Servicing

Countrywide Financial Corp. funded just $3.2 billion in mortgages through loan brokers during October, a startling 57% decline from the level of a year earlier.During the month its retail production fell by 29%, while loans bought through the correspondent channel declined 52%. The Calabasas, Calif.-based company funded $22 billion in October, a 48% drop from the level recorded a year earlier. Like most residential lenders, Countrywide has been hurt by the meltdown in the subprime and nonconforming niches and a credit crunch in the secondary market. In a statement, Countrywide president David Sambol noted that 90% of the company's production is now funded through its thrift affiliate. Countrywide can be found online at http://www.countrywide.com.

Class B of the CSFB 2004-CF1 mortgage transaction has been placed on review for possible downgrade by Moody's Investors Service.The amount of the deal's available credit enhancement has been reduced from losses and step-down, Moody's said. "The timing of losses, coupled with passing of performance triggers, has caused the protection available to the subordinate bonds to be diminished," the rating agency said. The collateral backing the deal consists primarily of first-lien, fixed- and adjustable-rate scratch-and-dent mortgage loans.

Class B-5 of Financial Asset Securitization Inc. 1997-NAMC1 has been downgraded from BBB to CCC/DR2 by Fitch Ratings.In addition, the rating agency placed class B-4 of the deal and class B-3 of series 1997-NAMC2 on Rating Watch Negative and affirmed the ratings on eight classes from the two deals. Fitch attributed the negative rating actions to a deterioration in the relationship between credit enhancement and expected losses. Fitch can be found on the Web at http://www.fitchratings.com.

Four tranches of securities issued by Amortizing Residential Collateral Trust Mortgage Pass-Through Certificates, series 2004-1, have been downgraded by Moody's Investors Service.The downgrades were as follows: class M5, from A3 to Baa2; class M6, from Baa1 to Baa3; class M7, from Baa2 to Ba1; and class M8, from Baa3 to B1. The downgrades were based on an analysis of credit enhancement levels provided by excess spread, overcollateralization, and subordinate classes relative to projected and stressed losses, Moody's said. The collateral consists primarily of first-lien, fixed- and adjustable-rate subprime mortgage loans.

Moody's Investors Service has downgraded the ratings of 59 tranches from 12 RALI deals issued in 2006 and late 2005.Moody's has also placed the ratings of 15 tranches under review for possible downgrade, and two downgraded tranches remain on review for possible downgrade. The negative rating actions were based on higher-than-anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels, Moody's said. The collateral consists primarily of first-lien, fixed- and adjustable-rate alternative-A mortgage loans.

Moody's Investors Service has downgraded 64 tranches from 12 deals backed by Impac collateral in 2006 and late 2005 and placed 34 tranches 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 chiefly of first-lien, fixed- and adjustable-rate alternative-A mortgage loans. The 12 transactions were issued by Impac Secured Assets Corp., Impac CMB Trust, CWABS Asset Backed Certificates Trust, and Bear Stearns Asset Backed Securities I Trust.

The ratings of 86 tranches from 11 mortgage-backed securities deals issued by Morgan Stanley in 2006 and late 2005 have been downgraded by Moody's Investors Service.In addition, Moody's has placed 37 tranches under review for possible downgrade, and four downgraded tranches remain on review for possible downgrade. The negative rating actions were attributed to 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.

Standard & Poor's Ratings Services has announced a revision of its outlook on IndyMac Bancorp from stable to negative, citing concerns about the company's "exposure to continued deterioration in the housing and mortgage finance markets."S&P also affirmed its BBB-minus/A-3 rating on the company. At the end of the third quarter, nonperforming assets "exceeded what we consider normalized levels, although they remain within tolerable levels for the rating," S&P said. "Increased credit costs, market value losses on mortgage-related securities, and lower gain-on-sale of mortgage loans resulted in a $203 million loss in the most recent quarter and will continue to limit profitability in the near term." S&P said it expects IndyMac's profitability to "remain depressed" over the near term because of higher credit costs and lower gain-on-sale margins. The rating agency can be found online at http://www.standardandpoors.com.

Standard & Poor's Ratings Services has announced a revision of its outlook on Washington Mutual Inc. and its subsidiaries from stable to negative.S&P also affirmed its A-minus/A-2 counterparty credit rating on WaMu. The outlook revision was based on lower earnings from WaMu's core mortgage banking business and "the negative trends in the national housing and mortgage markets that will depress earnings in the next year," said S&P credit analyst Victoria Wagner. WaMu's projections for higher credit provisions through the first quarter of 2008 are "quite sizable and reflect not only the weak housing markets, but the significant increase in subprime-related credit losses, the rise in second-lien home equity loans," the rating agency said. WaMu's other core retail banking businesses are seeing "good and stable performance," and its mortgage banking business has significant geographic diversification and "a significant reduction in subprime mortgage risk," S&P said. The current investigation by the New York attorney general into WaMu's appraisal practices with eAppraiseIT is not a consideration in the outlook revision, S&P said.

Ginnie Mae has announced the issuance of its first Home Equity Conversion Mortgage mortgage-backed security, a $116 million transaction that is the first-ever government-guaranteed MBS collateralized by Federal Housing Administration-insured reverse mortgages.The so-called HMBS offers "the only full-faith-and-credit vehicle and the only standardized structure" for securitizing FHA-insured HECM loans, Ginnie Mae said. HMBS issuers will be able to securitize all HECM loan draws, mortgage insurance premiums, and servicing and guarantee fees and then pass through payments to investors as homeowners pay off the loan. "Currently, reverse mortgage originators generally get a premium on the initial loan draw and are reimbursed by the investor dollar-for-dollar on subsequent draws," said Thomas R. Weakland, acting executive vice president of Ginnie Mae. "The ability to securitize successive draws means the originator can obtain market pricing on the entire loan amount -- not just the initial draw. That's a key value of the HMBS to lenders."