Servicing

FirstFed Financial Corp., Santa Monica, Calif., has announced that it expects to make a $20-23 million provision for loan losses for the fourth quarter, more than quadrupling the $4.5 million provision recorded in the third quarter, as a result of rising single-family loan delinquencies. The company said single-family loans 30-90 days delinquent rose to approximately $237 million by Dec. 31, up from $72 million as of Sept. 30. "Adjustable-rate mortgages that have reached their maximum allowable negative amortization, which now require an increased payment, are a contributing factor in the higher level of delinquent loans," the company said.

The Federal Deposit Insurance Corp. has hired First Financial Network Inc. to market and sell $40 million in residential mortgage loans from the failed Miami Valley Bank. The Lakeview, Ohio, bank had $86.6 million in assets when the FDIC closed it in October, transferred all the insured deposits to a local bank, and retained all the assets. FFN president and chief executive Bliss Morris said she expects due diligence to begin in February, and the bid date will be in early March. "We are pleased to assist FDIC with this assignment," Ms. Morris said. "We have proven our ability to transact sales of this nature on behalf of FDIC and look forward to another successful portfolio offering." Based in Oklahoma City, FFN has an online loan trading platform that provides qualified investors with immediate access to due-diligence information.

ForeclosureRadar.com, Discovery Bay, Calif., has noted a substantial month-to-month jump of 45.4% in California's notices of default. The number of NODs in December was 32,948 compared to 22,665 in November, according to the company's California Foreclosure Report. December auction sales increased by 4.1% from November, to a total of 12,783 properties with a loan value of $5.18 billion dollars. Additionally, a total of 9,001 properties have been sold at auction in just the first eight business days of January, with daily average sales 76% higher than in December. "The impact of the credit crisis that began in August is now clearly starting to show its impact," said ForeclosureRadar founder Sean O'Toole. "Many analysts fail to understand the delays inherent in the foreclosure process, and I believe we have yet to see the real impact from the ARM resets that began in earnest last October." The majority of loans going to auction continue to have been originally made in 2006 (52%), 2005 (34%), 2007 (8%) and 2004 (5.4%). At the county level, notable month-to-month increases in activity were seen in Riverside, San Bernardino, San Diego, Ventura, Orange, Los Angeles, Santa Cruz, Marin and San Francisco counties. ForeclosureRadar can be found online at www.foreclosureradar.com.

JPMorgan Chase took a $1.3 billion writedown on the value of its subprime positions in the fourth quarter, including marks against its collateralized debt obligation portfolio. JPM -- which has been relatively unscathed by the subprime crisis (up until now) -- said it increased its loan loss allowances by $395 million in the quarter because of anticipated mark downs on high loan-to-value mortgages, including home equity loans. Even though JPM wrote down the value of its subprime CDOs, its mortgage banking division had net income of $332 million, it said. Its mortgage business was helped, in part, by a $499 million upward adjustment in the value of its mortgage servicing rights. Overall, the bank/investment bank earned $124 million in the quarter, an 88% drop from the same period last year.

FirstFed Financial Corp., Santa Monica, Calif., has announced that it expects to make a $20-23 million provision for loan losses for the fourth quarter, more than quadrupling the $4.5 million provision recorded in the third quarter, as a result of rising single-family loan delinquencies. The company said single-family loans 30-90 days delinquent rose to approximately $237 million by Dec. 31, up from $72 million as of Sept. 30. "Adjustable-rate mortgages that have reached their maximum allowable negative amortization, which now require an increased payment, are a contributing factor in the higher level of delinquent loans," the company said.

The Federal Deposit Insurance Corp. has hired First Financial Network Inc. to market and sell $40 million in residential mortgage loans from the failed Miami Valley Bank. The Lakeview, Ohio, bank had $86.6 million in assets when the FDIC closed it in October, transferred all the insured deposits to a local bank, and retained all the assets. FFN president and chief executive Bliss Morris said she expects due diligence to begin in February, and the bid date will be in early March. "We are pleased to assist FDIC with this assignment," Ms. Morris said. "We have proven our ability to transact sales of this nature on behalf of FDIC and look forward to another successful portfolio offering." Based in Oklahoma City, FFN has an online loan trading platform that provides qualified investors with immediate access to due-diligence information.

Fourteen tranches from 3 deals issued by MASTR Adjustable Rate Mortgages Trust in 2007 have been downgraded by Moody's Investors Service, and seven tranches have been placed under review for possible downgrade. The negative rating actions were based on 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 alternative-A mortgage loans.

Sixteen tranches from four deals issued by Bank of America in 2007 have been downgraded by Moody's Investors Service, and 14 tranches have been placed under review for possible downgrade. Moody's said the negative rating actions were based on 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 alternative-A mortgage loans.

Thirty-seven certificates from 14 mortgage-backed securitizations issued by AMSI and ARSI have been downgraded by Moody's Investors Service. Moody's also placed 12 certificates from the deals on review for possible downgrade. The negative rating actions were based on an analysis of the credit enhancement levels provided by excess spread, overcollateralization, and subordinate classes relative to stressed estimates of future losses, Moody's said. The AMSI and ARSI transactions were backed by loans originated by Ameriquest Mortgage Co. and Argent Mortgage Co., respectively. The rating agency can be found online at http://www.moodys.com.

Thornburg Mortgage Inc., Santa Fe, N.M., has announced the pricing of concurrent public offerings of 7 million shares of common stock and 8 million shares of an existing series of preferred stock. The common stock was priced at $8.00 per share, and the 10% series F cumulative convertible redeemable preferred stock was priced at $19.50 per share. Aggregate net proceeds from the offerings totaled $200.8 million. Thornburg said it intends to use the majority of the net proceeds to finance the acquisition or origination of adjustable-rate mortgage assets, with the remainder to be used for liquidity needs and working capital. The company has granted underwriters two options to cover any overallotments: a 30-day option to buy up to 1.05 million additional shares of common stock, and a 10-day option to buy up to 1.20 million additional shares of the preferred stock. The joint book-running managers for the offerings are UBS Investment Bank and Friedman, Billings, Ramsey. The company can be found online at http://www.thornburgmortgage.com.