Servicing

The issuance of subprime mortgage-backed securities rose in February and March, but was off 15.8% for the whole quarter compared with that of the first quarter of last year, according to a Friedman Billings Ramsey report.The Arlington, Va.-based investment banking firm reported that the issuance of non-agency subprime MBS fell to $122.5 billion in the first quarter, compared with $145.5 billion in the same period in 2006. However, monthly issuance increased from $37.2 billion in January to $41.9 billion in February and $43.5 billion in March. The monthly issuance of subprime MBS averaged $43.1 billion in 2006, according to the April 13 FBR Investment Management report. FBR can be found on the Web at http://www.fbr.com.

More than a quarter of a million pre-foreclosures and notices of pending foreclosure auctions were filed nationwide in the first quarter, a rise of 22.5% from the level recorded in the fourth quarter of 2006, according to ForeclosureS.com, a Fair Oaks, Calif.-based investment advisory firm.The 253,803 filings, up from 207,128 in the fourth quarter, don't include more than 110,000 now-vacant properties that were lost to foreclosure during the same period, the company said. Noting the recent turmoil in the subprime market, the company said the result is that "financially strapped homeowners now have even fewer bailout options." Alexis McGee, president of the firm, said the foreclosure numbers "cast a dark cloud over the American dream of homeownership" that "isn't likely to lift anytime soon." The company can be found online at http://www.foreclosures.com.

LandAmerica Financial Group Inc., a provider of real estate transaction services based in Richmond, Va., has announced a noncash writedown of approximately $21 million ($13 million after taxes) of its customer-relationship intangible asset in the lender services segment.LandAmerica said the reason for the writedown is that Fremont General Corp., one of its tax and flood processing customers, had received a cease-and-desist order from the Federal Deposit Insurance Corp. involving lending practices in its mortgage origination business. LandAmerica said it had determined that the "probable loss of business" from Fremont would result in an impairment of the customer-relationship intangible asset at LandAmerica Tax and Flood Services Inc., which it acquired in 2003. The company added, however, that it has "initially concluded" that the development would not impair the goodwill balance of its lender services segment. LandAmerica can be found online at http://www.landam.com.

Fremont General Corp., Santa Monica, Calif., will sell $2.9 billion in subprime loans to an unidentified buyer, booking a $100 million pretax loss on the deal.According to a new public filing, the same buyer is in "exclusive" talks to buy Fremont's $27 billion subprime servicing portfolio as well as the platform. The buyer will also buy a "portion" of Fremont's subprime production operation even though the unit stopped funding loans several weeks ago. News of the sale and talks sent Fremont's shares soaring 26% to $8.85 in the early afternoon of April 16. Fremont, the holding company for a federally insured depository, can be found online at http://www.fremontgeneral.com.

Fieldstone Investment Corp., Columbia, Md., has announced the securitization by an affiliate, Fieldstone Mortgage Investment Corp., of approximately $358 million of notes.The assets of the trust -- Fieldstone Mortgage Investment Trust, series 2007-1 -- consist of two groups of conventional, adjustable- and fixed-rate mortgage loans secured by first and second liens on residential properties that were originated by Fieldstone Mortgage Co., the origination subsidiary of Fieldstone Investment. Credit Suisse Securities (USA) LLC is the lead underwriter for the transaction. Fieldstone can be found online at http://www.fieldstoneinvestment.com.

Irwin Financial Corp., Columbus, Ohio, expects to take a loss for the first quarter, blaming conditions in the consumer mortgage market and one impaired commercial credit in Michigan."We have had two disappointments during the first quarter," said Will Miller, chairman and CEO of Irwin Financial. "While this is not a pleasant way to start the year, we believe both issues are essentially one-time events." Irwin said that while the credit quality of the company's portfolio of loans has "held up well," turmoil in the secondary market for consumer mortgages during February and March will lead Irwin to report a loss for its home equity operations. Because of the difficulty in selling some mortgage and home equity products, the company said it plans to shift approximately $170 million of loans from its held-for-sale account into its portfolio. That will result in higher credit and loss provision costs for the first quarter. The company can be found online at http://www.irwinfinancial.com.

Classes A-1 and A-2 of Diversified Asset Securitization Holdings I LP have been downgraded from BB to B/DR1 by Fitch Ratings.The downgrades stem from continued deterioration in the quality of DASH I's collateral portfolio, the rating agency said. DASH I is a collateralized debt obligation that was originated and managed by Asset Allocation & Management LLC, which closed Dec. 18, 1999, Fitch said. The portfolio backing the CDO consists of residential and commercial mortgage-backed securities, asset-backed securities, and other CDOs.

Fitch Ratings has assigned an "Acceptable" construction loan servicer rating to Wachovia Securities, Charlotte, N.C.Construction loan servicing at Wachovia is handled by the construction loan administration and construction management groups. "The rating considers Wachovia's extensive history of construction loan administration and servicing, its experienced and tenured management and staff, and the strong financial resources provided by its parent, Wachovia Corp.," the rating agency said. Fitch rates construction loan servicers "Acceptable" or "Unacceptable." It can be found online at http://www.fitchratings.com.

Colonial Savings, Fort Worth, Texas, has purchased the servicing rights on 18,431 home loans with a combined principal balance of approximately $1.7 billion from a Midwestern bank.Colonial Savings said the acquisition increases its servicing portfolio by 15% on a dollar-volume basis to $12.7 billion. The effective date of the transfer will be June 1. James DuBose, president and chief executive officer of Colonial Savings, said the company estimates that the addition of the new loans will reduce its per-loan average cost of servicing by 16%.

Of the $43 billion in mortgage loans originated in March by Countrywide Financial Corp., Calabasas, Calif., $26 billion were for refinancings, a $3.4 billion increase from the refi level recorded the previous March, according to the company.This contributed to an overall increase of 5% in volume, Countrywide reported. Purchase loans fell from $19 billion in March 2006 to $17 billion last month. Home equity fundings were down 5%, nonprime fundings were down 29%, and originations of option adjustable-rate mortgages totaled $3.5 billion, down from $8.8 billion a year ago. Countrywide's pipeline at the end of March totaled $69 billion, up $5 billion from that of March 2006. The servicing portfolio totaled $1.4 trillion, compared with $1.2 trillion a year earlier, and delinquencies on the portfolio stood at 4.29% for March, compared with 5.02% for December 2006 and 3.68% for March 2006. "Historically, delinquencies have trended downward from the fourth quarter to the first quarter due to seasonality," said David Sambol, Countrywide's president and chief operating officer. "While current market conditions are creating short-term volatility in our residential mortgage business, management believes the company is well-positioned to capitalize upon the longer-term opportunities that are being created as the marketplace rationalizes." The company can be found online at http://www.countrywide.com.