Servicing

Eight classes of Merrill Lynch Mortgage Investors Inc. mortgage pass-through certificates have been downgraded by Fitch Ratings, and one other class has been placed on Rating Watch Negative.The downgrades were as follows: series 2002-NC1, class B1, from BBB to B-plus, and class B2, from BBB-minus to B; series 2002-AFC1 group 2, class BV-1, from BB to B; series 2003-HE1, class B3, from BB-minus to B; series 2003-WMC1, class B1, from BBB to BB-minus, and class B2, from BB-plus to B; and series 2003-WMC3, class B2, from BBB to BB, and class B3, from BBB-minus to BB-minus. Class B3 of series 2004-HE1 was placed on Rating Watch Negative. The rating agency also upgraded three classes and affirmed the ratings on 52 classes in 11 MLMI deals. The negative rating actions were attributed to a deterioration in the relationship between credit enhancement to expected losses.

Ten classes in three Soundview Home Equity Loan Trust Second Lien securitizations have been downgraded by Fitch Ratings.The downgrades were as follows: series 2005-A, class B-1, from BBB-minus to BB-minus, class B-2, from BB-plus to B, and class B-3, from BB to C (and assigned a Distressed Recovery rating of DR6); series 2005-B, class M-11, from BBB to BB, class M-12, from BBB-minus to B, class M-13, from BB-plus to C (and assigned a DR rating of DR6), and class M-14, from B-plus to C (and assigned a DR rating of DR6); and series 2006-A, class M12, from BB-minus to B-plus, class M-13, from B-plus to C (and assigned a DR rating of DR6), and class M-14, from B to C (and assigned a DR rating of DR6). In addition, class M-11 of series 2006-A was placed on Rating Watch Negative. Fitch also affirmed the ratings on 33 other classes in the three Soundview transactions. The negative rating actions were attributed to a deterioration in the relationship between credit enhancement and loss expectations.

Eleven classes from four Terwin Mortgage Trust issues of mortgage pass-through certificates have been downgraded by Fitch Ratings, and one has been placed on Rating Watch Negative.Fitch also affirmed the ratings on 29 other classes in the four transactions. The downgrades were based on deterioration in the relationship between credit enhancement and expected losses, Fitch said. The collateral for the transaction is fixed-rate subprime loans secured by second-lien mortgages on residential properties. Fitch can be found on the Web at http://www.fitchratings.com.

Opteum Inc., Vero Beach, Fla., has announced an agreement by its subsidiary, Opteum Financial Services LLC, to sell a majority of its private-label and agency mortgage servicing portfolio.The terms of the sale were not disclosed. The performing loans in the portfolio had an aggregate unpaid principal balance of approximately $5.67 billion as of March 31, Opteum said. The proceeds of the sale will be used to repay debt secured by the portfolio. The company can be found on the Web at http://www.opteum.com.

IndyMac Bancorp Inc., Pasadena, Calif., has reported net earnings of $52.4 million ($0.70 per share) for the first quarter, down 34% from $79.8 million ($1.18 per share) a year earlier.However, IndyMac reported mortgage loan production of $26 billion, which was up 28% from that of a year earlier, and the company said it had attained a record market share of 3.92%. "This quarter was a serious test of our hybrid thrift/mortgage banking business model," said Michael W. Perry, IndyMac's chairman and chief executive officer, pointing to big earnings declines in its wholesale and conduit channels, which had been "two of our major profit contributors" in recent years. "However, Financial Freedom, our reverse mortgage subsidiary, posted a 50% increase over last quarter such that we were able to earn $44 million and [a return on equity] of 26% from mortgage production for the quarter." Combined with a 68% rise in earnings from mortgage servicing, IndyMac's total consumer mortgage banking business, "while down 22% from last quarter, was solidly profitable, earning $60 million and a 24% ROE," Mr. Perry said. IndyMac, the holding company for IndyMac Bank FSB, can be found online at http://www.indymacbank.com.

The number of vacant single-family homes for sale rose 3.8% in the first quarter, leaving a huge overhang of 2.2 million vacant homes on the market in the middle of the spring selling session, according to a Census Bureau report.The report indicates that the number of single-family vacancies rose from 2.10 in the fourth quarter to 2.18 million in first quarter, after jumping 37.9% over the previous four quarters. Last year, new home construction combined with active selling by investors created a huge inventory of the unsold vacant homes. This spring, homebuilders have cut back on starts. But the National Association of Home Builders said it is concerned that rising foreclosures could increase the supply of vacant homes. NAHB senior economist Bernard Markstein said he expects the second-quarter report to show an increase in vacant homes, but not a significant increase. The Census Bureau report also shows that the homeownership rate dipped to 68.4% in the first quarter from 68.9% in the fourth quarter.

Four classes of Merrill Lynch Mortgage Investors Inc. mortgage pass-through certificates have been downgraded by Fitch Ratings, and four other classes have been placed on Rating Watch Negative.The downgrades were as follows: series 2005-SL1, class B4, from BBB-plus to BBB, and class B5, from BB-plus to B-plus; series 2005-SL2, class B5, from BB-plus to B-plus; and series 2005-SL3, class B5, from BB to B-plus. The securities placed on the Rating Watch Negative were as follows: class B4 of series 2005-SL3, and classes B3, B4, and B5 of series 2005-NCA. The rating agency also affirmed the ratings on 29 classes in five Merrill Lynch deals. The negative rating actions were attributed to a deterioration in the relationship of credit enhancement to expected losses.

Four classes from two Credit Suisse First Boston Home Equity Asset Trust securitizations have been downgraded by Fitch Ratings, and six others have been placed on Rating Watch Negative.The downgrades were as follows: series 2005-7, class B-4, from BB-plus to B-plus, and class B-5, from BB to B-plus; and series 2005-8, class B-4, from BB-plus to BB, and class B-5, from BB to B-plus. The securities placed on Rating Watch Negative were as follows: class B-4 of series 2005-6; classes B-2 and B-3 of series 2005-7; classes B-2 and B-3 of series 2005-8; and class B-3 of series 2005-9. Fitch also affirmed the ratings on 76 classes in seven CSFB deals. The negative rating actions were attributed to a deterioration in the relationship between credit enhancement and expected losses.

Six classes in two Soundview Home Equity Loan Trust securitizations have been downgraded by Fitch Ratings, and one other class has been placed on Rating Watch Negative.The downgrades were as follows: series 2005-DO1, class M-10, from BBB-minus to BB-plus, class M-11, from BB-plus to BB, class B-1, from BB to BB-minus, and class B-2, from BB-minus to B-plus; and series 2005-OPT2, class M8, from BBB to BBB-minus, and class M9, from BBB-minus to BB-plus. In addition, class M-11 of series 2005-4 was placed on Rating Watch Negative. Fitch also upgraded five classes from one Soundview deal and affirmed the ratings on over 100 other classes in 15 Soundview transactions. The negative rating actions were attributed to a deterioration in the relationship between credit enhancement and loss expectations.

Ten classes from five Structured Asset Investment Loan mortgage pass-through certificate deals have been downgraded by Fitch Ratings, and four classes have been placed on Rating Watch Negative.The downgrades were as follows: series 2005-9, class B1, from BBB-minus to BB-minus, and class B2, from BB to B-plus; series 2005-11, class B1, from BB-plus to B-plus, and class B2, from BB to B-plus; series 2005-HE1, class M9, from BBB to BB-plus, and class B1, from BBB-minus to BB-minus; series 2005-HE2, class B1, from BB-plus to BB, and class B2, from BB to BB-minus; and series 2005-HE3, class M10, from BBB to BB-plus, and class M11, from BB-plus to BB-minus. The securities placed on Rating Watch Negative were as follows: series 2005-9, class M9; series 2005-10, classes B1 and B2; and series 2005-11, class M8. In addition, Fitch affirmed the ratings on more than 100 classes from 13 SAIL transactions. The rating agency attributed the downgrades to a deterioration in the relationship between credit enhancement and expected losses and delinquencies. The collateral in the deals consists primarily of conventional fixed- and adjustable-rate, fully amortizing and balloon, first- and second-lien residential mortgage loans. Fitch can be found online at http://www.fitchratings.com.