Servicing

Kirkpatrick Lockhart Nicholson Graham, which has a large mortgage banking practice, is merging with Preston Gates & Ellis, which is known for its technology practice and its securities expertise in taking growth companies public.The merger becomes effective Jan. 1, and the name of the combined firms will be Kirkpatrick & Lockhart Preston Gates Ellis LLP. PG&E is based on the West Coast and has offices in Asia. It also has a government affairs office in Washington. KLNG is based on the East Coast and in London.

Class B-3 of Nomura Asset Acceptance Corp. mortgage pass-through securities, series 2001-R1, has been downgraded from BB to B by Fitch Ratings.Fitch also affirmed the ratings on five other classes in the transaction, which consists of loans insured or guaranteed by the Federal Housing Administration and the Department of Veterans Affairs. The downgrade resulted from higher-than-expected collateral losses and reflects deterioration in the relationship between loss expectations and credit support levels, the rating agency said.

Class B-8 of DLJ Commercial Mortgage Corp.'s pass-through certificates, series 1999-CG2, has been downgraded from B-minus to CCC and assigned a Distressed Recovery rating of DR3 by Fitch Ratings.In addition, Fitch affirmed the ratings on 13 other classes in the transaction. The downgrade is a result of increased loss expectations on the specially serviced loans as a result of recent valuations on specially serviced assets, Fitch said. There are four loans in special servicing and significant losses are expected, the rating agency said. The largest specially serviced asset is a multifamily property in Marietta, Ga., that is real estate owned. The second-largest is an REO office property in King of Prussia, Pa., and the third-largest is a retail property in Boaz, Ala., that is also REO.

GMAC Mortgage LLC, Horsham, Pa., has been chosen to handle the interim subservicing for Metrocities Mortgage LLC, a residential mortgage lender based in Sherman Oaks, Calif.GMAC Mortgage said it will provide interim subservicing for Metrocities' full line of first mortgages, closed-end seconds, and home equity lines of credit. GMAC can be found online at http://www.gmacsolutions.com, and Metrocities can be found at http://www.metrocitiesmtg.com.

McDonald Computer Corp., a Southfield, Mich.-based provider of automated loan servicing technology to the mortgage industry, has added a reverse-mortgage servicing component to its system.The company said the new reverse mortgage capabilities in its flagship product, Servicing/T.I.M.E., can manage all types of home equity conversion mortgages, including FHA-backed loans. "According to the National Reverse Mortgage Lenders Association, the number of reverse mortgages made in the U.S. in 2006 grew 77%," noted Jim McDonald, founder and president of McDonald Computer Corp.

The delinquency rate for single-family mortgage loans rose to 4.67% in the third quarter, up 28 basis points from the second quarter and 23 basis points from one year earlier, according to the Mortgage Bankers Association.The increase was spread across all major loan types, most notably for subprime credit quality and Federal Housing Administration loans, the MBA said. The percentage of loans in foreclosure and entering the foreclosure process also rose. The MBA said 1.05 of all loans outstanding were in foreclosure at the end of the third quarter, six basis points higher than at the end of the second quarter. MBA chief economist Doug Duncan said the increase was anticipated, given the slowdown in home price appreciation. "It is important to remember that delinquency and foreclosure rates have been quite low the last two years," he said.

The preferred stock of Thornburg Mortgage Inc., Santa Fe, N.M., has been downgraded from BB-minus to B-plus by Fitch Ratings, and its rating outlook has been revised from Positive to Negative.Fitch also affirmed Thornburg's BB issuer default and senior unsecured notes ratings and assigned a BB-minus rating to its unsecured subordinate notes. The downgrade was attributed to "the priority position of the subordinate debt in relation to the preferred stock in the event of default and the widening gap between the first dollar of rated senior unsecured debt and the last dollar of preferred stock resulting from the recent $100 million offering of series D preferred stock." The Negative outlook resulted from several factors, including management's "aggressive use of leverage," declining "coverage metrics," and spread compression, Fitch said. The rating agency can be found online at http://www.fitchratings.com.

Class B-2 of RAAC series 2004-SP2 Trust has been downgraded from B2 to Ca by Moody's Investors Service and classes M-3 and B-1 from the same transaction have been placed on review for possible downgrade.The actions were attributed to a higher-than-expected loss on a single loan that led to a writedown of a portion of the class B-2 balance. The underlying collateral consists of seasoned fixed-rate first-lien mortgage loans. Moody's can be found on the Web at http://www.moodys.com.

Irwin Financial Corp., Columbus, Ind., has reported the completion of a private placement of $30 million of 30-year trust preferred securities issued in two series by IFC Capital Trust X and IFC Capital Trust XI.The Capital Trust X securities bear interest at a fixed rate of 6.532% (175 basis points over the five-year swap rate) for the first five years and then convert to a floating rate of 175 bps over the three-month London interbank offered rate, Irwin said. The Capital Trust XI securities bear interest at a floating rate of 174 bps over three-month LIBOR. The company said it used the proceeds to redeem the entire $30 million of Irwin's 9.95% Capital Trust V securities. Irwin can be found online at http://www.irwinfinancial.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 fourth quarter, up from $0.47 per share in the third quarter.The board also declared the following preferred stock dividends per share: $0.59 on its 1996 and 1998 variable-rate stock; $0.7675 on its 6.14% 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; $0.64528 on its March 2001 variable-rate stock; $0.48125 on its May 2001 variable-rate stock; $0.75 on its 6% stock; $0.7125 on its 5.7% stock; $0.75 on its 2006 variable-rate stock; and $0.8025 on its 6.42% stock; and $0.303 on its 5.9% stock. The dividends will be payable on Dec. 29 to stockholders of record as of Dec. 18. Freddie Mac can be found online at http://www.freddiemac.com.