Servicing

The Consumer Credit Counseling Service of Greater Atlanta has announced plans to hire approximately 45 new housing managers and counselors to help homeowners nationwide avoid foreclosure. The nonprofit agency said the hirings would be part of a larger effort to hire 130 new employees, including credit and bankruptcy counselors and customer service representatives. They will work in the agency's offices in downtown Atlanta and Duluth, Ga. CCCS can be found on the Web at http://www.cccsinc.org.

First Florida Financial Group, Fort Myers, Fla., has announced the launch of DeadDeals.net, which purchases qualified "unclosable" mortgage and foreclosure leads from mortgage brokers and loan officers in Florida. DeadDeals.net pays from $50 to $500 for each lead, and its CashToolBox.com program fixes mortgage application problems that are preventing a loan approval and closing, First Florida said. Eddie Hoskins, president and chief executive officer of First Florida, said the new division enables mortgage professionals "to make some money on a deal where previously there was no revenue." The division can be found on the Web at http://www.deaddeals.net.

PHH Corp., a provider of mortgage services based in Mt. Laurel, N.J., has announced the receipt of a $50 million reverse termination fee from Blackstone Capital Partners V LP in connection with the recent termination of a merger pact between PHH and General Electric Capital Corp. Under the agreement, Blackstone was to acquire PHH's mortgage banking business from General Electric. PHH said it has agreed to pay up to $4.5 million of the fees of third-party consultants retained by Blackstone in connection with the terminated transactions and will receive the work product the consultants provided to Blackstone. PHH can be found online at http://www.phh.com.

The default rate on subprime mortgages jumped 170 basis points to nearly 19.5% in October, according to Friedman Billings Ramsey Investment Management, which cited weaker job markets and declining house prices as the causes of rapid deterioration in credit performance -- not resets. The default rate on nonagency securitized subprime mortgages jumped from 17.7% in September to 19.4% in October. And the default rate on alternative-A loans jumped 75 bps to 5.4% in October. "These substantial changes in a single month suggest that labor market conditions are worsening broadly across the United States," FBRIM managing director Michael Youngblood says in the report. "Indeed, we continue to believe that these conditions are characteristic of a recession in economic activity." The managing director of fixed-income research noted that resets of adjustable-rate subprime mortgages were not responsible for the October jump in default rates. However, the upward adjustment of mortgage rates "may drive the default of hybrid ARMs higher in the year ahead," he said. The report also shows that 8% of subprime mortgages and 2.5% of alt-A mortgages are in foreclosure. (The default rate includes loans that are 90 days or more past due, in foreclosure, or real estate owned.) FBRIM is a subsidiary of Friedman Billings Ramsey, which can be found online at http://www.fbr.com.

Moody's Investors Service has downgraded 21 classes of mortgage-backed securities from five transactions issued by RAMP in 2004. The downgrades were spurred by credit enhancement levels that may be low given the projected losses on the underlying pools, the rating agency said.

Four classes of notes and one class of preference shares issued by McKinley Funding III Ltd., a collateralized debt obligation backed partly by residential mortgage-backed securities, have been downgraded by Moody's Investors Service.The downgrades were as follows: class A-2, from Aaa to A2 (and left on review for possible further downgrade); class B-l, from Aa2 to Caa3 (and left on review for possible further downgrade); class B-2, from Aa3 to Ca; class C, from Baa2 to Ca; and preference shares, from Ba1 to Ca. Moody's said the negative rating actions reflect "severe deterioration" in the credit quality of the underlying portfolio, as well as a Dec. 10 event of default caused by the failure of the class A overcollateralization ratio to equal or exceed 100%, as required under the indenture.

Five classes of mortgage-backed securities issued by RASC trusts have been downgraded by Moody's Investors Service.The downgrades were as follows: series 2003-KS3, class M-1, from Aa2 to Baa3, and class M-2, from A2 to Ba2; and series 2003-KS6, class M-1, from Aa2 to Baa2, class M-2, from Baa1 to B1, and class M-3, from Baa2 to B2. "The actions are based on the analysis of the credit enhancement provided by subordination, overcollateralization, and excess spread relative to the expected loss," the rating agency said.

Six classes of mortgage-backed securities from RAMP series 2003-RS9 have been downgraded by Moody's Investors Service.The downgrades were as follows: class M-I-3, from Baa1 to Baa3; class M-II-1, from Aa2 to A2; class M-II-2, from A2 to Baa3; class M-II-3, from A3 to B1; class M-II-4, from Baa1 to Caa1; and class M-II-5, from Baa2 to C. "The actions are based on the analysis of the credit enhancement provided by subordination, overcollateralization, and excess spread relative to the expected loss," Moody's said. The underlying assets consist of fixed-rate mortgage loans in group I and adjustable-rate mortgage loans in group II.

Ten classes of mortgage-backed securities issued by RAMP have been downgraded by Moody's Investors Service.The affected transactions were the series 2004-KR1 and series 2004-KR2 trusts. The downgrades were driven by credit enhancement levels that may be low given the projected losses on the underlying pools, Moody's said. The rating agency can be found online at http://www.moodys.com.

Cascade Bancorp, Bend, Ore., has announced that it expects to record a real-estate-related pretax provision for credit losses of approximately $7.5 million and net chargeoffs of approximately $3.8 million for the fourth quarter.Cascade estimated that its net income will total approximately $5.4 million ($0.19 per share) for the quarter. "The softness in our real estate markets has worsened in the past quarter, putting increased pressure on cash flows of developers and builders of new homes and subdivisions," said Patricia L. Moss, Cascade's chief executive officer. The company's wholly owned subsidiary, Bank of the Cascades, can be found on the Web at http://www.botc.com.