Servicing

Three classes of notes issued by Northlake CDO I, a collateralized debt obligation that includes mortgage-backed securities, have been downgraded by Fitch Ratings.The downgrades were as follows: class II floating-rate notes, from AA to A; class III floating-rate notes, from BBB to BB; and preference shares, from BB to C. The preference shares were also assigned a Distressed Recovery rating of DR6, and the ratings on two other classes in the deal were affirmed. Fitch attributed the downgrades to "an increase in the par value of the assets for which Fitch does not expect a full par recovery." The transaction, a CDO managed by Deerfield Capital Management, is composed of residential and commercial MBS, asset-backed securities, and CDOs. The rating agency can be found online at http://www.fitchratings.com.

The Independent Community Bankers of America has teamed up with wholesaler Taylor, Bean & Whitaker Mortgage Corp. to give its member banks an option to sell their loans servicing-released and achieve better pricing and service for their mortgage customers."It is the philosophy of Taylor, Bean, Whitaker that attracts us to them because they have a community bank focus," said ICBA Mortgage senior vice president Elizabeth Deal. TB&W offers clients a Web-based origination system called CommunityBankOnline that allows the bank's officers to maintain control of customer relationships throughout the origination and servicing of the loan. The Ocala, Fla.-based wholesaler will not cross-sell to the banks' customers and the customers will still make their mortgage payments to the bank, Ms. Deal explained. ICBA's mortgage subsidiary already has alliances and partnerships with Fannie Mae, Freddie Mac, and IndyMac Bank for member banks that want to sell their loans and retain the servicing. The ICBA can be found online at http://www.icba.org, and TB&W can be found online at http://www.taylorbean.com.

Countrywide Financial Corp., Calabasas, Calif., has announced an agreement by one of its subsidiaries to acquire the assets and assume certain liabilities of Chicago-based CCM Futures LLC, a futures trading broker.The terms of the deal were not disclosed. CCMF trades on the Chicago Board of Trade and the Chicago Mercantile Exchange. "The acquisition of CCMF will strengthen our existing futures Introducing Broker business by expanding our product line and customer base, while diversifying our revenue streams," said Ron Kripalani, president and chief executive officer of Countrywide Capital Markets and executive managing director of Countrywide Financial. Countrywide can be found on the Web at http://www.countrywide.com.

Subprime wholesaler ResMae Mortgage, Brea, Calif., has filed for bankruptcy protection, but has agreed to sell certain assets to Credit Suisse for an undisclosed sum.Industry sources said ResMae -- like many subprime funders -- has been hurt by buyback requests from Wall Street. According to the firm's bankruptcy filing, its unsecured creditors include warehouse providers Barclays Bank, Merrill Lynch, and others. As of MortgageWire's deadline, ResMae officials could not be reached for comment. Credit Suisse, which is not listed in the filing as a large unsecured creditor, declined to comment. On Feb. 12 ResMae filed a voluntary petition for reorganization. The asset sale to Credit Suisse will require court approval. The Wall Street firm, which also operates a subprime wholesale platform, has agreed to provide warehouse financing to ResMae allowing the nondepository "to operate in a normal manner during the reorganization," according to a statement released by the lender. According to the Quarterly Data Report, ResMae ranks 23rd among all subprime funders and 30th among servicers. ResMae is one of a dozen or so nondepository subprime lenders that have failed in the past 60 days. The company can be found on the Web at https://www.resmae.com.

The class C notes issued by Fulton Street CDO Ltd. and Fulton Street CDO Funding Corp. and Sunrise CDO I Inc. have been downgraded from B/DR1 to B-minus/DR1 by Fitch Ratings.The downgrade was based on declining performance measures, such as overcollateralization ratios and weighted average coupons, Fitch said. The transaction is a collateralized debt obligation supported by residential and commercial mortgage-backed securities, asset-backed securities, corporate debt securities, and CDOs.

Class B-2 of Specialty Underwriting & Residential Finance asset-backed certificates, series 2003-BC1, has been downgraded from BBB to BB by Fitch Ratings.In addition, Fitch affirmed the rating on class B-3 of series 2005-AB1 and removed it from Rating Watch Negative. The rating agency also affirmed the ratings on 13 other classes from the two SURF transactions. The downgrade was attributed to a deteriorating relationship between credit enhancement and loss expectations. SURF acts as program administrator for the seller, Merrill Lynch Mortgage Lending Inc., and its loan acquisition program facilitates the purchase by the Merrill Lynch company of eligible nonconforming loans from various SURF-approved originators, Fitch said.

Meanwhile, foreclosures in the Southeast and the Southwest have already exceeded half of those recorded in the first quarter of 2006, according to ForeclosureS.com.Florida was the hardest-hit state in the Southeast, with nearly 11,500 foreclosure filings in January, accounting for over half the region's 20,199 filings, the company reported. In the Southwest, 50,404 foreclosure filings were recorded in January, compared with 94,631 in the entire first quarter of last year. Alexis McGee, president of the firm, said California (with 25,107 filings), Texas (with 10,296), and Colorado (with 4,968) are still among the top five states nationally in foreclosures, but noted improvement elsewhere in the region. "In Oregon, Washington, Oklahoma, and Arkansas, the numbers of filings actually are flat to down," she said. "And even in Colorado, where filings typically have gone through the roof, thus far this quarter the state's filings are less than a third of the total 16,006 for the entire first-quarter 2006."

Foreclosure filings are mounting in the Northeast, which recorded about two-thirds as many in January as in the entire first quarter of last year, according to ForeclosureS.com, a Fair Oaks, Calif.-based investment advisory firm.The company said the region could experience a surge of more than 50% in foreclosure filings this year if the pace continues unabated. Massachusetts surpassed New York in January as the state with the most foreclosures in the region, recording 4,153 filings compared with the Empire State's 3,062. "The numbers sound bleak, but there is a light at the end of the tunnel," said Alexis McGee, president of the firm. "As I've said before, the worst is over. Markets have bottomed. We're just not through yet with the aftereffects of all the people who used creative financing to buy homes beyond their means." The company can be found online at http://www.foreclosures.com.

RealtyTrac, an online foreclosure marketplace based in Irvine, Calif., has reported that new foreclosure filings rose 19% in January and were 25% higher than the level recorded a year earlier.The company's U.S. Foreclosure Market Report indicates that 130,511 new foreclosure properties were added to the rolls in January. "January's foreclosure number represented the highest monthly number we've seen since we began issuing this report two years ago," said James J. Saccacio, RealtyTrac's chief executive officer. "The month-over-month increase is similar to what we saw last January, when foreclosures shot up 27% from the previous month. However, the year-over-year increase of 25% is well below the 45% annual increase we saw in January last year." The company said Nevada, Michigan, and Georgia recorded the highest foreclosure rates in January. RealtyTrac can be found online at http://www.realtytrac.com.

Capstead Mortgage Corp., Dallas, has reported a net loss attributable to common stockholders of $16.4 million ($0.87 per share) for 2006, compared with net income available to common stockholders of $36.9 million ($1.96 per share) in 2005.Capstead attributed the loss to payment of preferred-share dividends totaling $20.3 million. For the fourth quarter, the company reported a net loss attributable to common stockholders of $2.7 million ($0.14 per share), compared with net income available to common stockholders of $33.9 million ($1.80 per share) a year earlier. The company said its financing spreads have declined significantly over the recent two-year period of rising short-term interest rates and are "only now" beginning to improve. "Although our operating results have been disappointing in the wake of this prolonged period of Federal Reserve interest rate tightening, we have remained focused on our core investment strategy of investing in a large portfolio of residential [adjustable-rate mortgage] securities," said Andrew F. Jacobs, Capstead's president and chief executive officer. Capstead can be found on the Web at http://www.capstead.com.