Servicing

Friedman, Billings, Ramsey Group Inc., an investment banking firm based in Arlington, Va., has reported a net after-tax loss of $67.4 million ($0.39 per share) for the third quarter that it attributed largely to various mortgage-related developments.The results contrasted sharply with net income of $23.0 million ($0.14 per share) for the third quarter of 2005. Noting that it had reclassified its mortgage loan portfolio in connection with a re-evaluation of its mortgage strategy, FBR said the result was a $146.8 million mark-to-market writedown in the value of the portfolio. The company also recorded a $20 million writedown of "other than temporary impairments" in its merchant banking portfolio, the majority of which it attributed to companies doing business in the nonprime mortgage sector. Also contributing to FBR's weakness in the third quarter was a $7.4 million after-tax loss at First NLC Financial Services, a wholly owned nonconforming mortgage lending subsidiary of FBR. The company can be found online at http://www.fbr.com.

IndyMac Bancorp Inc., Pasadena, Calif., has reported record mortgage loan volume and net earnings of $86 million ($1.19 per share) for the third quarter, compared with $78 million ($1.16 per share) a year earlier.IndyMac's mortgage loan production totaled a record $24 billion in the third quarter, up 41% from that of a year earlier, the company said. "While mortgage industry volumes continued to decline, our mortgage production hit a record level for the 11th consecutive quarter, growing 19% over the prior quarter," said Richard H. Wohl, IndyMac Bank's president. "As a result, our market share nearly doubled over last year to an estimated 3.87%, an all-time high for IndyMac, demonstrating strong progress in our core strategy of leveraging our mortgage banking infrastructure." The company said its mortgage servicing portfolio had reached $124 billion, representing 180% growth over the past two years. IndyMac can be found online at http://www.indymacbank.com.

The Prestwick Mortgage Group, Alexandria, Va., is brokering the sale of servicing rights on two bulk portfolios totaling $99 million of Fannie Mae loans.The first portfolio involves $59 million of home loans, mostly from Massachusetts, with a weighted average note rate of 5.888%, a weighted average servicing fee of 0.2634%, and an average loan balance of $148,058. All the loans are fixed-rate, and the portfolio has 38 months of weighted average seasoning. Bids are due Wednesday, Nov. 8 at 5 p.m. EST. The second portfolio totals $40 million of loans from Georgia, Florida, California, and 30 other states. The weighted average note rate is 6.597%, the weighted average servicing fee is 0.3710%, and the average loan balance is $90,784, with 55 months of weighted average seasoning. Twenty-seven loans are in foreclosure or bankruptcy, and the overall delinquency percentage is 16.82%. Bids are due Wednesday, Nov. 15 at 5 p.m. EST.

Fidelity National Information Services Inc., Jacksonville, Fla., has announced the acquisition of Watterson Prime LLC, a Bellevue, Wash.-based provider of due diligence services to financial institutions that invest in and securitize mortgage loans.The terms of the transaction were not disclosed. Fidelity said the due diligence services will be integrated with service offerings such as the FIS Hansen Quality HQ Score, a collateral risk score designed to protect clients against property valuation fraud and overvaluation risk. "This acquisition expands our product breadth and our ability to assess risk and certify the quality of mortgage portfolios," said Eric Swenson, president of the FIS Mortgage Information Services Division. "It also enables us to develop innovative products and provides us with a competitive advantage in the marketplace." The companies can be found online at http://www.fidelityinfoservices.com and http://www.wprime.com.

Mortgage lenders added 2,600 full-time employees to their payrolls in September, according to a government report, despite a slowdown in lending in the third quarter.The U.S. Bureau of Labor Statistics reported that employment in the mortgage banker/broker sector increased from a seasonally adjusted annual rate of 501,900 in August to 504,500 in September. Preliminary results from a National Mortgage News survey show that some top lenders experienced loan production declines of 30% or more, compared with loan volumes of a year earlier. Refinancing activity has remained fairly strong, at 40% of mortgage applications, according to a Mortgage Bankers Association survey. But home sales have been declining, and Friday's jobs report shows a sharp drop in construction jobs. While the homebuilders have been holding on to their core employees, the BLS reported that concrete contractors, plumbers, and other specialty trades cut 17,300 employees in September and another 30,700 employees in October. The BLS can be found online at http://stats.bls.gov.

Dutch bank ABN Amro Holding NV is entertaining offers for its U.S. mortgage division, industry sources have told MortgageWire.A spokesman for ABN Amro Mortgage, Ann Arbor, Mich. -- the nation's eighth-largest servicer, with $220 billion in receivables -- declined to discuss the matter, citing a company policy not to comment on "rumors and speculation." One investment banker told MW that, "I don't know how formal the process is, but it's definitely out there." (For full details, see the Nov. 6 issue of National Mortgage News.)

Five classes of Structured Asset Securities Corp. mortgage pass-through certificates have been downgraded by Fitch Ratings.The downgrades were as follows: SASCO 2001-8A pools 1-3, class B4-I, from BB-minus to B; SASCO 2002-22H group 1, class B4-I, from BB to B, and class B5-I, from CCC/DR2 to C/DR6; and SASCO 2002-22H group 2, class B4-II, from BB to B, and class B5-II, from CCC/DR2 to C/DR6. In addition, the ratings on 15 other classes in the transactions were affirmed. Fitch attributed the downgrades to cumulative pool losses and high delinquency levels.

Fannie Mae has announced that its recent tender offers for up to $21.04 billion of callable debt securities resulted in a repurchase of $4.16 billion of the securities.The securities were originally issued with European-style one-time call options that have since expired. The government-sponsored enterprise said the offers were part of its effort to maintain a liquid and transparent market for its debt products. Fannie Mae can be found online at http://www.fanniemae.com.

Metropolitan Life Insurance Co., New York, has been approved for membership in the Federal Home Loan Bank of New York, the first life insurance company to become a member, according to the FHLBank.Tony Williamson, senior vice president and treasurer of MetLife, said the membership "is an important element in our strategic plan to secure multiple sources of reliable funding." The FHLBank-NY declared a 6.25% dividend for the third quarter. MetLife can be found on the Web at http://www.metlife.com, and the FHLBank can be found at http://www.fhlbny.com.

NexCen Brands Inc., New York, has announced that it plans to sell its mortgage-backed securities portfolio and exit the MBS business.One security was sold and settled on Oct. 31, and the remainder will be sold pursuant to forward-sale arrangements that are slated to settle on Nov. 21, according to the company. "Total proceeds from these MBS sales, exclusive of accrued interest and prepayments already received in October, and including any prepayments to be received in November 2006, will be approximately $78 million," NexCen said.