Servicing

Eight classes of subprime mortgage pass-through certificates from two issuers were downgraded by Fitch Ratings on June 9. The affected securities were as follows: seven classes from two Option One deals, and one class from a Long Beach deal. Fitch also affirmed the ratings on over 60 classes from 29 subprime transactions.

Six attorneys general have stood out for their creative leadership and aggressive response to the nation's foreclosure crisis, according to a new report from ACORN. The organization said these AG's -- Connecticut's Richard Blumenthal, Massachusetts' Martha Coakley, New York's Andrew Cuomo, Illinois' Lisa Madigan, Iowa's Tom Miller, and Minnesota's Lisa Swanson -- earned A-plus grades for actively seeking real data from mortgage servicing companies, pursuing cutting-edge cases against the industry's bad actors, speaking out on matters of state and federal importance, and putting their offices to work for distressed borrowers. ACORN -- the Association of Community Organizations for Reform Now -- says these AGs are cracking down on rescue scams and pushing the industry to perform better. ACORN collected examples of the work done by all 51 attorneys general and has recommended best practices and strategies used by the AGs. The report lists 18 attorneys general who earned A's, six with B's, eight with C's, one with a D, 12 with F's, and six with Incompletes.

Residential Finance Corp., a nationwide mortgage lender, has announced plans to hire 75 to 100 people in the third quarter, the majority of them to fill positions in the company's Columbus, Ohio, headquarters and its office in Tampa, Fla. "The slowdown in the housing market has put more than 200 U.S. lending operations out of business, leaving nearly 1,000 talented mortgage professionals jobless in Ohio, and even more in Florida," said company president Michael Isaacs. "We'd like to invite those seasoned loan officers with extensive mortgage banking experience and a commitment to excellence to give us a call." Residential Finance said its mortgage professionals receive 25 hours of intense mortgage training, including team training in its proprietary "incubator," a simulated classroom environment where experienced trainers provide additional training support. The company can be found online at http://www.myrfc.com.

Lehman Brothers expects to see a net loss of $2.8 billion in its fiscal second quarter (which included the extreme market dislocation seen in March) but says it was able to make progress in reducing troubled residential and commercial mortgage exposures during the quarter. The company also estimates that it will take a $3.7 billion net loss for mark-to-market adjustments on partially mortgage-related holdings for the quarter ended May 31. Chairman and chief executive Richard Fuld said he was "disappointed" by the company's expected first-ever quarterly net loss, but added that he was heartened by Lehman's "strengthened balance sheet and the improvement in financial markets since March." Lehman Brothers can be found on the Web at http://www.lehman.com.

Sixty-three classes of subprime mortgage pass-through certificates from nine issuers were downgraded by Fitch Ratings on June 6. The affected securities were as follows: 17 classes from nine Delta Funding deals; 10 classes from four Asset-Backed Securities Corp. deals; eight classes from three First Franklin Mortgage Loan Trust deals; seven classes from three CDC Mortgage Capital Trust deals; six classes from two Wilshire deals; four classes from one Ameriquest Mortgage Securities deal; four classes from two Equity One deals; four classes from two Ameriquest Mortgage Securities Inc. deals; and three classes from one CSFB deal. Fitch also affirmed the ratings on over 70 classes from 41 subprime transactions.

The commercial mortgage-backed securities special servicer rating of CWCapital Asset Management LLC has been upgraded from CSS2 to CSS2-plus by Fitch Ratings. Fitch also affirmed the primary and master servicer ratings of CWCapital LLC at CPS2 and CMS3, respectively. The upgrade "reflects the group's highly experienced asset management staff, its robust asset management technology platform, and the company's ability to successfully manage substantial portfolio growth, as demonstrated through its favorable interaction with Fitch's CMBS surveillance group," the rating agency said. Fitch can be found on the Web at http://www.fitchratings.com.

Citizens Republic Bancorp, a bank holding company based in Flint, Mich., that provides mortgage banking and other financial services, has priced concurrent offerings of $79.6 million worth of common stock and $120.4 million worth of convertible preferred stock. The common stock offering was priced at $4 per share, and the series A contingent, convertible, perpetual, noncumulative preferred stock has a liquidation preference of $50 per share, the company reported. Citizens granted the underwriters an option to buy up to an additional 15% on each offering to cover any overallotments. The company can be found online at http://www.citizensbanking.com.

Lehman Brothers has priced a $4.0 billion offering of common stock at $28 per share. The firm also announced the pricing of a $2.0 billion public offering of 2.0 million shares of 8.75% series Q noncumulative mandatory convertible preferred stock, which have a liquidation preference of $1,000 per share. Each share will be converted, on a mandatory basis, into 30.2663 to 35.7142 shares of Lehman common stock on July 1, 2011, the company said. Lehman acted as the sole book-running manager and underwriter for the offerings. The company can be found online at http://www.lehman.com.

Freddie Mac's board of directors has announced a dividend of $0.25 per share on the corporation's voting common stock for the second quarter, unchanged from that of the previous quarter. The board also declared the following preferred stock dividends per share: $0.34 on 1996 and 1998 variable-rate stock; $0.72625 on 1997, 2001, and 2002 5.81% stock; $0.625 on 5% stock; $0.6375 on 1998 and 1999 5.1% stock; $0.6625 on 5.3% stock; $0.72375 on 5.79% stock; $0.4475 on 1999 variable-rate stock; $0.585 on January 2001 variable-rate stock; $0.29291 on March 2001 variable-rate stock; $0.645 on May 2001 variable-rate stock; $0.51 on 2006 variable-rate stock; $0.75 on 6% stock; $0.7125 on 5.7% stock; $0.8025 on 6.42% stock; $0.36875 on 5.9% stock; $0.348125 on 5.57% stock; $0.35375 on 5.66% stock; $0.37625 on 6.02% stock; $0.409375 on 6.55% stock; and $0.5234375 on 2007 fixed- to floating-rate stock. The dividends will be payable on June 30 to stockholders of record as of June 16. Freddie Mac can be found online at http://www.freddiemac.com.

Foreclosures declined in May for the second straight month, indicating that the housing picture may be brightening, according to ForeclosureS.com, a Fair Oaks, Calif.-based investment advisory firm. Foreclosures dropped 12.0% in May from the previous month's level, and the number of homeowners facing preforeclosure fell 8.9%, the company said. "The numbers support what I've been saying for a while -- the housing market is not as bad as what you hear," said Alexis McGee, president of the firm. "The market is showing signs of forming a bottom as supply catches up with demand because fewer new homes are being built and buyers are flocking back into a much more affordable market." The company can be found online at http://www.foreclosures.com.