Servicing

Four of Countrywide Financial Corp.'s top executives -- except company chairman and chief executive Angelo Mozilo -- are entitled to millions of dollars in retention grants as part of the lender's sale to Bank of America. According to a new filing with the Securities and Exchange Commission, Ranjit Kripalani, Countrywide's managing director of capital markets, is entitled to the most ($2.5 million), followed by president/chief operating officer David Sambol ($1.9 million), chief financial officer Eric Sieracki ($1.5 million), and banking chief Carlos Garcia ($1.45 million). Mr. Mozilo is expected to leave the company once BoA takes over, or even sooner. Mr. Sambol, who currently serves as president, is considered Mr. Mozilo's successor. The board, chaired by Mr. Mozilo, approved the retention grants.

Class B-3 of Bayview Financial series 2005-D mortgage pass-through certificates has been downgraded from BBB-minus to BB by Fitch Ratings and placed on Rating Watch Negative. In addition, class B-2 of series 2005-D and class B-3 of series 2005-C were placed on Rating Watch Negative, and class 1-A5 of series 2005-D and class 1-A5 of series 2005-B were removed from Rating Watch Negative. Fitch also affirmed the ratings on 36 classes in the three Bayview transactions. The negative rating actions were attributed to deterioration in the relationship between credit enhancement and expected losses. Fitch said the collateral consists of fully amortizing and balloon loans secured by senior liens on residential, commercial, multifamily, and mixed-use properties.

Fifty-seven classes from 10 issues of Countrywide alternative-A mortgage-backed securities transactions have been downgraded by Fitch Ratings. In addition, Fitch placed four classes on Rating Watch Negative and affirmed the ratings on 16 other classes in the transactions. The negative rating actions were attributed to deterioration in the relationship between credit enhancement and loss expectations. The collateral consists chiefly of first-lien, alternative-A mortgage loans.

Astoria Financial Corp., Lake Success, N.Y., has announced that it will record an after-tax noncash impairment charge of $13.3 million in the fourth quarter to reduce the carrying amount of its investment in certain Freddie Mac preferred stock issues. The two issues of perpetual preferred stock, held in Astoria's available-for-sale securities portfolio, will be written down to their market value of $83 million as of Dec. 31, the company said. "The decision to reclassify the unrealized mark-to-market loss on these investment-grade securities to an other-than-temporary impairment charge is based on the significant decline in the market value of these securities caused by Freddie Mac's recently announced negative financial results, capital raising activity, and the unlikelihood of any near-term market value recovery," Astoria said. Astoria Financial, the holding company for Astoria Federal Savings and Loan Association, can be found online at http://www.astoriafederal.com.

First Horizon National Corp., Memphis, has reported that its mortgage business lost $263 million (pretax) in the fourth quarter, reflecting reductions to its servicing assets and impairment charges. Overall, the bank lost $399 million in the quarter. Like many banks heavily involved in residential finance, First Horizon has been stung by the nation's mortgage crisis and housing downturn. It has moved to cut staff and close production channels. In the fall, First Horizon announced job cuts of 1,500 mortgage workers and the closure of 50 offices. First Horizon can be found online at http://www.firsthorizon.com.

Raising the Fannie Mae and Freddie Mac loan limit to $625,000 as part of a stimulus package could help 140,000 to 210,000 families escape foreclosure, increase home sales, and boost economic activity by $42 billion, according to the National Association of Realtors. "We believe that any stimulus package must address housing issues and increasing the conforming loan limits for these two government-sponsored enterprises," NAR president Dick Gaylord said. Congress and the Bush administration are trying to put together a $100-150 billion stimulus package that features mainly tax rebates for consumers and accelerated writeoffs for businesses. President Bush called for quick passage of a Federal Housing Administration reform bill on Friday in discussing his approach to a stimulus package. But he did not mention the GSEs. The Realtors want the GSE loan limit raised from $417,000 to $625,000 to address the lack of liquidity and the high interest rates in the jumbo mortgage market. "This is the quickest way to help the hurting housing market," Mr. Gaylord said.

Moody's Investors Services has downgraded certain ratings from several option ARM deals, citing in each case a combination of methodology updates and performance concerns. Issuers with some ratings affected by delinquencies or the effect of the methodology update on nondelinquent portions of the transactions include American Home, CWALT Inc. (Countrywide), GreenPoint Mortgage Funding Trust, Lehman XS Trust, and Residential Accredit Loans Inc. Moody's can be found online at http://www.moodys.com.

Ninety classes from 19 issues of Residential Accredited Loans Inc. mortgage-backed securities have been downgraded by Fitch Ratings. In addition, Fitch placed four classes on Rating Watch Negative, removed nine classes from Rating Watch Negative, and affirmed the ratings on 26 other classes in the transactions. The negative rating actions were attributed to deterioration in the relationship between credit enhancement and loss expectations. The collateral consists chiefly of first-lien, alternative-A mortgage loans.

MFA Mortgage Investments Inc., New York, has announced the pricing of 25 million shares of MFA stock at $9.25 per share. Net proceeds are expected to total approximately $220 million. The company said it has granted the underwriters an option to buy up to 3.75 million additional shares to cover any overallotments. UBS Investment Bank, Bear Stearns & Co., Deutsche Bank Securities, and Morgan Stanley are the joint book-running managers of the offering. MFA, a real estate investment trust that invests in hybrid and adjustable-rate mortgage-backed securities, can be found online at http://www.mfa-reit.com.

Deerfield Capital Corp., Chicago, has announced that it will take a noncash charge of $75.5 million in the fourth quarter related to approximately $3.4 billion of residential mortgage-backed securities, and a $14.6 million charge linked to its asset-backed securities. Deerfield, a real estate investment trust, also reported sales of approximately $1.5 billion of available-for-sale RMBS in the fourth quarter to reduce leverage and maintain adequate liquidity. The company said it plans to carry its entire RMBS portfolio at fair value in 2008.