Servicing

Since August, financial institutions across the globe have written down the value of their nonprime mortgage assets by about $94 billion, according to a new tally done by Friedman, Billings, Ramsey & Co. FBR noted that in addition to the writedowns, financial institutions -- including depositories -- have taken $14.7 billion in what it calls "elevated loss provisions." FBR estimated that banks could suffer $59 billion to $148 billion of losses on their portfolios over the next few years. It says banks that had high concentrations of subprime and alternative-A loans, payment-option adjustable-rate mortgages, home equity lines of credit, and other nontraditional loans will suffer the most. The company can be found online at http://www.fbr.com.

Fannie Mae says it will reimburse its servicers for referring homeowners who are behind on their mortgage payments to the HOPE Hotline for foreclosure prevention counseling. "We believe in these difficult times, independent counseling agencies can play a unique role by helping servicers to help borrowers find more opportunities to avoid foreclosure and keep their homes," said Fannie vice president Jason Allnutt. Servicers should contact their Fannie account representative for more details, the giant secondary-market agency said. The toll-free HOPE Hotline, at 1-888-995-HOPE, is open 24 hours a day and allows troubled borrowers to talk with an independent housing counselor. Fannie Mae can be found on the Web at http://www.fanniemae.com.

Servicers participating in the Hope Now alliance are working at an "intense pace" to implement streamlined processes for loan modifications and refinancings, according to Treasury Secretary Henry Paulson, who said he wants to see tangible results in a few weeks. "We expect most servicers to begin fast-tracking borrowers in the next few weeks," Mr. Paulson told the New York Society of Securities Analysts. Fast-tracking is supported to move troubled borrowers into refinances and interest rate freezes quickly. The secretary said he wants servicers to "fully implement connections" to the Federal Housing Administration and other lenders to facilitate refinancings. The Treasury secretary also stressed that the alliance members need to develop a standard reporting process to monitor their progress. "We need to see all the servicers reporting results to Hope Now to measure effectiveness and then to make adjustments as needed," Mr. Paulson said. Outreach efforts by Hope Now have prompted 45,000 borrowers who are facing possible foreclosure to contact their servicers for assistance.

Class B-5 of Wells Fargo Alternative Loan Trust series 2005-1 has been placed on Rating Watch Negative by Fitch Ratings. Fitch also affirmed the ratings on 16 other classes in three Wells Fargo transactions. The negative rating action was attributed to deterioration in the relationship between credit enhancement and expected losses. The underlying collateral consists of conventional first mortgage loans. Fitch can be found online at http://www.fitchratings.com.

Two classes of Wells Fargo mortgage pass-through certificates have been downgraded by Fitch Ratings, and five classes have been placed on Rating Watch Negative. Class B-5 of Wells Fargo 2006-15 has been downgraded from B to CCC/DR2, and class II-B-5 of Wells Fargo 2006-AR18 group 2 has been downgraded from B to CCC/DR2. The securities placed on Rating Watch were class B-4 of Wells Fargo 2006-15; class B-5 of Wells Fargo 2006-18; class I-B-5 of Wells Fargo 2006-AR18 group 1; class II-B-4 of Wells Fargo 2006-AR18 group 2; and class B-5 of Wells Fargo 2006-AR19. The rating agency also affirmed the ratings on 49 other classes from 10 Wells Fargo transactions. The negative rating actions reflect deterioration in the relationship between credit enhancement and loss expectations, Fitch said. The collateral consists of prime adjustable-rate mortgage loans secured primarily by one- to four-family residential properties.

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.

Astoria Financial Corp. "may actually benefit from the mortgage turmoil" and is a good buy for value investors, according to Zacks.com. In its Jan. 4 list of Zacks Rank Buy Stocks, the research firm said Astoria may benefit from the turmoil because it doesn't have to sell loans. "Rather, it keeps them in a portfolio while many other banks are going out of business," Zacks said. "The stock is attractively priced at 13.7 times 2008 [earnings] estimates." Every day, Zacks.com highlights four stocks based on how well they match the criteria for four kinds of investing: aggressive growth, growth and income, momentum, and value. The research company can be found online at http://www.zacks.com.

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.