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IndyMac Bancorp, the nation's eighth-largest funder of residential loans, said Sept. 7 that it will cut 10% of its staff in coming months -- roughly 1,000 workers -- as it prepares to lose money in the current quarter.In a statement, IndyMac chief executive Mike Perry predicted that the company's loan production will fall by one-half in the fourth quarter, "although we are experiencing some pricing power on new loans such that our margins are improving." The Pasadena, Calif.-based IndyMac recently transformed its production from mostly alternative-A loans to mostly loans eligible for securitizing by the government-sponsored enterprises. Mr. Perry blamed "illiquidity in the secondary markets" for IndyMac's woes. He said the company will report third-quarter earnings of break-even to a loss of 50 cents a share. IndyMac Bancorp is a holding company of a federally insured depository.

Countrywide Financial Corp., addressing what it calls "changing market conditions," said late Friday that it will lay off 10,000 to 12,000 workers over the next three months, or 20% of its work force.The story was broken by MortgageWire on Sept. 4. Countrywide also repeated that it will only originate loans that can be sold to Fannie Mae, Freddie Mac, or insured by Ginnie Mae. It also said that it hopes to migrate "almost all" of its residential production into its thrift affiliate by the end of September. In a recent interview with National Mortgage News, Countrywide founder, chairman, and chief executive Angelo Mozilo said the current liquidity crisis is one of the worst he has seen during his five decades in the business. The Calabasas, Calif.-based company can be found on the Web at http://www.countrywide.com.

Class M2 of Delta Funding Corp. 2000-2 has been downgraded from BBB-minus to B by Fitch Ratings.Fitch also affirmed the rating on one other class in the transaction. The downgrade was attributed to a deterioration in the relationship between credit enhancement and loss expectations. The underlying collateral for the transaction consists of fixed- and adjustable-rate subprime mortgage loans secured by first and second liens on residential properties.

Two classes of Salomon Brothers Mortgage Securities VII Inc. mortgage pass-through certificates, series 2002-WMC2, have been downgraded by Fitch Ratings.Class M-2 was downgraded from BBB-minus to B, and class M-3 was downgraded from BB to B. Fitch also affirmed the rating on one class in the deal. The downgrades reflect deterioration in the relationship between credit enhancement and expected losses, Fitch said. The collateral of the transaction consists of fixed- and adjustable-rate first- and second-lien mortgage loans extended to subprime borrowers.

Two classes of People's Choice Home Loan Securities Trust series 2004-1 have been downgraded by Fitch Ratings, and two others have been removed from Rating Watch Negative.Class M-7 was downgraded from BB to B, and class M-8 was downgraded from BB-minus to C/DR5. Classes M-3 and M-4 were removed from Rating Watch Negative. Fitch also affirmed the ratings on six classes in the deal. The downgrades were attributed to deterioration in the relationship between credit enhancement and loss expectations. The mortgage pool consists of 30-year subprime residential loans.

Three classes of notes and shares from Trainer Wortham First Republic CBO III Ltd., a collateralized bond obligation that consists mainly of residential mortgage-backed securities, have been downgraded by Fitch Ratings.The downgrades were as follows: class C notes, from A to A-minus; class D notes, from BBB to BB (and removed from Rating Watch Negative); and preference shares, from BB to B (and removed from Rating Watch Negative). Fitch also affirmed the ratings on three other classes of notes in the deal. The downgrades were attributed to credit deterioration and exposure to subprime RMBS.

Three classes of Aegis 2004-1 mortgage pass-through certificates have been downgraded by Fitch Ratings.The downgrades were as follows: class B1, from BBB-plus to BB (and removed from Rating Watch Negative); class B2, from BBB-minus to B; and class B3, from BB-minus to C/DR5. Fitch also affirmed the ratings on three other classes in the deal. The downgrades reflect deterioration in the relationship between credit enhancement and expected losses, Fitch said. The assets consist primarily of conventional residential mortgage loans, fully amortizing and balloon, extended to subprime borrowers.

Five classes from two Merrill Lynch Mortgage Investors Inc. subprime securitizations have been downgraded by Fitch Ratings.The downgrades were as follows: series 2003-OPT1, class B2, from BBB-plus to BB-plus, and class B3, from BBB-minus to B; and series 2003-WMC1, class M2, from AA-plus to AA-minus, class B1, from BB-minus to CCC/DR1, and class B2, from B to C/DR5. The rating agency also affirmed the ratings on 21 classes in four MLMI transactions. The downgrades were attributed to a deterioration in the relationship between credit enhancement and loss expectations.

Eight classes from two issues of Asset Backed Funding Corp. subprime mortgage pass-through certificates have been downgraded by Fitch Ratings, and two classes from two other issues have been placed on Rating Watch Negative.The downgrades were as follows: series 2003-OPT1, class M-5, from BBB-plus to BB-plus, and class M-6, from BBB to B; and series 2004-FF1, class M-1, from AA to AA-minus, class M-2, from A to BBB-plus, class M-3, from A-minus to BBB-minus, class M-4, from BBB-plus to BB-plus, class M-5, from BBB to BB, and class M-6, from BBB-minus to BB-minus. The securities placed on Rating Watch Negative were class M-5 of series 2003-AHL1 and class M-6 of series 2004-OPT3. Fitch also affirmed the ratings on 19 classes from the four ABFC securitizations. The negative rating actions reflect the deterioration of credit enhancement relative to expected losses, the rating agency said. The underlying collateral for the transactions consists of fixed- and adjustable-rate subprime mortgage loans secured by first and second liens.

Twenty-seven classes from six issues of CDC Mortgage Capital Trust and IXIS Real Estate Capital Trust subprime mortgage pass-through certificates have been downgraded by Fitch Ratings.Fitch also affirmed the ratings on 12 CDC and IXIS classes in the transactions. The downgrades were attributed to a deterioration in the relationship between credit enhancement and loss expectations. The collateral consists of 30-year fixed- and adjustable-rate subprime residential mortgage loans.