Servicing

Ginnie Mae has announced that Financial Freedom, a leading reverse mortgage lender and a subsidiary of IndyMac Bank FSB, has joined Ginnie Mae's Home Equity Conversion Mortgage Mortgage-Backed Securities program as an issuer. The HMBS program provides the only full-faith-and-credit vehicle and the only standardized structure for the securitization of Federal Housing Administration-insured reverse mortgages, according to Ginnie Mae. The HMBS, an accrual coupon pass-through bond, "simplifies the current structure of reverse mortgage securitizations and maximizes value for reverse mortgage lenders and borrowers," Ginnie said. The program allows issuers to securitize initial and subsequent loan draws, mortgage insurance premiums, and servicing and guarantee fees and to receive market pricing on the entire loan amount. Ginnie Mae, a government-owned corporation within the Department of Housing and Urban Development, can be found online at http://www.ginniemae.gov.

PMI Mortgage Insurance Co., Walnut Creek, Calif., has announced the formation of a homeownership preservation team led by John Jelavich, PMI's newly appointed vice president of homeownership preservation initiatives. PMI said it plans to expand its national accounts servicing team, whose primary responsibility will be to assist lenders in developing ways to help borrowers avoid foreclosure. "We're confident that providing additional manpower and resources to aid our customers will ultimately help people who have the ability to make a reasonable mortgage payment preserve their home," said Gene Campion, PMI's senior vice president of servicing operations, loss mitigation, and claims. PMI Mortgage can be found online at http://www.pmi-us.com.

Freddie Mac's single-family delinquency rate on its total portfolio of owned or guaranteed loans rose to 71 basis points in January, up from 65 bps in December and from 43 bps a year earlier. However, Freddie Mac also noted in its monthly business summary that the percentage of loans that were 60 or more days past due declined to 1 bp. That was down from 2 bps in December and 6 bps one year earlier. Freddie Mac said its total portfolio of owned or guaranteed loans increased at an annualized rate of 8.4% in February. The company purchased $47.7 billion of home loans in February, up slightly from the volume recorded in February 2007. The government-sponsored enterprise can be found on the Web at http://www.freddiemac.com.

Hedge funds and Wall Street may see up to $460 billion in credit losses before the current crisis ends, according to new Wall Street research. The figure, cited by Goldman Sachs on March 25, was noted widely in the market, according to multiple reports. "Clearly, this analysis is bearish for the financial sector," said David Ader, U.S. government bond strategist at RBS Greenwich Capital.

Moody's Investors Service has applied its "servicer quality national scale ratings" (tailored for primary servicers in local markets) to Russian servicers for the first time. Moody's rolled out servicer quality ratings in 2001 and has been offering them in parts of the "Europe, Middle East and Africa" region since 2003, but SQ NSRs are not comparable to other SQ ratings, according to Carine Kumps-Feniou, a Moody's assistant vice president-analyst. The SQ NSRs "reflect the financial stability of the servicer based on a national scale credit rating instead of a global scale credit rating" and are designed to "allow many market participants to further benchmark national servicers against each other domestically," Moody's said. The SQ NSRs apply to servicers of both residential mortgage-backed securities and asset-backed securities deals. The rating agency can be found online at http://www.moodys.com.

General Growth Properties Inc., a Chicago-based real estate investment trust, has priced a public offering of approximately 22.83 million shares of common stock at $36 per share. GGP said the offering includes 2.445 million shares being sold to MB Capital Partners III, an affiliate of Matthew Bucksbaum, GGP's chairman emeritus, and John Bucksbaum, its chairman and chief executive officer. The approximately $821.9 million of net proceeds will be used to repay GGP's revolving credit facility and other debt and for general corporate purposes, the company said. The REIT can be found online at http://www.ggp.com.

Thornburg Mortgage Inc., Santa Fe, N.M., has amended its bylaws to allow a single investor to conditionally acquire up to 30% of its voting stock in connection with a crucial private note offering it has planned. Previously, a single person could not acquire more than 10% of the company's voting stock without the approval of two-thirds of Thornburg's voting shares, according to a Securities and Exchange Commission filing. An investor who acquired more shares under the new amendment would have to provide certain assurances that include a promise to maintain the company's real estate investment trust status, which ensures that the company enjoys certain tax advantages so long as it distributes most of its income to shareholders. Thornburg has announced plans for a private placement of $1.35 billion in subordinated secured notes in which it will issue detachable warrants to purchase shares of common stock that are exercisable under certain conditions. Thornburg must raise close to $1 billion in capital soon in order to keep in place a deal with some of the counterparties involved in a potentially "material" group of margin calls on the company. Thornburg Mortgage can be found online at http://www.thornburg.com.

When the Senate takes up a foreclosure prevention bill during the first week of April, the legislative package will not include a $300 billion Federal Housing Administration program to refinance distressed homeowners, according to Sen. Charles E. Schumer, D-N.Y. Before the Easter recess, Rep. Barney Frank, D-Mass., and Sen. Christopher J. Dodd, D-Conn., unveiled a legislative proposal that would help 1 million homeowners in "underwater" mortgages refinance into affordable FHA-insured mortgages. Sen. Dodd said he would like to include the FHA proposal in the foreclosure prevention bill. But it appears that Senate leaders have nixed it. Speaking on an ABC-TV news program, Sen. Schumer said the Frank-Dodd proposal has to be "done in a careful way, and we are not proposing that" as part of the foreclosure package. The New York senator stressed that the foreclosure bill will include "modest proposals" that provide for more housing counseling, increase mortgage revenue bonds, and create a net operating loss carry-back for homebuilders. Rep. Frank, the House Financial Services Committee chairman, has scheduled an April 9 hearing on the FHA refinancing proposal.

Class M-1 of the series 1998-2 IndyMac manufactured housing contract pass-through certificates has been downgraded from CC/DR3 to C/DR4 by Fitch Ratings. Fitch also affirmed the ratings on 11 classes from three IndyMac manufactured housing transactions. The downgrade was based on deterioration in the relationship between credit enhancement and expected losses, the rating agency said. The collateral consists of fixed-rate MH installment sales contracts and installment loan agreements.

Two classes of IndyMac ABS Inc. home equity securities have been downgraded by Fitch Ratings. Class B of series SPMD 2001-C was downgraded from CCC/DR1 to CC/DR3, and class M-10 of series SPMD 2004-B was downgraded from BBB-minus to BB-plus. Fitch also affirmed the ratings on 13 classes in the two deals. The downgrades were attributed to deterioration in the relationship between credit enhancement and expected losses. The rating agency can be found online at http://www.fitchratings.com.