Servicing

One hundred and ten classes of residential mortgage-backed securities from 28 alternative-A securitizations issued by Countrywide have been downgraded by Fitch Ratings.Fitch also placed 12 CWALT classes on Rating Watch Negative, removed 18 classes from Rating Watch Negative, and affirmed the ratings on 69 classes. The negative rating actions were attributed to deterioration in the relationship between credit enhancement and expected losses. The collateral consists primarily of 30- and 15-year fixed-rate, first-lien alt-A mortgage loans.

Residential Capital LLC, the Minneapolis-based holding company for GMAC's residential lending affiliates, has again extended the early tender time for its previously announced cash tender offer for up to $750 million in aggregate principal amount of debt securities.ResCap said the new early tender time is midnight Eastern time on Dec. 19 (unless further extended by ResCap), the same as the expiration time of the tender offer. ResCap can be found on the Web at http://www.rescapholdings.com.

Citigroup, New York, has committed to providing its own support facility for its structured investment vehicles, a class of financial instruments that have generally been short of liquidity due to the U.S. subprime-mortgage-sparked global credit crunch.The company said it remains supportive of a larger multicompany effort to build an SIV support facility called the Master Liquidity Enhancement Conduit, but wanted to address its own needs immediately due to recent downgrades of its SIV senior debt ratings. SIVs often have some subprime mortgage exposure, but Citigroup said its own is "immaterial" and "indirect," totaling $51 million. The move to resolve Citigroup's uncertainty regarding senior debt repayment on its SIVs is the first major action by the company's new chief executive officer, Vikram Pandit.

Two classes of NationsLink Funding Corp.'s commercial mortgage pass-through certificates, series 1998-1, have been downgraded by Fitch Ratings.Class G was downgraded from B-plus to B, and class H was downgraded from CC/DR4 to C/DR5. In addition, Fitch affirmed the ratings on three other classes in the deal. The downgrades were attributed to an increase in expected losses as a result of recent valuations on the specially serviced assets. "As of the November 2007 distribution date, the pool's aggregate certificate balance has been reduced 85% to $153.6 million from $1.02 billion at issuance," Fitch reported.

Citing exposure to subprime mortgages, Fitch Ratings has placed the long-term issuer rating of Security Capital Assurance Ltd. and the insurer financial strength ratings of XL Capital Assurance Inc. and SCA's other financial guaranty insurance subsidiaries on Rating Watch Negative.Fitch said the actions were based on an updated assessment of SCA's exposure to structured finance collateralized debt obligations backed by subprime mortgage collateral. The review indicated that SCA's capital adequacy under Fitch's model falls below the guidelines for a triple-A IFS rating, the rating agency said. As a result of the action regarding XL Capital Assurance, Fitch said it has placed 3,375 municipal bond issues insured by the company on Rating Watch Negative because of its exposure to structured finance CDOs backed by subprime mortgage collateral. Fitch can be found online at http://www.fitchratings.com.

Federal Realty Investment Trust, a constituent of the Standard & Poor's REIT Composite Index, will replace Lyondell Chemical Co. in the S&P MidCap 400 Index after the close of trading Dec. 20, S&P has announced.The reason for the change is that Lyondell is being acquired. Federal Realty, based in Rockville, Md., is a real estate investment trust that owns, manages, and redevelops shopping centers.

Washington Mutual Inc., Seattle, has priced a public offering of 3 million shares of 7.75% series R noncumulative perpetual convertible preferred stock with a liquidation preference of $1,000 per share.WaMu said it expects the offering to generate net proceeds of $2.9 billion, of which up to $1 billion will initially be contributed to Washington Mutual Bank, its principal subsidiary, as additional capital. Each share of the series R preferred stock will be convertible at any time, at the option of the holder, into 47.0535 shares of WaMu common stock, representing an initial conversion price of approximately $21.25 per share, WaMu said. The joint book-running managers of the offering are Lehman Brothers Inc., Morgan Stanley & Co., Credit Suisse Securities (USA) LLC, and Goldman, Sachs & Co. WaMu can be found online at http://www.wamu.com.

Wolters Kluwer Financial Services is offering to help mortgage servicers modify the loans of distressed subprime borrowers who face onerous rate resets.WKFS, a provider of compliance, content, and technology systems to the industry, says it can help servicers modify loans rapidly with a standard but customizable set of documents and packages that let servicers freeze the interest rate of their borrowers' existing adjustable-rate mortgages for a specified period or convert those ARMs to fixed-rate or interest-only loans. The company said it can provide secure electronic delivery of completed document packages to borrowers and all other parties, including electronic signature capabilities for the borrower's acceptance.

Over a million homes entered the foreclosure process nationwide in the first 11 months of the year, a 93% increase from the level recorded in the comparable period of last year, according to ForeclosureS.com, a Fair Oaks, Calif.-based investment advisory firm. In addition, nearly 527,000 homes were repossessed by lenders during the period, up 41% from the comparable level a year earlier, the company reported. However, not all the foreclosure news is gloomy, the company said. "Our newest ForeclosureS.com report shows pockets of actual drops in the number of foreclosure and pre-foreclosure filings from a year ago," said Alexis McGee, president of ForeclosureS.com. "That's positive, and that's the real news despite overall numbers that generally are up for the year and from 2006." The company can be found online at http://www.foreclosures.com.

Lehman Brothers took a $3.5 billion writedown related to residential and commercial assets in its fourth fiscal quarter but was able to offset it with about $2 billion in hedging gains, the company's global head of risk management said in a Dec. 13 conference call.Considering that the global credit crunch made November the "single worst month on record" for securitized assets, Lehman's 12% decline in year-to-year quarterly income, to $886 million, was a sign that the company did a relatively good job of managing its risk even though it did not emerge from the quarter unscathed, Chris O'Meara said. The residential-related portion of the writedown totaled $2.2 billion, Mr. O'Meara said.