Servicing

Seventy-three classes of subprime mortgage pass-through certificates from five issuers have been downgraded by Fitch Ratings. The affected securities were as follows: 37 classes from 18 Morgan Stanley deals; 18 classes from seven IndyMac deals; 14 classes from seven Chase deals; three classes from one Industry Mortgage Co. deal; and one class from a Metropolitan Mortgage deal. Fitch also affirmed the ratings on more than 90 classes from over 40 subprime transactions. The rating agency can be found on the Web at http://www.fitchratings.com.

New York Mortgage Trust Inc., New York, has announced the completion of all steps required for listing on the NASDAQ Stock Market. The real estate investment trust's stock began trading June 5 under the symbol NYMT. Its shares were previously quoted on the OTC Bulletin Board. The company, which invests in and manages a portfolio of mortgage loans and mortgage-backed securities, can be found online at http://www.nymtrust.com.

GMAC Financial Services, New York, and its wholly owned subsidiary, Minneapolis-based Residential Capital LLC, have announced a global refinancing totaling more than $60 billion that they termed one of the largest ever completed. In a series of transactions, the companies extended and expanded key bank facilities and ResCap extended the maturities of unsecured debt, renewed "critical funding lines," and boosted its liquidity support from GMAC. The global refinancing included over $60 billion of refinanced debt and new facilities involving the participation of more than 50 institutions from around the world, the companies reported. GMAC provided a $3.5 billion, two-year credit facility to ResCap that includes $750 million of first-loss protection from General Motors Corp. and Cerberus Capital Management LP, which owns a majority interest in GMAC. In addition, the refinancing includes $2.4 billion of actions by GMAC and Cerberus to support ResCap's near-term liquidity. (ResCap said in a recent public filing that it might need $1.4 billion in additional liquidity by June 30 because of "the inability to consummate certain asset sales, due to adverse conditions.") The companies can be found on the Web at http://www.gmacfs.com and http://www.rescapholdings.com.

The number of loans entering foreclosure and in foreclosure, in addition to the number of loans more than 30 days delinquent, all reached record highs in the first quarter, according to the Mortgage Bankers Association. The MBA's quarterly delinquency survey showed that overall, 8.82% of loans were at least 30 days past due or in foreclosure during the first quarter. When the foreclosure inventory of 2.47% is considered separately, 6.35% of loans were at least 30 days past due. The foreclosure inventory rose 43 basis points from the level of the fourth quarter of 2007 and 119 bps from that of one year earlier. That means the number of loans in foreclosure is nearly double what it was a year earlier. Loans entered foreclosure at a 0.99% rate in the first quarter. Jay Brinkmann, the MBA's vice president for research and economics, said the deterioration in credit quality was largely driven by certain loan products in certain states. Specifically, subprime adjustable-rate mortgage loans, which accounted for 39% of foreclosures started in the first quarter, helped push up foreclosure and delinquency rates. Two states, California and Florida, also continued to drive up national delinquency and default figures, Mr. Brinkmann said. The MBA can be found online at http://www.mortgagebankers.org.

Seventeen classes in 12 net-interest-margin mortgage securities from three issuers have been downgraded by Fitch Ratings. The affected securities were as follows: nine classes from seven First Franklin NIM issues; seven classes from four Park Place Securities Inc. NIM Trust issues; and one class from a Merrill Lynch Mortgage Investors NIM Trust issue. The rating agency said the actions "reflect actual pay-down performance of the NIM securities to date compared to initial projections, as well as changes that Fitch previously made to its subprime loss forecasting assumptions for the underlying transactions."

Franklin Credit Management Corp., Jersey City, N.J., has announced an agreement under which it will service approximately $245 million in home equity lines of credit for Bosco Credit LLC. Franklin Credit said the HELOC loans were acquired on May 28 by Bosco, which is owned and controlled by Thomas J. Axon, chairman of Franklin Credit. "This represents a major step forward for our company in the execution of its business strategy targeting the provision of services for third parties on a fee-paying basis," said Gordon Jardin, Franklin Credit's chief executive officer. The company can be found on the Web at http://www.franklincredit.com.

Debt Settlement USA, Phoenix, has announced the introduction of the Consumer Debt Index, which the company says indicates a slowdown in the rise of the mortgage delinquency rate in recent quarters. The CDI stood at 11.76 in the first quarter, up from 9.60 in the second quarter of 2007, Debt Settlement said. But the mortgage delinquency rate rose only 11% in the first quarter after rising 20%-25% in the third and fourth quarters, according to the company. The consumer loan delinquency rate fell during the first quarter after rising about 10% in the third and fourth quarters. Debt Settlement said the CDI is based on a combination of the Consumer Price Index and the following statistics calculated by the Federal Reserve Board: the mortgage delinquency rate, consumer credit outstandings, and the unsecured consumer loan delinquency rate.

Standard & Poor's has lowered certain ratings of Lehman Brothers, Merrill Lynch & Co., and Morgan Stanley after the completion of a global securities industry review. Lehman Brothers Holdings Inc.'s long-term rating has been lowered from A-plus to A, and the counterparty credit ratings of Merrill Lynch & Co. and Morgan Stanley have been lowered from A-plus/A1 to A/A1. S&P analysts cited "concern that the pace and extent of earnings improvement could be considerably more muted than we previously assumed" in the downgrades. S&P can be found on the Web at http://www.standardandpoors.com.

Ginnie Mae guaranteed $22 billion in mortgage-backed securities in May, and the secondary-market agency will face "issues" such as possible understaffing as MBS issuance continues to increase, according to the president's nominee to head the agency. Joseph Murin told the Senate Banking Committee at his confirmation hearing that Ginnie Mae has only 65 full-time employees, and he indicated that the agency will have to face those issues as time goes on and issuance increases. The former president of Mortgage Settlement Network also testified that legislation "is needed" to expand the Federal Housing Administration program and help more struggling homeowners. He pledged that Ginnie Mae will "act diligently" to achieve the best execution of those securitizations. "If it is enacted, I think the investor community will embrace it, from what I am told and what I see," Mr. Murin said. President Bush nominated Mr. Murin to be the new Ginnie Mae president back in October. Ginnie can be found on the Web at http://www.ginniemae.gov.

Two classes from Argent Net Interest Margin 2006-M1 have been downgraded by Fitch Ratings. Class N1 was downgraded from BB to C/DR6, and class N2 was downgraded from B to C/DR6. "The rating actions reflect actual pay-down performance of the NIM securities to date compared to initial projections, as well as changes that Fitch previously made to its subprime loss forecasting assumptions for the underlying transactions," the rating agency said.