Servicing

Class B5 of Harborview Mortgage Loan Trust Inc. series 2006-6 has been placed on Rating Watch Negative by Fitch Ratings.In addition, Fitch affirmed the ratings on five other classes in the transaction. The rating agency attributed the watchlist placement to "increasing credit risk, posing a potential threat to subordinate bonds." The deal is backed by hybrid and adjustable-rate mortgage loans secured by residential first liens. Fitch can be found online at http://www.fitchratings.com.

Five classes from three deals issued by First Franklin Mortgage Loan Trust have been downgraded by Moody's Investors Service.The downgrades were as follows: First Franklin Mortgage Loan Trust 2003-FFB, class B-1, from Baa2 to B3, and class B-2, from Baa3 to B3; First Franklin Mortgage Loan Trust series 2003-FFC, class M-3, from Baa1 to Ba1, and class M-4, from Baa2 to Ba1; and FFML Net Interest Margin Trust 2003-FFB notes, from Baa2 to B3. The downgrades were based on credit enhancement levels that were low in view of current loss projections, Moody's said. "Realized losses have caused the overcollateralization amount to decline below the required level," the rating agency said. "In addition, losses are not all covered by the mortgage insurance, and the subordinate tranches have therefore less credit protection than expected."

The Federal Agricultural Mortgage Corp., Washington, D.C., has announced the guarantee of a $1 billion note transaction that boosted its total guarantee volume to a record level of over $8 billion.Farmer Mac said the transaction was part of the government-sponsored enterprise's AgVantage program, which guarantees timely payment of principal and interest on notes issued by a trust and secured by the corporate obligation of an agricultural mortgage lender, which is in turn secured by agricultural mortgages. Farmer Mac can be found online at http://www.farmermac.com.

The mortgage banking sub-segment of Capital One Financial Corp., McLean, Va., incurred a $12.6 million net loss in the first quarter, Capital One has reported.The company cited pressures in the secondary capital markets for loans associated with nonconforming prime mortgage loans (including alternative-A loans), which it said resulted in a $19 million addition to its reserve related to representations and warranties and a $21 million warehouse valuation adjustment. The sub-segment -- which falls under Capital One's National Lending segment and represents the legacy business of GreenPoint Mortgage -- originated $6.8 billion in loans during the first quarter, down $2.5 billion from originations in the fourth quarter and down $1.0 billion from those of a year earlier, Capital One reported. (Capital One acquired North Fork Bank, the parent company of GreenPoint, in December 2006.) Overall, the company reported net income of $675.1 million ($1.62 per share) for the first quarter, compared with $883.3 million ($2.86 per share) in the first quarter of 2006. Capital One can be found online at http://www.capitalone.com.

Citing a need to improve accountability in the mortgage industry and keep families from losing their homes, Pennsylvania Acting Banking Secretary Victoria A. Reider has urged swift action on legislation to stop abusive lending practices blamed for many foreclosures.Legislation was introduced in the state House and the state Senate earlier this year. The six bills are the result of a 2005 Pennsylvania Department of Banking report on foreclosures, which cited abusive lending practices as a significant contributing factor to the state's above-average foreclosure rate. The bills would amend state laws to require individual licenses for mortgage professionals. Currently, the department has the authority to license mortgage companies, but not their employees. "In Pennsylvania, the people who cut your hair are licensed," Ms. Reider said. "The people who sell insurance and stocks are licensed. But the people who guide, for most of us, the largest financial transaction of our lives are not licensed. This legislation would create a new licensing category for individual mortgage loan originators."

New York Attorney General Andrew Cuomo has issued generic subpoenas to about 30 mortgage lenders and servicers asking about industry practices, and he may focus on mortgage broker compensation, according to a mortgage banking attorney."Given his recent foray into the student lending world, it wouldn't surprise me if he looks at payments by lenders to mortgage brokers," said Larry Platt, a partner in the Washington office of K&L Gates. But he stressed that he has no inside knowledge. "I am just speculating." The subpoenas were issued in the past few days, and they generally relate to appraisal practices, mortgage broker practices, and the way lenders slot borrowers into different loan products. "There is no accusation of any wrongdoing," and it appears that the AG's office is trying to get a handle on how the industry operates, Mr. Platt said. "Any subpoenas that were received are part of an ongoing investigation -- that's all I can say," said Arthur Harris, a spokesman for Mr. Cuomo's office. Mr. Platt said he suspects that the New York AG will focus on payments by lenders to brokers, which are called yield-spread premiums, based on his tenure at the Department of Housing and Urban Development. In 1997, then-Secretary Cuomo tried unsuccessfully to impose strong disclosure requirements on broker compensation, which industry groups considered anti-YSP.

The General Electric-owned WMC Mortgage, Burbank, Calif., a top-ranked subprime lender, on Thursday laid off 50% of its work force -- roughly 771 full-time positions.A company spokeswoman confirmed the job cuts to MortgageWire. WMC has just two wholesale offices remaining -- its Burbank location and one in Orangeburg, N.Y. A year ago it had nine. The spokeswoman declined to give a breakdown on what positions were cut. She said WMC -- which GE bought a few years back -- is "committed" to the subprime business. In March WMC laid off 20% of its staff, or about 460 workers. Industry sources say the company has had huge buyback requests from secondary-market investors. The spokeswoman said she could not address the issue. WMC Mortgage can be found online at http://www.wmcdirect.com.

Three classes of First Horizon Home Loan Mortgage Trust mortgage-backed securities have been placed on Rating Watch Negative by Fitch Ratings.The affected securities are the B5 classes of series 2005-AA7, series 2005-AA8, and series 2006-FA1. The negative rating actions were attributed to "signs of increasing credit risk, posing a potential threat to subordinate bonds." The collateral for the transactions consists of conventional 15- and 30-year fixed-rate residential mortgages extended to prime borrowers.

Class E of Merrill Lynch Mortgage Investors Inc. mortgage pass-through certificates, series 1998-C1-CTL, has been downgraded from Ba3 to B1 by Moody's Investors Service.One other class was upgraded, and the ratings on six other classes in the deal were affirmed. The downgrade reflects "concerns about the credit of Rite Aid Corp.," Moody's said. The certificates are collateralized by 99 credit tenant lease loans backed by 16 corporate credits, the rating agency said. Moody's can be found online at http://www.moodys.com.

Bank of America Corp., Charlotte, N.C., has reported net income of $5.26 billion ($1.16 per share) for the first quarter, an increase of 5% from $4.99 billion ($1.07 per share) a year earlier that it attributed partly to a rise in mortgage banking income.BoA said the net income from its Consumer Real Estate segment, including its home equity and mortgage businesses, rose 33% to $227 million. Revenues for the segment totaled $840 million, a 21% increase derived "partly from increased home equity balances," the company said. BoA can be found online at http://www.bankofamerica.com.