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Twenty-eight classes of subprime mortgage pass-through certificates from three Residential Asset Mortgage Products transactions have been downgraded by Fitch Ratings as a result of changes to its subprime loss forecasting assumptions. Fitch also placed three RAMP classes on Rating Watch Negative and affirmed the ratings on nine other classes. The rating actions were attributed to changes in Fitch's subprime loss forecasting assumptions that "better capture the deteriorating performance of pools from 2006 and late 2005 with regard to continued poor loan performance and home price weakness." Fitch can be found on the Web at http://www.fitchratings.com.

The ratings of 131 tranches (backed by Impac-originated mortgage collateral) in 17 alternative-A securitizations from various issuers have been downgraded by Moody's Investors Service. Seventy two of the downgraded tranches remain on review for possible further downgrade, and 42 other tranches were placed on review for possible downgrade. The negative rating actions were attributed generally to higher-than-expected rates of delinquency, foreclosure, and real estate owned in the underlying collateral relative to credit enhancement levels. The collateral consists primarily of first-lien alt-A mortgage loans. Moody's can be found on the Web at http://www.moodys.com.

The Federal Deposit Insurance Corp. board of directors has decided to keep the assessment rates it charges banks and thrifts for deposit insurance unchanged for 2008 as it builds reserves to deal with more bank failures. The FDIC fund stood at 1.22% of estimated insured deposits at year-end 2007, and the agency wants the reserve ratio to reach 1.25% before the end of 2009. "We will closely monitor the progress of the fund along with the condition of the banking industry," FDIC Chairman Sheila Bair said. "As the fund reaches the 1.25% target, I expect the board to consider reducing rates to a maintenance level." The American Bankers Association contends that the FDIC has adequate reserves, and it wanted the assessments lowered. The ABA said it is "deeply disappointed" by the board's decision. "Every excess dollar pulled from bank capital into FDIC coffers means $10 of lending and related banking services that will not be available to support economic recovery," ABA executive vice president Wayne Abernathy said.

Municipal Mortgage & Equity LLC, Baltimore, has addressed strains from municipal bond market woes by entering into an agreement with Merrill Lynch Capital Services to meet future margin calls without posting additional cash as collateral. "Under the agreement, Merrill Lynch has received a security interest in MuniMae's ownership of the common shares of MuniMae TE Bond Subsidiary LLC, an entity that holds the company's housing bonds and interests in housing bonds originated by the company, in place of collateral related to margin calls," the Baltimore-based company said. MuniMae said it retained the right to terminate the agreement at any time, but it would have to do so by posting cash equal to the then-outstanding margin balance. The agreement protects MuniMae "against future margin calls up to the lesser of $100 million or 50% of the value from time to time of TE Bond Subsidiary shares as determined by Merrill Lynch," the Baltimore-based company said. MuniMae can be found online at http://www.munimae.com.

Standard & Poor's has raised its global estimate for total subprime mortgage-related securities writedowns but has indicated that "the end is in sight." S&P has increased the estimate from $265 billion to $285 billion and said that total writedowns to date "are likely past the halfway mark." A recent estimate for total mortgage writedowns from Wall Street firms and academics, in comparison, was $400 billion. But experts citing that figure said it was "very uncertain."

The outlook is stable for U.S. bank and insurance Trust Preferred Securities collateralized debt obligations, but it is negative for real estate investment trust TruPS and REIT TruPS CDOs, according to Moody's Investors Service. In an annual sector review and outlook report, Moody's said problems among REIT TruPS CDOs have largely been limited to the mortgage REIT and homebuilder areas. Some portfolios holding REIT obligations have been directly affected by the subprime crisis, the rating agency said. Meanwhile, most bank and insurance issuers in TruPS CDOs have "minimal exposure" to subprime residential mortgages, Moody's said.

A new management consulting firm, T. Hancock Consulting Group LLC, has been formed in Scottsdale, Ariz., to help financial institutions manage and dispose of their portfolios of real estate owned. "At most financial institutions, having experienced personnel to manage the cyclical management demands of their REO portfolios is not practical or economically feasible in today's environment," said Trevor Hancock, who heads the new company. "They need a partner with a comprehensive understanding of the residential building and development business."

Freddie Mac is telling its lenders that it will start purchasing "conforming jumbos" in May and that jumbo loans originated "retroactive to March 1" will be accepted for delivery. In issuing interim guidance on the new jumbo program, the secondary-market agency laid out the loan-to-value ratios on fixed- and adjustable-rate mortgages and the delivery fees. "For deliveries in the May/June timeframe, we expect to offer 90-day pricing and credit coverage for newly originated conforming jumbos using a guarantor execution," Freddie Mac said. Freddie will allow jumbo borrowers to take out $100,000 in a refinancing, but the GSE is charging a 1.0% fee, with a 50-basis-point fee on no-cash-out refinancings. Fannie Mae is limiting cash-out refinancings to $2,000. Freddie's standard delivery fee for a fixed-rated mortgage is 25 bps, and 75 bps for a jumbo ARM. But a jumbo ARM with an LTV ratio above 80% would have a 1.50% fee.

Investment fund Carlyle Capital Corp. Ltd. says it expects its lenders to "promptly" seize substantially all its remaining assets as a result of margin calls linked to a slump in the prices of top-rated agency mortgage-backed securities. The fund had tried to negotiate with its lenders, but it said those negotiations "deteriorated late on March 12 when, among other things, the pricing service utilized by certain lenders reported a drop in the value of [residential] MBS collateral that is expected to result in additional margin calls of $97.5 million." Through March 12, the company had defaulted on $16.6 billion of indebtedness. "Overall, it has become apparent to the company that the basis on which lenders are willing to provide financing against the collateral has changed so substantially that a successful refinancing is not possible," the fund said.

Eighty-four tranches from 11 alternative-A transactions issued by Countrywide in 2006 have been downgraded by Moody's Investors Service. Forty-four of the downgraded tranches remain on review for possible further downgrade, and 52 other tranches were placed on review for possible downgrade. The negative rating actions were attributed, in general, to higher-than-expected rates of delinquency, foreclosure, and real estate owned in the underlying collateral relative to credit enhancement levels. The collateral consists primarily of first-lien, fixed- and adjustable-rate, alt-A mortgage loans. Moody's can be found on the Web at http://www.moodys.com.