Servicing

TierOne Corp., the holding company for TierOne Bank, Lincoln, Neb., has announced that it will close all nine of its loan production offices across the country. The company said the goal of the closures is to direct its lending activity to its primary market area of Nebraska, Iowa, and Kansas. The lending offices being closed are located in Phoenix; Colorado Springs, Denver, and Fort Collins, Colo.; Orlando, Fla.; Minneapolis; Las Vegas; and Charlotte and Raleigh, N.C. Loans with existing customers will continue to be serviced by TierOne, the company said. The bank can be found on the Web at https://www.tieronebank.com.

CIT Group, New York, has cut a deal to sell its residential subprime business -- including a $9 billion servicing portfolio -- to Lone Star Funds for $1.5 billion in cash and the assumption of $4.4 billion in debt. Among subprime servicers, CIT ranks 18th nationwide, according to the Quarterly Data Report. In a separate transaction, CIT agreed to sell a $470 million manufactured housing portfolio to Vanderbilt Mortgage and Finance for $300 million. CIT said the two sales will bring in $1.8 billion in cash. Even so, it will book a $2.5 billion pretax loss in the second quarter.

Bank of America, Charlotte, N.C., has announced the completion of its acquisition of Countrywide Financial Corp., Calabasas, Calif., creating the nation's largest mortgage originator and servicer. In January, BoA agreed to buy Countrywide for $4 billion in stock, but as the Charlotte bank saw its share price fall this year, so did the value of the deal. The final sale price is in the range of $2.5 billion, on top of the $2 billion that BoA paid last summer for a 16% stake in Countrywide. (At one time Countrywide had a market capitalization of $25 billion.) BoA said it will focus on "responsible home lending" and plans to offer a variety of first-lien mortgages but no subprime loans. It will also discontinue offering payment-option adjustable-rate mortgages, the company said. Among the first-lien mortgages the company says it will offer are: conforming loans underwritten to standard guidelines of the government and the government-sponsored enterprises; nonconforming loans with terms "expected to produce no greater risk of default than conforming loans"; interest-only mortgages subject to a 10-year minimum IO period; and fixed-period ARMs that provide low initial rates with fixed payments. The company can be found online at http://www.bankofamerica.com.

Fitch Ratings has placed the issuer default ratings of Wachovia Corp. and its subsidiaries on Rating Watch Negative. The current AA-/F1-plus IDRs are in jeopardy because of "continued headwinds facing U.S. consumer asset quality and indications of further meaningful home price deterioration in certain markets," Fitch said. The rating agency noted that Wachovia built its loan loss reserve to $2 billion in the first quarter of 2008, but this amount represented only 1.2% of Wachovia's $170 billion residential mortgage portfolio. Moreover, payment-option adjustable-rate mortgages constitute $122 billion of the portfolio, and 58% of those option ARMs are from California, where home prices have been falling.

First BanCorp, San Juan, Puerto Rico, has announced the termination of a cease-and-desist order by the Federal Reserve Board related to mortgage-related transactions with Doral Financial Corp. and R&G Financial Corp., both of San Juan. Under the order, dated March 16, 2006, First BanCorp took actions that brought about "a substantial reduction of the credit risk concentration" in connection with loans to Doral and R&G, First BanCorp said. The Fed's order "was the last remaining regulatory action imposed on the corporation as a result of the restatement process, and as of today all regulatory orders previously imposed have been terminated," said Luis M. Beauchamp, First BanCorp's chairman and chief executive officer. The pertinent mortgage transactions were initially reported as loan purchases by Doral and R&G, but it was later determined that they should have been accounted for as secured loans because they were not true sales.

Hilco Real Estate LLC, Chicago, has announced the formation of Hilco Residential Partners LLC, a residential real estate investment fund chartered to purchase distressed residential properties and debt. The size of the investment fund, a joint venture with Chicago-based Real Estate Principal Solutions LLC, was not disclosed. Hilco said three classes of distressed assets will be acquired from lenders: real estate owned portfolios of single-family and multifamily properties, condominiums, and senior housing; closeout units in a residential development; and nonperforming notes on single-family and multifamily projects. "Our goal is to provide immediate balance sheet relief for lenders and eliminate their further involvement with the costs of real estate ownership," said Navin Nagrani, vice president of Hilco Real Estate. "Our nationwide property management and marketing infrastructure enables us to monetize acquired assets more quickly and with less cost, which means the fund can pay more for distressed portfolios." Hilco can be found online at http://www.hilcorealestate.com.

Financial Freedom has issued the first Ginnie Mae securitization with reverse mortgages tied to the London interbank offered rate, along with the first two fixed-rate reverse mortgage-backed securities. The three issues totaled $281 million. Financial Freedom, a subsidiary of Indymac Bank, specializes in reverse mortgage lending and is one of the largest originators of Federal Housing Administration-insured reverse mortgages, which are called Home Equity Conversion Mortgages. "The fixed-rate and LIBOR [reverse MBS] are important next steps in the evolution of the secondary market for reverse mortgages," said Ginnie Executive Vice President Michael Frenz. Issuers like Goldman Sachs and Financial Freedom have securitized $648 million in FHA reverse mortgages since Ginnie launched its reverse MBS program in September 2007. Ginnie Mae, a government-owned corporation within the Department of Housing and Urban Development, can be found online at http://www.ginniemae.gov.

Fitch Ratings has announced the withdrawal of all its ratings on two bond insurers, MBIA Inc. and Ambac Financial Group Inc., and their related entities. Fitch said it will also withdraw all ratings based on insurance policies from the companies' insurance subsidiaries, MBIA Insurance Corp. and Ambac Assurance Corp. The announcement followed decisions by MBIA and Ambac "to cease providing substantive nonpublic portfolio information used in Fitch's capital analysis model, to discontinue previous full interactive dialogue with Fitch analysts, and to request withdrawal of Fitch's ratings," the rating agency said. Fitch said the timing was also prompted by many "key credit issues," negative rating actions by Standard & Poor's Ratings Services and Moody's Investors Service that affect the companies' business prospects, and the companies' "reactive strategic and capital management planning." Fitch said it will consider reinstating coverage and assigning new ratings based only on public information if there is sufficient investor interest.

Lend America, a privately owned, direct-to-consumer lender based in Melville, N.Y., says it has received approvals to issue Ginnie Mae mortgage-backed securities. Lend America chief operating officer Helene Decillis said the approval will allow the lender to obtain "better prices for our mortgages in the secondary market, thereby funding our ability to create additional loans to qualified, potential homeowners with more competitive terms." Lend America has specialized in Federal Housing Administration lending for several years. When the market turned in the FHA's favor, its business increased dramatically. Lend America can be found on the Web at http://www.lendamerica.com, and Ginnie Mae can be found at http://www.ginniemae.gov.

ForeclosurePoint, Bellevue, Wash., has announced the nationwide launch of ForeclosurePoint.com, which it calls the only national foreclosure marketplace offering free access to full street addresses of more than 1.2 million foreclosure properties in the United States. Other foreclosure websites make users pay to see data that ForeclosurePoint.com provides free, the company said. "Below-market deals are virtually everywhere, but consumers still have a difficult time accessing the market," said Prakash Kondepudi, the company's president and chief executive officer. "Until today, investors, homebuyers, and real estate professionals had to pay to see even basic information about potential foreclosure opportunities." The company, based in the Seattle area, can be found on the Web at http://www.foreclosurepoint.com.