Servicing

Two classes of notes issued by MKP CBO I Ltd., a collateralized debt obligation partly composed of residential and commercial mortgage-backed securities, have been downgraded by Fitch Ratings.Class A-1L was downgraded from B/DR2 to CCC/DR2, and class A-2L was downgraded from CC/DR4 to C/DR5. Fitch attributed the downgrades to "further deterioration of the credit quality of the collateral pool and severe undercollateralization of the subordinate notes." The CDO consists of RMBS, CMBS, and commercial and consumer asset-backed securities, the rating agency said.

Two classes of GSMPS Mortgage Loan Trust series 2003-1 have been downgraded by Moody's Investors Service.Class B4 was downgraded from Ba2 to Ba3, and class B5 was downgraded from B2 to Ca. The rating on one other class in the transaction was confirmed. The downgrades stem from the fact that credit enhancement levels are too low in view of projected losses on the underlying pools, Moody's said. The transaction consists of a securitization of re-performing loans insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs, virtually all of which were repurchased from Ginnie Mae pools, the rating agency said.

Four classes from three issues of CDC Mortgage Capital Trust mortgage pass-through certificates have been downgraded by Fitch Ratings, and three classes have been placed on Rating Watch Negative.The downgrades were as follows: series 2003-HE1, class B1, from B-plus to CCC; series 2003-HE3, class B-3, from BBB-minus to BB-minus (and removed from Rating Watch Negative); and series 2003-HE4, class B-2, from BBB to BB, and class B-3, from BBB-minus to BB-minus (and removed from Rating Watch Negative). The securities placed on Rating Watch Negative were as follows: class B3 of series 2004-HE1 and classes B3 and B4 of series 2004-HE2. In addition, Fitch upgraded two classes and affirmed the ratings on 32 classes from seven CDC deals. The rating agency attributed the downgrades to a deterioration in the relationship between credit enhancement and expected losses.

Seven classes from two Meritage Mortgage Loan Trust securitizations have been downgraded by Fitch Ratings, and two other classes have been placed on Rating Watch Negative.The downgrades were as follows: series 2004-1, class M-6, from BBB-plus to BBB, class M-7, from BBB to BB-plus, class M-8, from BB-minus to B, and class B-1, from B-plus to C (and assigned a Distressed Recovery rating of DR4); and series 2004-2, class M-8, from BBB-plus to BB-plus, class M-9, from BBB to BB, and class M-10, from BB-plus to B-plus. The securities placed on Rating Watch Negative were classes M-6 and M-7 of series 2004-2. Fitch said the negative rating actions were due to a deterioration in the relationship between credit enhancement to expected losses.

Seven certificates from four transactions issued in 2004 by First Franklin Mortgage Loan Trust have been downgraded by Moody's Investors Service.The downgrades were as follows: series 2004-FFH1, class M-7, from Baa1 to Ba1, class M-8, from Baa2 to B2, and class M-9, from Baa3 to Caa1; series 2004-FFH2, class B-1, from Ba1 to B2, and class B-2, from Ba2 to Caa1; series 2004-FFH3, class B-2, from Ba1 to B3; and series 2004-FFH4, class B-2, from Ba3 to B1. The downgrades were based on an "analysis of the credit enhancement provided by subordination, overcollateralization, and excess spread relative to expected losses," Moody's said. The transactions are backed by first-lien, adjustable- and fixed-rate subprime mortgage loans. Moody's can be found online at http://www.moodys.com.

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.