Servicing

Sixteen tranches issued from four transactions issued by C-BASS Mortgage Loan Asset-Backed Certificates have been downgraded by Moody's Investors Service. The collateral consists primarily of first-lien adjustable-rate and fixed-rate "reperforming" and seasoned mortgage loans. Moody's said the actions are part of the rating agency's wider review of all residential mortgage-backed securities. "Many 'reperforming' pools originated since 2004 are exhibiting higher-than-expected rates of delinquency, foreclosure, and [real estate owned]," the rating agency said. Moody's can be found on the Web at http://www.moodys.com.

The percentage of bank home equity lines of credit that were more than 30-days past due rose 14 basis points to 1.10% during the first quarter, according to the American Bankers Association's quarterly delinquency bulletin. That was the highest HELOC delinquency rate since 1997, although HELOC delinquencies remained lower than all other consumer credit categories. For closed-end home equity loans, the delinquency rate actually fell five basis points from the fourth quarter of last year to 2.39% in the first quarter. In addition to housing weakness, overall economic problems also weighed on consumer credit performance in the first quarter, ABA chief economist James Chessen said. "Faced with rising food and gas prices and little income growth, fewer resources have been available to manage debt."

Downey Financial Corp. - which has seen its non-performing assets rise in recent months - said it has "terminated" Frederic R. McGill as president of the holding company and its thrift affiliate, Downey Savings and Loan Association. No reason was given for his departure. Based in Newport Beach, Downey's NPAs (as a percentage of total assets) totaled 14.3% in May compared to 13.2% in April and 1.3% a year earlier. In connection with his dismissal the S&L will make a $900,000 lump sum payment to him. According to Downey, he has agreed "not to solicit any employees, consultants, customers or suppliers of the bank for a period of one year following termination of his employment." Among residential lenders Downey ranks 39th nationwide, according to the Quarterly Data Report.

Reverse Mortgage Solutions, Houston, has reported the completion of a $25 million Ginnie Mae fixed-rate home equity conversion mortgage-backed securitization on which it served as issuer, servicer, and master servicer. Bob Yeary, chief executive officer of RMS, told MortgageWire that Ginnie Mae has identified the transaction as the first reverse MBS on which a single company has taken on all three of the aforementioned roles, something the Houston-based firm's automation helped it to do. World Alliance Financial, the Melville, N.Y.-based affiliate of KBC Bank, Brussels, originated the reverse mortgages in the transaction, Mr. Yeary said.

Thornburg Mortgage, Santa Fe, N.M., has received approval to extend the deadline for completing its preferred stock tender offer to Sept. 30. Holders of approximately 93% of the contributions to an escrow agreement established as part of the conversion offer have agreed to retain their funds in escrow until the new deadline. The extension gives Thornburg more time to complete its tender offer for the preferred stock as agreed to in a March financing transaction designed to improve the company's liquidity. Under the terms of the offer, holders of four series of Thornburg's preferred stock will receive $5 in cash and 3.5 shares of common stock for each preferred share. Thornburg said that upon completion of the tender offer, the annual interest rate on its senior subordinated secured notes due in 2015 will be lowered from 18% to 12%, saving the company $69 million annually in interest payments.

Fitch Ratings is seeking comment over the next 30 days on potential new rating scales and indicators for global structured finance that would complement its existing scale. "The additional indicators are designed to improve transparency for users of SF ratings and provide market participants with additional information regarding rated securities," said Ian Linnell, head of Fitch's EMEA [Europe, Middle East, and Africa] SF rating group. "Additionally, the proposals seek to address any perceived shortcomings of SF ratings." Among Fitch's proposals are a Loss Severity rating scale at the security level to accompany traditional ratings, and the assignment of an opinion grade for the underlying collateral alongside the transaction rating. The Collateral Quality Assessment "would draw on views already developed as part of the SF rating process, but is designed to isolate opinion on collateral from opinion on the rest of the transaction structure," Fitch said. The rating agency can be found on the Web at http://www.fitchratings.com.

RealtyTrac, an Irvine, Calif.-based online marketplace for foreclosure properties, and Coldwell Banker Platinum Properties, a real estate brokerage in Orange County, Calif., have announced a strategic partnership. "Agents and brokers at Coldwell Banker Platinum Properties will have access to real-time data directly from RealtyTrac's nationwide foreclosure database, and users of Coldwell's website will also be able to access distressed properties, including properties in pre-foreclosure, auction, or bank-owned properties," said Rick Sharga, vice president of marketing at RealtyTrac. "That in turn will help drive more traffic and leads to the agent websites." The companies can be found on the Web at http://www.realtytrac.com and http://www.cbplatinumproperties.com.

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.