Servicing

Ten classes from six Renaissance Home Equity Loan Trust securitizations have been downgraded by Fitch Ratings.In addition, the ratings on 52 other classes from 11 transactions were affirmed. Fitch attributed the downgrades to a deterioration in the relationship between credit enhancement and expected losses. The transactions are backed by fixed- and adjustable-rate subprime mortgage loans.

Twelve classes from 10 issues of Long Beach Mortgage Loan Trust residential mortgage-backed securities have been downgraded by Fitch Ratings, and nine classes have been placed on Rating Watch Negative.Fitch also affirmed the ratings on 95 other classes in the transactions. The negative rating actions were attributed to a deterioration in the relationship between credit enhancement levels and loss expectations. The transactions are backed by fixed- and adjustable-rate subprime mortgage loans.

Fifteen classes from seven Delta Funding Corp. home equity issues have been downgraded by Fitch Ratings.In addition, Fitch upgraded four classes and affirmed the ratings on 27 classes from 11 Delta Funding transactions. The downgrades were attributed to high delinquencies and a deterioration of credit enhancement. The collateral in the deals consists of fixed- and adjustable-rate, first- and second-lien subprime residential mortgage loans.

Twenty classes from 11 deals issued by SACO I Trust have been downgraded by Fitch Ratings, and one class was placed on Rating Watch Negative.In addition, Fitch affirmed the ratings on 94 classes in the 11 deals. The negative rating actions were based on "a decline in the overcollateralization amount, stemming from losses associated with the mortgage pools and exacerbated by reduced excess spread resulting from much faster-than-expected prepayments and rising interest rates," Fitch said. The transactions are backed chiefly by fixed-rate, closed-end second-lien residential mortgage loans.

Two classes of Structured Asset Investment Loan Trust residential mortgage-backed certificates have been downgraded by Fitch Ratings, and seven classes have been placed on Rating Watch Negative.Class B1 of series 2006-1 was downgraded from BBB-minus to BB-minus, and class B2 was downgraded from BB-plus to B. The Rating Watch placements were as follows: series 2006-1, classes M8 and M9; series 2006-2, classes M7, M8, and B1; and series 2006-BNC1, classes M7 and M8. In addition, Fitch affirmed the ratings on 32 classes from four SAIL transactions. The rating agency attributed the negative rating actions to a deterioration in the relationship between credit enhancement and expected losses due to higher-than-expected delinquencies and losses and to a shortfall in overcollateralization. The pools consist primarily of 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.

Twenty-seven classes from seven transactions issued by Structured Asset Investment Loan Trust have been downgraded by Moody's Investors Service.In addition, Moody's placed eight classes from two SAIL transactions on review for possible downgrade and confirmed the ratings on three classes. The rating agency attributed the negative rating actions to credit enhancement levels that are seen as too low based on higher-than-expected rates of delinquency. "Moreover, recent losses have begun to erode overcollateralization on a number of the downgraded deals, leaving the rated bonds less protected against future losses," Moody's said. The collateral in the deals consists of fixed- and adjustable-rate, first- and second-lien subprime residential mortgage loans. Moody's can be found on the Web at http://www.moodys.com.

Rating agencies issued a blizzard of news releases during the week of April 23 announcing downgrades and other rating actions on mortgage-backed and mortgage-related securities, many of them linked to subprime mortgage loans.The releases resulted in more than 30 news items on well over 300 downgrades of MBS, asset-backed securities supported by home equity loans, and collateralized debt obligations containing residential and commercial MBS. This was a record number of downgrade-related news items for this publication in a single week.

Economist David Lereah is leaving the National Association of Realtors in mid-May to take a top position at Move Inc., a provider of real estate information that operates the NAR's website and owns Realtor.com.After seven years at the NAR, Mr. Lereah will become an executive vice president at Move, which is based in Westlake Village, Calif. The NAR is a longtime stockholder in the company, which was formed in the mid 1990s and was formerly known as Homestore. The NAR has directors on Move's board. Mr. Lereah will also serve as chairman and partner of a new business entity that former Realtor.com president and chief executive Allan Dalton is planning to launch in the third quarter. "Having David partner with me on this new venture will ensure that consumers and the industry will benefit from his unparalleled knowledge of financial issues and the real estate marketplace," Mr. Dalton said. The NAR can be found online at http://www.realtor.com, and Move can be found at http://www.move.com.

The Federal Housing Administration may not be able to revive its single-family program unless the agency adopts private-sector policies and procedures in originating, insuring, and servicing mortgages, according to the Consumer Mortgage Coalition.So the trade group is working to add language to an FHA reform bill (H.R. 1852) that requires the FHA to swiftly align its processes and procedures with those of the conventional market. The CMC contends that the FHA's outdated underwriting processes and severe penalties for noncompliance force lenders to conduct their FHA business as separate operations. This is expensive and discourages lenders from participating in the FHA program, according to CMA executive director Anne Canfield. "It is really important for FHA to align their processes and procedures with the way the world works," she said. The House Financial Services Committee is scheduled to mark up H.R. 1852 on May 1.

Minority real estate groups are calling on House Financial Services Committee leaders to earmark a portion of a GSE affordable housing fund to support foreclosure prevention funds.Subprime loans are prevalent in minority and low-income neighborhoods, according to the Asian Real Estate Association of America, the National Association of Real Estate Brokers, and the National Association of Hispanic Real Estate Professionals. "The reality is that without real resources it will be extremely difficult to help many of these borrowers facing spikes in interest rates and increases in their monthly mortgage obligations," the three real estate groups say in a letter to the committee chairman, Rep. Barney Frank, D-Mass., and the ranking minority member, Rep. Spencer Bachus, R-Ala. The government-sponsored enterprise bill approved by the House committee on March 28 requires Fannie Mae and Freddie Mac to contribute annually an estimated $520 million to an affordable housing fund. During the first year, those AH funds are directed to the repair and rebuilding of affordable housing in Louisiana and Mississippi. The three groups want a portion of those contributions earmarked for loss mitigation, homeowner counseling, and foreclosure prevention.