reason for a notable increase in net income in the most recent earnings period. "The company's credit derivatives are generally held to maturity, and management expects that the unrealized gain or loss on a credit derivative will reduce to zero as the exposure approaches its maturity date, unless there is a payment default on the exposure," Assured Guaranty said.

The Royal Bank of Scotland Group PLC took a loss of more than 690 million pounds ($1.32 billion) in the first half of the year due to massive, partially mortgage-related writedowns that were largely expected. The corporate parent of U.S. investment banking subsidiary RBS Greenwich Capital took 5.9 billion pounds ($11.3 billion) in writedowns during the period. While the writedown total roughly matched April estimates, the portion of it stemming from credit valuation adjustment exposure to monoline bond insurers was higher than expected, the company said. "The results we have published today demonstrate progress in a number of important areas, and it is all the more unsatisfactory, therefore, that they record a loss as a result of our credit market writedowns," said Fred Goodwin, the group's chief executive. "We are determined to ensure that the inherent strengths of the group's diverse business model are not obscured in this way again."

Standard & Poor's Ratings Services has downgraded its subordinated debt and preferred stock ratings on Freddie Mac from AA-minus to A-minus and its risk-to-the government rating from AA-minus to A. S&P also affirmed its senior unsecured debt rating of AAA/Stable/A-1-plus on Freddie Mac. The ratings were removed from CreditWatch Negative, but the outlook is negative. "The lower risk-to-the-government, subordinated debt, and preferred stock ratings reflect Freddie Mac's pressured capital position in the face of higher operating losses," said S&P credit analyst Victoria Wagner. "....Higher credit expenses are the driver of net operating losses, as Freddie Mac is not immune to the weak housing markets." The lower subordinated debt and preferred stock ratings reflect "heightened subordination risk," S&P said, noting that recent housing legislation creates a new regulatory structure with receivership powers that would place nonsenior creditors at a greater risk of nonpayment, especially on preferred stock dividends.

Following in Fannie Mae's footsteps, Freddie Mac is doubling its market risk delivery fee to 50 basis points, which will be added to other delivery fees currently in place starting Nov. 7. "We are increasing the Market Condition delivery fee from 25 basis points to 50 basis points," Freddie says in an Aug. 8 bulletin to lenders. Like its fellow secondary-market agency, Freddie is cushioning the delivery fee hike for borrowers with loan-to-value ratios of 85% to 95% and credit scores above 680 by reducing their existing delivery fees by 25 bps or giving them a 25-bp credit. Freddie also notified its lenders about increases in its delivery fees for investor loans and said it will stop purchasing cash-out refinancings with LTVs above 85% starting Nov. 7. In addition, the agency raised its delivery fees on A-minus loans from 3.25% to 4.00% for borrowers with lower credit scores. On Aug. 4, Fannie Mae said it would double its "adverse market" delivery fee to 50 bps effective Oct. 1. Freddie Mac can be found on the Web at http://www.freddiemac.com.

Two classes from American Home Mortgage Investment Trust's series 2007-2 group II have been downgraded by Standard & Poor's Ratings Services. Class II-A was downgraded from CCC to D, and class III-M-1 was downgraded from CC to D. "The downgrades reflect the erosion of credit support for the two classes, as of the July 25, 2008, distribution date, which we believe is attributable to the significant monthly net losses being experienced by the underlying collateral," the rating agency said.

Twelve classes from two residential mortgage-backed securities deals backed by alternative-A mortgage loan collateral issued in 2005 have been downgraded by Standard & Poor's Ratings Services. S&P also removed all the ratings from Credit Watch with negative implications and affirmed the ratings on 13 other classes. The rating agency attributed the downgrades to "our opinion that projected credit support for the affected classes is insufficient to maintain the previous ratings given the current delinquency and loss levels for these transactions and our projection of future losses." Both transactions -- Nomura Asset Acceptance Corp. Alternative Loan Trust series 2005-AR6, and RALI series 2005-QA6 -- are backed by "a significant percentage" of adjustable-rate loans with initial reset periods of three years or less, S&P said.

Sixty classes from 12 residential mortgage-backed securities deals backed by alternative-A mortgage loan collateral issued in 2005, 2006, and 2007 have been downgraded by Standard & Poor's Ratings Services. S&P also removed 41 of the ratings from Credit Watch with negative implications, affirmed the ratings on 89 other classes, and removed those ratings from Credit Watch negative. The rating agency attributed the downgrades to "our opinion that projected credit support for the affected classes is insufficient to maintain the previous ratings given our current projected losses." All the transactions are backed by fixed-rate loans or by adjustable-rate loans with initial reset periods of at least five years, S&P said.

Standard & Poor's Ratings Services has placed 206 classes from 94 U.S. cash flow and hybrid collateralized debt obligations of asset-backed securities on CreditWatch negative. S&P attributed the negative rating actions to "continued deterioration in the credit quality of the residential mortgage- backed securities backing these CDO transactions." The rating agency said 58 of the 94 affected CDOs are mezzanine structured finance CDOs collateralized substantially by RMBS and other structured finance assets rated single-A and triple-B at origination. Twenty-six are high-grade structured finance CDOs of ABS backed largely by RMBS and other structured finance assets rated single-A through triple-A at origination, and the remaining 10 are CDOs of CDOs backed chiefly by tranches from other CDO transactions, the rating agency said.

Standard & Poor's Ratings Services has lowered its ratings on 171 tranches (totaling $29.46 billion) from 43 U.S. cash flow and hybrid collateralized debt obligation transactions. The rating agency also removed 93 of the downgraded ratings from CreditWatch with negative implications and affirmed four ratings and removed them from CreditWatch negative. S&P said 27 of the affected transactions are mezzanine structured finance CDOs of asset-backed securities, which are collateralized largely by mezzanine tranches of residential mortgage-backed securities and other structured finance securities. Twelve are "high-grade" structured finance CDOs of ABS, which the rating agency defined as those backed at origination primarily by tranches of RMBS and other structured finance assets that are rated from single-A through triple-A. The other four are CDOs of CDOs backed chiefly by notes from other CDOs. The downgrades reflect various factors, including credit deterioration and recent negative rating actions on subprime RMBS securities, the rating agency said. S&P can be found on the Web at http://www.standardandpoors.com.