Servicing

Two classes of notes issued by MWAM CBO series 2001-1 Ltd., a collateralized debt obligation composed partly of mortgage-backed securities, have been downgraded by Fitch Ratings.Class A was downgraded from AAA to AA-plus, and class B was downgraded from B/DR2 to C/DR1. The downgrades were attributed to "continued collateral deterioration resulting from negative credit migration." The CDO consists of residential and commercial MBS, asset-backed securities, other CDOs, investment-grade corporate securities, and U.S. government securities, Fitch said.

Three classes of Merrill Lynch Mortgage Investors Inc.'s mortgage loan asset-backed certificates, series 2005-SD1, have been downgraded by Fitch Ratings.The downgrades were as follows: class M-2, from A to BBB-plus; class B-1, from BBB to BB; and class B-2, from BB to B-minus/DR2. The rating agency also affirmed the ratings on two other classes in the deal. The downgrades were attributed to a deterioration in the relationship between credit enhancement and expected losses. The transaction consists primarily of subprime mortgage loans secured by first or second liens.

Six classes of Bear Stearns Asset Backed Securities Trust series 2005-1 have been downgraded by Fitch Ratings.The downgrades were as follows: class M2, from A to BBB-minus; class M3, from A-minus to BB; class M4, from BBB-plus to BB-minus; class M5, from BBB to B; class M6, from BBB-minus to CC/DR2; and class M7, from B-plus to CC/DR3. Fitch also affirmed the ratings on two other classes in the deal. The downgrades were attributed to a deterioration in the relationship between credit enhancement and expected losses. The transaction consists of fixed- and adjustable-rate mortgage loans secured by first and second liens on residential properties. Fitch can be found on the Web at http://www.fitchratings.com.

Radar Logic Inc., New York, has announced that derivatives trading in the Residential Property Index market will begin Sept. 17.Trading will be based on the RPX Prices, single values representing price per square foot based on actual residential real estate transactions in 25 U.S. metropolitan statistical areas, as well as a 25-city composite. "The launch of the RPX market provides both investors and participants in the real estate industry with sophisticated tools that have not been available to them before," said Michael Feder, chief executive officer and president of Radar Logic. Dealers licensed to offer products in the RPX market include Morgan Stanley & Co.; Lehman Brothers Inc.; Merrill Lynch, Pierce, Fenner & Smith Inc.; Deutsche Bank Securities Inc.; Goldman Sachs & Co.; and Bear Stearns & Co. Radar Logic can be found online at http://www.radarlogic.com.

San Francisco-based Compass Analytics LLC has announced the release of its Mortgage Servicing Rights Analytics to provide loan-level and aggregated modeling capabilities for mortgage servicers and servicing investors.The MSR Analytics, developed with input from Denver-based MountainView Servicing Group, will be released as a fully integrated part of Compass's mortgage analytics platform CompassPoint. The system will include both static and option-adjusted spread valuations and will allow analysts to use loan-level adjusters on all models, include integration to industry-standard prepayment models, integrate accounting functionality, and include speed-enhancing parallel processing. According to the announcement, the MSR Analytics will be available for hosted and installation implementations. A specific MSR Trading option will also be available. The company can be found online at http://www.compass-analytics.com.

Foreclosure sales rose 10.4% in California in August, and speculator-owned properties represent a growing percentage of the foreclosed properties, according to ForeclosureRadar, Discovery Bay, Calif.The company reported that 9,477 California foreclosures (with a total loan value of $3.86 billion) were sold at auction in August. Non-owner-occupied properties accounted for $1.71 billion of the total and represented 44.3% of the properties, the company reported. "Many blame subprime lending for our current real estate crisis, but rampant speculation, even by those with great credit, played a leading role," said Sean O'Toole, founder and chief executive officer of Foreclosure Radar. "The subprime market took the first hit, as those borrowers had the least to lose when they walked away. Now that nearly half of foreclosures represent non-owner-occupied properties, it is clear that speculators are walking away, too." ForeclosureRadar, a foreclosure listings and software company, can be found on the Web at http://www.foreclosureradar.com.

The Senate has passed a Department of Housing and Urban Development appropriations bill that provides $100 million for counseling for homeowners facing foreclosure."Across the country too many families are facing the nightmare threat of foreclosure," said Sen. Christopher S. Bond, R-Mo. "This is a good step to help stem the tide of foreclosures without bailing out risky lenders and speculators in the market." Sen. Christopher J. Dodd, D-Conn., co-sponsored the counseling amendment with Sen. Bond. The $100 million can go to public, private, and nonprofit entities (including the Neighborhood Reinvestment Corp. and state housing finance agencies) that provide foreclosure counseling. No federal funds can go directly to lenders or homeowners, according to the Bond/Dodd amendment. The Senate has passed the Transportation/HUD appropriations bill by an 88-7 vote. The HUD bill also increases Federal Housing Administration multifamily loan limits in high-cost areas and suspends for one year a cap on the number of reverse mortgages the FHA can insure. The bill does not include any funding for President Bush's downpayment assistance program.

Countrywide Financial Corp., Calabasas, Calif., says it recently obtained $12 billion in additional "secured" financing through new and existing credit facilities.The company also announced that it funded $34 billion of new loans in August, a 17% decline from the level recorded in the same month last year and a 12% drop from that of July. In a new research note, Credit Suisse says, "We believe the company's recent actions to secure additional funding, as well as the migration of funding its originations through the thrift should substantially address funding concerns at the company." Countrywide can be found online at http://www.countrywide.com.

Six certificates from three subprime deals issued by Countrywide Home Loans Inc. in 2002 and 2003 have been placed under review for possible downgrade by Moody's Investors Service.The affected securities are as follows: CWABS Inc. Asset-Backed Certificates, series 2002-BC2, classes M-2 and B-1; series 2003-BC1, classes M-2 and B-1; and series 2003-BC2, classes M-3 and B-1. The negative rating actions were attributed to credit enhancement levels that may be low given the projected losses on the underlying pool. The transactions are backed by first-lien, fixed-rate subprime mortgage loans.

Two certificates issued by Centex Home Equity Loan Trust, series 2002-D, have been downgraded by Moody's Investors Service.Class M-2 has been downgraded from A2 to Baa2, and class B has been downgraded from Ba3 to B3. The downgrades were attributed to credit enhancement levels that are deemed to be low in view of loss projections. "The credit support is declining due to the loan defaults," Moody's said. The subprime deal consists of fixed- and adjustable-rate residential mortgage loans. The rating agency can be found online at http://www.moodys.com.