Servicing

The Hispanic National Mortgage Association has enlisted Deutsche Bank as a joint venture partner in a new correspondent bank that will purchase low-downpayment mortgages made to Hispanics and other immigrant borrowers.Based in San Diego, the new HNMA Funding is jointly owned and capitalized by HNMA and Deutsche Bank. The company said its programs will enable lenders to offer interest rates "significantly lower" than the subprime rates many Hispanic borrowers have historically been offered. "By creating a new liquidity vehicle for mainstream lenders, we are addressing one of the major impediments to Hispanic homeownership and demonstrating our commitment to this market and our willingness to accept and retain credit risk," said HNMA Funding chief executive Leonardo Simpser. HNMA recently unveiled a new automated underwriting system that is specifically calibrated to approve loans to Hispanic and immigrant borrowers with little or no traditional credit history, as well as applicants who don't have a Social Security number -- but do have a Taxpayer Identification Number.

GMAC Mortgage LLC, Horsham, Pa., has been chosen to handle the interim subservicing for Loan Center of California Inc., a wholesale mortgage company specializing in nontraditional mortgage products.LCC, a privately held mortgage bank based in Suisun City, Calif., focuses on payment-option adjustable-rate mortgages linked to the monthly Treasury average or the London interbank offered rate, as well as on first- and second-lien alternative-A home loans originated in California. Ed Blanch, president and chief executive officer of LCC, said the company picked GMAC Mortgage for its "unique expertise in servicing alternative loan products." GMAC can be found online at http://www.gmacsolutions.com, and LCC can be found at http://www.rateprice.com.

Three classes of MASTR Second Lien Trust 2005-1 mortgage pass-through certificates have been downgraded by Fitch Ratings.The downgrades were as follows: class M-8, from BB to B-plus; class M-9, from BB to B; and class M-10, from B to C. Class M-10 was also assigned a Distressed Recovery rating of DR5. In addition, the ratings on eight other classes in the transaction were affirmed. The downgrades were attributed to the failure of overcollateralization to reach the target level, and to the fact that monthly losses have exceeded excess spread in four of the last five months, Fitch said. The rating agency can be found online at http://www.fitchratings.com.

The market composite index, an overall measure of mortgage applications, declined 3.7% to 623.6 in the week ending Nov. 17 from 647.5 one week earlier on a seasonally adjusted basis.The seasonally adjusted refinancing index decreased by 4.3% from the previous week and the home purchase component of the index fell 2.8%, even as the average contract interest rate for 30-year mortgages decreased to 6.13% from 6.15% a week earlier. Still, the refinancing share of mortgage activity increased to 48.6% of applications, up from 48.0% the previous week, the Mortgage Bankers Association said. That was the highest refinancing share since February of 2005. The MBA can be found on the Web at http://www.mortgagebankers.org.

RealtyTrac, an online foreclosure marketplace based in Irvine, Calif., has reported that new properties entering some stage of foreclosure reached the highest level of the year in October and were 42% higher than the level recorded a year earlier.The company's U.S. Foreclosure Market Report indicates that 115,568 new foreclosure properties were added to the rolls in October. "So far this year more than 1 million properties have entered some stage of foreclosure nationwide, up 27% from the same time last year," said James J. Saccacio, RealtyTrac's chief executive officer. "Monthly foreclosure filings hit their highest mark of the year so far in October, mirroring the trend from last year, when the most foreclosures of the year were also reported in October." The company said Colorado, Nevada, and Georgia recorded the highest foreclosure rates in October. RealtyTrac can be found online at http://www.realtytrac.com.

Thrift originations of single-family loans increased by 1% in the third quarter from those of the previous quarter, but loan production was down 8% from that of a year earlier.Thrifts originated $149.9 billion in one- to four-family loans in the third quarter, down from $181.3 billion in the third quarter of last year, according to the Office of Thrift Supervision. Despite the slight increase, the percentage of adjustable-rate mortgages and refinancing activity fell noticeably. An estimated 26% of thrift originations were adjustable-rate mortgages, compared with 37% in the previous quarter, the OTS reported. Refinancings accounted for 27% of originations, down from 33% in the second quarter. The 853 OTS-supervised thrifts posted $4.29 billion in earnings, despite a $195.6 million hit due to a decline in the value of servicing fees. Nevertheless, it was the seventh consecutive quarter in which thrift earnings topped $4 billion.

An annual study by First American Real Estate Solutions finds that markets with a high rate of foreclosure sales also have deeper sales discounts when foreclosed property is sold.The study compares the relationship between foreclosures as a percentage of total sales and the size of the discount buyers typically receive when purchasing foreclosed properties. In Orange County, Calif., foreclosure sales accounted for 0.5% of total sales, and the buyer typically paid a median discount of 3.8%. Whereas in Baltimore, foreclosures made up 8.9% of total sales and the median discount was 20%. First American said the study shows a strong tendency toward increased foreclosure prevalence and deeper discounting for properties in the lower home-price tiers. "Discounts tend to be deeper in markets where foreclosures comprise 8% or more of all sales, regardless of geographic location or market type," said Christopher Cagan, director of research and analytics at First American Real Estate Solutions.

Doral Financial Corp., a mortgage lender based in San Juan, Puerto Rico, has announced the selection of Bear Stearns and JPMorgan to assist the company in evaluating options for refinancing its $625 million floating-rate senior notes that mature in July 2007.In September, Doral announced an agreement with the Securities and Exchange Commission under which it will pay a $25 million civil penalty in connection with the SEC's probe of Doral's restatement of financial results for 2000-2004. Doral's restatement slashed $694.4 million from its retained earnings through the end of 2004 to correct the accounting for certain mortgage loan sales and the valuation of its interest-only strips. Doral can be found online at http://www.doralfinancial.com.

The Federal Home Loan Bank of Chicago purchased $303 million in loan participations from other FHLBanks in honoring outstanding commitments over the first nine months of this year. (MortgageWire reported Nov. 14 that the bank had stopped buying mortgage loans from other FHLBanks.)Earlier this year, the FHLBank said it would stop making new commitments under its Mortgage Partnership Finance program. A bank spokeswoman also pointed out that the Chicago bank purchased nearly $1 billion in mortgage loans from its members during the same period.

Three certificates from two deals issued by Ameriquest Mortgage Securities Inc. have been downgraded by Moody's Investors Service.The downgrades were as follows: series 2002-3, class M-4, from B3 to Caa2; Quest Trust 2004-X3, class M-6, from Ba1 to Ba2; and Quest Trust 2004-X3, class M-7, from Ba2 to B1. The downgrades were prompted by declines in overcollateralization to below-target levels, the rating agency said.