Servicing

The New York Court of Appeals has ruled that the MERS mortgage is a valid method of transferring rights from the borrower to MERS, the industry-owned system for tracking ownership of mortgage loans and servicing rights.MERS reported that the court affirmed the Appellate Division's decision that county clerks must record MERS mortgages, assignments, and lien discharges as required under New York real property law. In a 7-0 decision, the court found that the model MERS mortgage (as well as the mortgage assignment) "satisfies the limited requirements of the recording statute," MERS said. The court also found that MERS lien discharges comply with New York state law. MERS, based in Vienna, Va., can be found online at http://www.mersinc.org.

Morgan Stanley has slashed 170 jobs at its newly acquired subprime unit, Saxon Mortgage, including president and chief executive Mike Sawyer, MortgageWire has learned.One source familiar with Saxon said senior managers Jeff Parkhurst (wholesale), John Trapp (underwriting), and Dick Shepherd (legal) have also left the company. A spokesman for Morgan Stanley confirmed the job cuts. The investment banker officially took control of the publicly traded Saxon Mortgage on Dec. 4. The Richmond, Va.-based firm ranks among the top 30 subprime lenders and servicers, according to the Quarterly Data Report. Kevin Rodman, a Morgan Stanley executive, will replace Mr. Sawyer. The Morgan spokesman said Saxon will focus its efforts on "wholesale lending and servicing." It recently closed Saxon's retail division and is consolidating different servicing locations into its platform in Fort Worth, Texas.

Two classes of notes issued by Capital Guardian ABS CDO I Ltd., a collateralized debt obligation partly composed of residential and commercial mortgage-backed securities, have been downgraded by Fitch Ratings.Class B was downgraded from BBB to B and assigned a Distressed Recovery rating of DR2, and class C was downgraded from CC/DR5 to C/DR6. In addition, Fitch affirmed the ratings on three other classes in the deal. The rating agency attributed the lowered ratings to "severe collateral deterioration" and significant par loss after the sale of a defaulted asset. The CDO consists of RMBS, CMBS, asset-backed securities, CDOs, and corporate debt, the rating agency said. Fitch can be found online at http://www.fitchratings.com.

Mission West Properties Inc., a real estate investment trust based in Cupertino, Calif., has announced that it plans to withdraw its common stock from listing on NYSE Arca Inc., formerly the Pacific Exchange.Mission West's common stock will continue to be listed on the American Stock Exchange. The decision was aimed at streamlining operations and eliminating duplicative administrative requirements that come with dual listings, the REIT said. Mission West, which specializes in commercial research-and-development properties, can be found online at http://www.missionwest.com.

Over the past few weeks, insiders at Countrywide Financial Corp. -- including chairman and chief executive officer Angelo Mozilo -- have been exercising millions of dollars in options.According to trading records, Mr. Mozilo exercised 70,000 options on Dec. 15, grossing almost $3 million on the deal. (He purchased the options for $9.60 apiece and then sold shares in the open market at $41.47.) On Dec. 18, Countrywide president and chief operating officer David Sambol exercised 14,000 options, grossing $375,340. Over the past six months, Countrywide insiders have sold almost 6 million shares. The company can be found on the Web at http://www.countrywide.com.

Freddie Mac has announced that it will voluntarily withdraw its common stock from listing on NYSE Arca Inc., formerly the Pacific Exchange.Freddie Mac's common stock will continue to be listed on the New York Stock Exchange. The decision was aimed at eliminating duplicative administrative requirements that come with dual listings as a result of the NYSE Group's recent merger with Archipelago Holdings, the parent company of NYSE Arca, Freddie Mac said. NYSE Arca will continue trading Freddie Mac common stock on an unlisted trading privilege basis. Freddie Mac can be found on the Web at http://www.freddiemac.com.

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.