Servicing

General Motors may need to contribute up to $945 million to cover delinquent mortgages made by the lending affiliates of General Motors Acceptance Corp., according to a new report by Lehman Brothers.Late last year, GM sold a controlling stake (51%) in GMAC to Cerberus Capital Management for $14.4 billion. A new Lehman report penned by analyst Brian Johnson says GM may need to make a cash contribution of $900 million to $945 million to cover loan losses at GMAC. Originally, Lehman had forecast that GM would take an additional $400 million hit on GMAC. GM and GMAC have yet to release fourth-quarter results. According to estimates made by the Quarterly Data Report, GMAC-RFC -- a correspondent buyer of mortgages -- acquired $21.7 billion in subprime loans in 2006, while its wholesale arm, Homecomings, table-funded $1.9 billion. GMAC-RFC is also the nation's second-largest warehouse provider, with lines of credit extended to several subprime funders.

Foreclosure filings declined in February for the second straight month, indicating that the worst may be over in "America's home foreclosure crisis," according to ForeclosureS.com, a Fair Oaks, Calif.-based investment advisory firm.Nationally, 106,074 filings were reported in February, down 3.4% from 109,851 in January, the company said. However, the numbers were still up nearly 65% from the 64,375 filings in February 2006. "The foreclosure numbers finally are beginning to reflect the stabilization in housing markets that we've been talking about for the last few months," said Alexis McGee, president of the firm. The company can be found online at http://www.foreclosures.com.

Freddie Mac's board of directors has announced a dividend of $0.50 per share on the corporation's voting common stock for the first quarter.The board also declared the following preferred stock dividends per share: $0.58 on its 1996 and 1998 variable-rate stock; $0.72625 on its 1997, 2001, and 2002 5.81% stock; $0.625 on its 5% stock; $0.6375 on its 1998 and 1999 5.1% stock; $0.6625 on its 5.3% stock; $0.72375 on its 5.79% stock; $0.4475 on its 1999 variable-rate stock; $0.49125 on its January 2001 variable-rate stock; $0.63125 on its March 2001 variable-rate stock; $0.48125 on its May 2001 variable-rate stock; $0.73 on its 2006 variable-rate stock; $0.75 on its 6% stock; $0.7125 on its 5.7% stock; $0.8025 on its 6.42% stock; $0.36875 on its 5.9% stock; and $0.28642 on its 5.57% stock. The dividends will be payable on March 30 to stockholders of record as of March 12. Freddie Mac can be found online at http://www.freddiemac.com.

Zacks Equity Research, Chicago, announced March 2 that Liberty Property Trust, Malvern, Pa., had been designated its "Bear of the Day," a stock expected to underperform the markets over the next three to six months.Zacks said the commercial real estate investment trust is focusing on development that "could prove beneficial down the road" but that won't add to near-term earnings. "We expect continued earnings dilution," with "little to zero" growth in funds from operations in 2007, Zacks said. "We find this troubling, as office and industrial real estate fundamentals continue to improve across the country," the research firm said. Zacks can be found online at http://www.zacks.com, and Liberty Property Trust can be found at http://www.libertyproperty.com.

Western companies such as Countrywide Financial Corp. and Wells Fargo & Co. lead the U.S. financial services industry in shareholder performance, according to an analysis released by Mercer Oliver Wyman, a risk management consulting firm.Research on risk-adjusted returns over the past five years shows that financial services companies headquartered on the West Coast and in states west of the Rocky Mountains have outperformed the rest of the U.S. industry by 60% since 2002, the firm reported. The West "substantially outperformed" the East on the firm's Shareholder Performance Index, with the West scoring a 141 and the East a 57, Mercer Oliver reported. "Though the technology industry captures most of the attention on the West Coast, our research shows that the region is building similar leadership in financial services," said Clarence Koo, managing director and head of Mercer Oliver's new San Francisco office. "As a group, Western financial firms lead the U.S. in terms of risk-adjusted shareholder performance."

Class B3 of Structured Asset Security Corp. residential mortgage-backed certificates, series 2005-S5, has been downgraded from CCC/DR2 to C/DR4 by Fitch Ratings.In addition, Fitch affirmed the ratings on 51 classes from four SASCO transactions. The downgrade was attributed to a deterioration in the relationship between credit enhancement and expected losses. The mortgage pool consists of conventional, fixed-rate, fully amortizing and balloon, second-lien residential mortgage loans. Fitch can be found online at http://www.fitchratings.com.

Seven certificates from two Countrywide securitizations of reperforming loans have been placed under review for possible downgrade by Moody's Investors Service.The affected classes from CWMBS Reperforming Loan REMIC Trust issues are as follows: series 2004-R1, classes 1B-3, 1B-4, 2B-3, and 2B-4; and series 2004-R2, classes B-2, B-3, and B-4. The review action was attributed to underperforming collateral and higher-than-expected losses. "Some of the unrated tranches have already experienced writedowns, which in turn have reduced the credit enhancement levels for the rated tranches that have a higher seniority," the rating agency said. The underlying collateral consists of reperforming 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.

AIM Investments, Houston, has announced that a proposed reorganization of AIM Select Real Estate Income Fund as an open-end fund has been approved by shareholders of the fund.The reorganization will become effective as of March 12, the company said. Shareholders of the closed-end fund will receive class A shares of the open-end fund, and for 12 months after the March 12 closing date those who redeem class A shares of the open-end fund received in connection with the reorganization will pay a 2.00% redemption fee, AIM said. The company can be found online at http://www.aiminvestments.com.

Foreclosure filings in Massachusetts reached a record high of 2,207 in January, more than double the 1,076 recorded a year earlier, according to ForeclosuresMass.com, a provider of foreclosure data based in Framingham, Mass.The company said lenders initiated foreclosure proceedings against 20,618 homeowners over the past 12 months, a 77% increase from the 12-month level recorded a year earlier. "The flood of foreclosures in Massachusetts is not only continuing, it has reached a new high," said Jeremy Shapiro, president and co-founder of ForeclosuresMass.com. ".... The fact that we are starting the year with the highest number of foreclosure filings we've ever recorded for a single month is more than significant -- it's ominous." The company can be found online at http://www.foreclosuresmass.com.

The stagnant residential production market is affecting loan purchases by Fannie Mae and Freddie Mac.In January, Fannie purchased $51 billion in mostly residential loans from its seller/servicers, a slight decline from the level recorded in the same month a year ago. Compared with December's level, though, Fannie's purchases fell 12%. Freddie acquired $44.7 billion in product during January, a 4% gain from that of a year earlier. In 2006 Fannie bought $614.7 billion in mortgages, Freddie $501.9 billion, for a combined $1.11 trillion, a 7% decline from that of 2005.