Servicing

The New York Stock Exchange has informed ECC Capital Corp., a real estate investment trust headquartered in Irvine, Calif., that trading in the company's common stock will be suspended and the exchange will take action to delist it prior to the market's opening on March 15.On March 1, NYSE warned ECC that it had fallen below the exchange's continued listing standard related to minimum share price. NYSE requires firms to have a minimum average closing price of $1 per share during a 30-day period. ECC said it was in contact with NYSE Regulation Inc. (the Big Board's regulatory unit) regarding the noncompliance issue but was unsuccessful in its efforts to avoid suspension and delisting. ECC Capital is considering appealing the latest ruling. When the stock is suspended, ECC Capital expects it to be quoted on the OTC Bulletin Board. ECC sold its mortgage production unit in February and now exists as the holder of a portfolio of mortgage investments.

The New York Stock Exchange on Tuesday halted trading in the common and preferred stock of ailing subprime giant, New Century Financial Corp., Irvine, Calif. Investment banking sources told MortgageWire that they expect the lender to file for bankruptcy protection shortly. The non-depository REIT is the subject of a criminal probe into its accounting and recently disclosed that the Securities and Exchange Commission is now investigating the company. Late last week most of its warehouse lenders stopped financing the company. It has $40 billion in servicing rights on its books.

Countrywide Financial Corp., the nation's eighth largest subprime table-funder, has cut 108 jobs in its wholesale subprime division, citing a need to align the lender's "workforce with the recent changes in the mortgage market."The company declined to comment further and would not disclose how many of the jobs eliminated belong to account executives. Last week the Calabasas-based Countrywide disclosed that 19% of its $119 billion subprime servicing portfolio was in some stage of delinquency. According to the Quarterly Data Report, CFC ranks first among all subprime servicers, and third among lenders.

Accredited Home Lenders, the nation's 12th largest subprime funder, said it has been hit with millions of dollars in margin calls and is now exploring "various strategic options."As MortgageWire went to press, its stock had been decimated on the news, plummeting 54% to a new 52-week low: $5.19. Its 52-week high is $60. In a statement, the San Diego-based non-depository said it has paid $190 million in margin calls since January to satisfy its warehouse lenders. Meanwhile, the company also is seeking waivers on its warehouse covenants. "There can be no assurance that the company will be successful in receiving any of the acquired waivers," says an Accredited statement. The lender is now in the process of cutting costs and laying off workers. Among subprime servicers, it ranks 23rd, according to the Quarterly Data Report.

At the end of 2006, the percentage of home loans that were at least 30 days overdue rose to 4.95%, up from 4.67% at the end of the third quarter, according to the Mortgage Bankers Association's quarterly delinquency survey.The foreclosure rate also rose by 14 basis points, with 1.19% of all loans outstanding being at some point in the foreclosure process. The number of loans entering the foreclosure process rose to a record high of 0.54%, up eight basis points from the third quarter. Delinquencies rose across the board, but the steepest rise in late payments was seen in the subprime and FHA loan categories. The FHA delinquency rate reached a record high in the fourth quarter of 13.46%, up from 12.80% in the third quarter, and 13.33% of subprime loans were overdue, up from 12.56%. In addition, the MBA said that the delinquency rate on subprime adjustable-rate mortgages jumped by 122 basis points to 14.44%. MBA chief economist Doug Duncan said that given the MBA's forecast of "below-trend economic growth and a slowly recovering housing market," the MBA expects delinquency and foreclosure rates to level off toward the end of 2007.

A trio of real estate investment trusts were profiled in the Zacks Growth and Income Profit Track release for March 9.This strategy of Zacks Investment Research Inc., Chicago, looks for stocks with unusually high dividend yields. American Home Mortgage Investment Corp., Melville, N.Y., and the only residential mortgage lender of the three, has a current dividend yield of 16.60%. Crystal River Capital Inc., New York, has a dividend yield of 10.56%, and Deerfield Triarc Capital Corp., Chicago, has a dividend yield of 11.25%.

Moody's Investors Service has placed on review for possible downgrade two classes of certificates from two subprime/home equity Aegis mortgage securitizations, one from a deal issued in 2003 and another from a deal issued in 2004.Specifically, the tranches being reviewed are class B of Aegis Asset Backed Securities Trust 2003-2, which currently has a Baa2 rating; and class B3 of Aegis Asset Backed Securities Trust 2004-1, which currently has a Baa3 rating. "Credit enhancement available to the two Aegis deals has declined due to losses and stepdown, and is expected to decline further due to continued losses," Moody's said. Both deals are backed by subprime credit fixed and adjustable rate collateral, as well as small percentages of second lien mortgages, according to the rating agency.

Ocwen Financial Corp. has gotten commitments from investors to form and capitalize a new unit to invest in the lower tranches and residuals of residential mortgage-backed securities, related mortgage servicing rights, ABX Index protection and other similar assets.Affiliates of Angelo, Gordon & Co., a private investment management firm; Metalmark Capital LLC, a private equity firm established by the principals of Morgan Stanley Capital Partners; and others have committed to forming and capitalizing the new business, Ocwen Structured Investments LLC. The investors will put up to $250 million into the unit, which is expected to raise a total of $300 million in capital. The commitments are subject to being called by the new unit's board in the next 18 months. "Metalmark is excited about partnering with the leading independent servicer in the mortgage industry to create OSI, particularly during this period of industry dislocation and capital scarcity," said Howard Hoffen, Metalmark Capital's chairman and chief executive officer.

Morgan Stanley has pulled a $265 million line of credit from ailing subprime giant New Century Financial Corp., a decision that likely will force the company to file for bankruptcy protection.The LOC was made just last week. According to documents filed with the Securities and Exchange Commission Monday morning, the Irvine-based NCFC also revealed that several of its financiers -- Bank of America, Citigroup, Credit Suisse, Deutsche Bank -- had declared the non-depository in default on warehouse lines or other financial obligations. Documents show that NCFC owes Credit Suisse almost $1 billion due to a repurchase obligation. Meanwhile, some Wall Street firms are terminating NCFC's servicing rights, which could reduce cashflow at the company's servicing unit. According to the just-released Quarterly Data Report, NCFC has $40 billion in servicing rights on its books, ranking 14th nationwide. Among subprime funders it ranks second. Its stock had been halted in trading as MortgageWirewent to press. A spokeswoman did not return telephone calls.

Anworth Mortgage Asset Corp., a real estate investment trust based in Santa Monica, Calif., has reported an unaudited net loss to common stockholders of $4.3 million ($0.09 per share) for the fourth quarter, compared with a net loss to common stockholders of $986,000 ($0.02 per share) a year earlier.Despite the loss, Lloyd McAdams, Anworth's chairman, president, and chief executive officer, said the fourth quarter "was one of monthly improvement" that the company expects to continue through the first quarter and believes "will produce a break-even to a small profit." Anworth said its portfolio of agency mortgage-backed securities totaled approximately $4.7 billion as of Dec. 31, allocated as follows: adjustable-rate mortgages, 26%; hybrid ARMs, 58%; fixed-rate MBS, 16%; and floating-rate collateralized mortgage obligations, less than 1%. Anworth can be found on the Web at http://www.anworth.com.