Servicing

Servicing has a major effect on the performance of a commercial real estate construction loan, according to Fitch Ratings in a new report outlining its criteria for rating construction loan servicers.Fitch said its analysis of construction loan servicers will focus on five main functions: loan closing; servicing; construction risk management and underwriting; disbursement processing and control; and subperforming loan management. "Companies that have been servicing construction loans for at least five years and have demonstrated expertise in managing a diverse portfolio of construction loans are viewed favorably," said Fitch director Rich Carlson. "By the same token, however, Fitch also expects highly rated servicers to maintain awareness of current servicing trends by participating in industry conferences, forums, and associations that actively shape industry standards." Fitch rates construction loan servicers as Acceptable or Unacceptable, and Mr. Carlson said the rating agency will only consider rating securitizations of such loans if the servicer is rated Acceptable. Fitch can be found online at http://www.fitchratings.com.

Fannie Mae is scheduled to release its 2004 10-K financial annual report after the stock market closes on Dec. 6.Fannie Mae also said it will hold a conference call at 1 p.m. on Dec. 7. Several Fannie executives, including Daniel Mudd, president and chief executive officer of the government-sponsored enterprise, chief financial officer Robert Blakely, and senior vice president David Hisey are scheduled to discuss the filing with analysts and investors during the call. Details for listening to the conference call can be found at www.fanniemae.com.

Class M2 of Ameriquest Mortgage Securities Inc. series 2002-C has been downgraded from B to CC/DR4 by Fitch Ratings, and two classes from another AMSI home equity issue have been placed on Rating Watch Negative.Classes M5 and M6 of series 2003-6 were placed on watch. In addition, Fitch affirmed the ratings on seven classes from the two Ameriquest transactions. The negative rating actions were attributed to monthly losses that have generally exceeded excess spread and caused a deterioration in the amount of overcollateralization.

Two classes of the Long Beach Mortgage Loan Trust series 2003-1 subprime mortgage deal have been downgraded by Fitch Ratings.Class M-3 was downgraded from BBB to BB-plus, and class M-4 was downgraded from BB-minus to B. In addition, the ratings on two other classes were affirmed. The downgrades reflect continued deterioration in the relationship between credit enhancement and loss expectations, the rating agency said. The performance of the deal has also been hurt by a growing concentration of loans secured by manufactured homes, Fitch said.

Two classes of First Franklin Financial Corp. residential mortgage-backed certificates, series 2001-FF2, have been downgraded by Fitch Ratings, and another class has been placed on Rating Watch Negative.Class M-2 was downgraded from A-minus to BBB-minus, and class M-3 was downgraded from BBB-minus to BB-minus. Class M-1 was placed on Rating Watch Negative, and the ratings on two other classes were affirmed. Fitch attributed the negative rating actions to a deteriorating relationship between credit enhancement and expected losses. Fitch can be found online at http://www.fitchratings.com.

Two classes of Ocwen Residential MBS Corp. series 1999-R1 mortgage-backed securities have been downgraded by Moody's Investors Service.Class B4-A was downgraded from Ba2 to B1, and class B5-A was downgraded from Ca to C. The downgrades were attributed to weak collateral performance. Moody's said recent losses on the pool and high expected loss severities on the remaining collateral contributed to the rating actions. The certificates are secured primarily by first-lien, seasoned reperforming collateral, as well as loans with high loan-to-value ratios.

Three classes from Equity One ABS Inc. mortgage pass-through certificates issued in 2002 have been downgraded by Fitch Ratings.The downgrades were as follows: series 2002-3, class B-1, from BBB-plus to BB, and class B-2, from BB to B; and series 2002-4, class B, from BBB to BBB-minus. Fitch also affirmed the ratings on six classes in the two Equity One subprime transactions. The rating agency attributed the downgrades to a deterioration in the relationship between credit enhancement and expected losses. Fitch can be found online at http://www.fitchratings.com.

Zacks Equity Research, Chicago, announced Dec. 1 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 had a disappointing third quarter, reporting funds from operations that were $0.04 per share lower than Zacks' expectations. "Liberty is focusing on development which could prove beneficial down the road, although most projects will not add to earnings in the near term," Zacks said. "We rate the company a sell due to our expectation of little to zero FFO growth in 2007." Zacks can be found online at http://www.zacks.com, and Liberty Property Trust can be found at http://www.libertyproperty.com.

Two certificates from Structured Asset Securities Corp.'s series 2002-BC1 securitization have been downgraded by Moody's Investors Service.Class M3 was downgraded from Ba1 to B2, and class B was downgraded from B1 to Ca. Moody's attributed the downgrades to credit enhancement levels that are deemed to be low given the projected losses on the underlying pools. The transaction is backed primarily by first-lien subprime mortgage loans. The rating agency can be found online at http://www.moodys.com.

Umbrella Bancorp Inc., Chicago, has announced that Umbrella Mortgage Inc., a wholly owned subsidiary primarily focused on the origination of reverse mortgages, has opened its doors.The company is a full-service mortgage brokerage operation that will initially originate mortgage loans in Illinois and Colorado, the parent company reported. It will offer reverse mortgage products offered by the Federal Housing Administration, Fannie Mae, and other third-party investors, as well as a full range of traditional mortgage products, Umbrella Bancorp said. Many of its employees are former members of the retail and wholesale lending departments of Flower Bank FSB, which Umbrella Bancorp sold to American Home Mortgage Investment Corp. earlier this year. Umbrella Mortgage can be found on the Web at http://www.umbrellareverse.com.