Servicing

Phoenix Capital Inc., a Denver-based provider of mortgage servicing brokerage and advisory services, has announced an alliance with Stewart Lender Services Inc. that makes Phoenix a single-source provider of fulfillment for mortgage servicing portfolios.Stewart will provide services such as pulling, imaging, labeling, bar coding, packaging, and shipping loan files; reorganizing files to meet a buyer's requirements; and inventorying documents. Files are shipped to the buyer, supported by file re-creation insurance to cover any losses that may occur in transit, Phoenix said. "Sellers can now rely on one entity for all their portfolio sale requirements," said Michael Lau, executive vice president of Phoenix Capital. "This spectrum of services will ensure support from the valuation and marketing of the portfolio to the consultation, negotiation, and execution of the Purchase and Sale Agreement." The companies can be found online at http://www.phnxcap.com and http://www.stewartlenderservices.com.

Fixed-income revenues at Bear Stearns & Co. plunged 88% in the company's third fiscal quarter because of rising residential subprime delinquencies and a lack of liquidity in the secondary market.Bear -- a major player in subprime mortgage-backed securities -- reported fixed-income revenues of $118 million for the quarter, compared with $945 million in the previous quarter. "Market conditions in both the mortgage and credit businesses were extremely challenging this quarter," the Wall Street giant said in a statement. Over the past few years, Bear has financed nonprime lenders and bought loans from many nonbanks as a way to secure a steady flow of product for its subprime securitization business. A few months ago, Bear closed down two hedge funds that had invested billions in subprime assets, only to later discover those assets were almost worthless. Bear Stearns can be found online at http://www.bearstearns.com.

Two classes of notes from Triaxx Funding High Grade I Ltd., which invests in residential mortgage-backed securities, have been placed on Rating Watch Negative by Fitch Ratings.The affected securities are classes C and D mezzanine floating-rate deferrable-interest notes. Triaxx invests in triple-A rated RMBS assets using proceeds raised by issuing notes and equity and using repo funding, Fitch said. The negative rating actions were attributed to "concerns about continued availability of repo funding with terms similar to those that are currently in place with respect to haircuts and funding rates," the rating agency said. "Credit quality of the underlying assets has remained stable, but the manager has deleveraged the structure because of the decline in price of these assets." Fitch can be found online at http://www.fitchratings.com.

Forty-five tranches from 11 U.S. collateralized debt obligations have been downgraded by Derivative Fitch, which cited exposure to trust preferred securities and other debt issued by mortgage lenders, real estate investment trusts, and homebuilders.The issuance amount of the affected tranches totals approximately $1.2 billion. Fitch also affirmed the ratings on $6.8 billion of notes from the same CDOs and two others. The rating agency attributed the downgrades to "rapid deterioration in the credit and liquidity profiles of a number of REITs, homebuilders, and financial institutions underlying these CDOs. In four cases, underlying issuers of trust preferred securities filed for bankruptcy protection." Those four are New Century Financial Corp., American Home Mortgage Investment Corp., Homebanc Corp., and First Magnus Financial Corp. Derivative Fitch Inc., a subsidiary of Fitch Ratings Ltd., can be found on the Web at http://www.derivativefitch.com.

Ginnie Mae has granted an extension to R&G Mortgage Corp. allowing it to continue servicing Ginnie mortgage pools until Oct. 9, according to R&G Financial Corp., the San Juan, Puerto Rico-based parent company of R&G Mortgage.However, R&G Mortgage may not issue additional Ginnie Mae-guaranteed mortgage-backed securities. R&G Mortgage has also received notice from Fannie Mae placing conditions and limitations on the company's selling and servicing relationship with Fannie. Fannie Mae also said it will require R&G Mortgage to sell its servicing portfolio to another Fannie-approved servicer if Fannie Mae does not approve an application by R&G Financial's banking subsidiary, R-G Premier Bank of Puerto Rico, to be a Fannie Mae seller/servicer. R&G reported in July that it was no longer able to originate loans insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs because of the company's failure to submit timely audited financial statements. R&G can be found on the Web at http://www.rgonline.com.

MortgageHub, an Orlando, Fla.-based provider of mortgage and Web-based systems, has joined with USFN, a network of mortgage banking attorneys, to launch the Home Retention Alliance.MortgageHub said the alliance aims to offer "innovative alternatives to foreclosure" and bring lenders, borrowers, attorneys, and partners under one umbrella to help servicers respond to the surge in defaults and foreclosures, which increases the workload and costs associated with loan workouts. All loans will be serviced out of a service center in Orlando. "The industry is in dire need of accelerating resolution decisions for the overwhelming number of borrowers trying to keep their homes," said Ron Morgan, president of MortgageHub's Strategic Default Solutions group. ".... In teaming up with USFN, we are attempting to educate the industry of the fact that nearly 80% of loans approaching foreclosure can be rescued with the right combination of loss mitigation services." MortgageHub can be found online at http://www.mortgagehub.com, and USFN (formerly known as the U.S. Foreclosure Network) can be found at http://www.usfn.org.

Nearly 244,000 foreclosure filings were reported nationwide in August, up 36% from the level recorded in July and up 115% from that of a year earlier, according to RealtyTrac, an online foreclosure marketplace based in Irvine, Calif.The nation's foreclosure rate stood at one foreclosure filing for every 510 households, the company said in its August 2007 U.S. Foreclosure Market Report. (Foreclosure filings include default notices, auction sale notices, and bank repossessions.) "The jump in foreclosure filings this month might be the beginning of the next wave of increased foreclosure activity, as a large number of subprime adjustable-rate loans are beginning to reset now," said James J. Saccacio, chief executive officer of RealtyTrac. "Another significant factor in the increased level of foreclosure activity is that the number of REO filings (bank repossessions) is increasing dramatically, which means that a greater percentage of homes entering foreclosure are going back to the banks." The company said Nevada, California, and Florida recorded the highest foreclosure rates in August. The company can be found online at http://www.realtytrac.com.

Lehman Brothers Holdings Inc. has announced that its year-over-year net income fell 3% to $887 million in the fiscal quarter ended Aug. 31, citing "very substantial valuation reductions" for mortgages and other assets hurt by the current liquidity crunch.The Wall Street firm said the valuation concerns were most significant "on leveraged loan commitments and residential mortgage-related positions." Lehman has been partially offsetting these valuation declines with hedging and gains in other areas such as investment management, investment banking, equities, and non-U.S. revenues, as well as previously disclosed cost-cutting in the mortgage area. The company can be found online at http://www.lehman.com.

EverBank Financial Corp., Jacksonville, Fla., has reported the termination of its previously announced agreement to acquire the consumer deposit accounts, business finance division, and other assets of Atlanta-based NetBank (formerly the parent company of Meritage Mortgage).The agreement was announced May 21 along with the acquisition of NetBank's mortgage servicing portfolio, which was completed on July 1, EverBank said. The cancellation of the agreement to purchase the other assets came about "after it became clear that NetBank would not be able to complete certain conditions required to close and receive regulatory approval," EverBank said. EverBank chairman Robert Clements said the company's earnings grew 11% in the first half and that EverBank "remains in a strong position to take advantage of many other growth and acquisition opportunities that exist in this market." The companies can be found on the Web at http://www.everbank.com and http://www.netbank.com.

Downey Financial Corp., a savings and loan engaged in mortgage banking activities, has reported that its nonperforming assets jumped to 1.96% at the end of August, compared with 1.30% three months earlier.On a percentage basis, its NPA ratio spiked 50% over the time period. Based in Newport Beach, Calif., the publicly traded Downey services $5.74 billion in mortgages for others. In August it funded $171 million in residential loans for its investment portfolio. The previous month it funded just $94 million. Downey can be found online at http://www.downeysavings.com.