Servicing

Moody's Investors Service has downgraded one class and placed five classes on review for possible downgrade from two Residential Asset Mortgage Products Inc. Trust asset-backed securitization deals issued in 2002.Moody's also downgraded one class from a Residential Asset Securities Corp. subprime deal issued in 2001. The downgrades were as follows: RAMP series 2002-RS3, class M-I-2, from Aa2 to A2, and RASC series 2001-KS2, class M-II-1, from Aa2 to A1. The RAMP classes placed on review were as follows: series 2002-RS1, classes M-I-1, M-I-2, and M-II-2; and series 2002-RS3, classes M-II-1 and M-II-3. In addition, Moody's confirmed the rating on one class from one of the RAMP deals and one class from the RASC deal. The negative rating actions were attributed to the weaker-than-expected performance of the mortgage pools and the resulting erosion of credit support. Specifically, the overcollateralization in the 2002-RS1 adjustable-rate pool has been fully exhausted, and the class M-I-3 and M-II-3 certificates have both realized losses, the rating agency said. In addition, the overcollateralization amounts in the 2002-RS3 adjustable-rate pool and the 2001-KS2 fixed-rate pool are "significantly below their targets, and pipeline losses could put pressure on the most subordinate tranches from these pools," Moody's said.

PHH Corp., Mt. Laurel, N.J., has reported the receipt of an extension from the New York Stock Exchange regarding the filing of its annual 10-K report with the Securities and Exchange Commission, allowing the continued listing of PHH's common stock on the NYSE through Jan. 2.The listing will be subject to review by the NYSE during that period, PHH said. The company said it expects to file the 2005 annual report by Oct. 31, but that it may request an additional extension from the NYSE if it does not do so by Jan. 2. If an additional extension were granted, PHH could have until April 2, 2007, to file the report, after which the stock exchange's rules would require it to initiate suspension and delisting procedures, the company said. PHH can be found online at http://www.phh.com.

Two classes from Equity One ABS Inc. mortgage pass-through certificates issued in 2002 have been downgraded by Fitch Ratings.Class B of series 2002-1 was downgraded from BBB to BB-plus, and class B-2 of series 2002-3 was downgraded from BBB to BB. Fitch also affirmed the ratings on 33 classes in eight Equity One subprime transactions. The rating agency attributed the downgrades to a deterioration in the relationship between credit enhancement and expected losses. Overcollateralization has been "off target for as many as eight of the past nine months" because monthly collateral losses have exceeded the available monthly spread, Fitch reported. The rating agency can be found online at http://www.fitchratings.com.

Two classes from CDC Mortgage Capital Trust mortgage pass-through certificates, series 2002-HE3, have been downgraded by Fitch Ratings and two classes from other transactions have been placed on Rating Watch Negative.The downgrades were as follows: class B1, from BB-minus to B-plus; and class B2, from B-plus to C. Class B2 was also assigned a distressed recovery rating of DR6. The securities placed on watch were class B3 of series 2003-HE3 and class B3 of series 2003-HE4. In addition, Fitch affirmed the ratings on 14 classes from the three CDC deals. The rating agency attributed the downgrades to a deterioration in the relationship between credit enhancement and expected losses. The pools consist of fixed- and adjustable-rate subprime mortgages for one- to four-family residential properties.

Foreclosures are still soaring in Massachusetts, according to ForeclosuresMass.com, a provider of foreclosure data based in Framingham, Mass.The company said 1,812 foreclosures were recorded in August, up 72% from the level of a year earlier and 266% from that of 2004. "Foreclosures in Massachusetts continue to escalate at levels we haven't seen since the housing crash of the early 1990s," said Jeremy Shapiro, president and co-founder of ForeclosuresMass.com. "In August alone there were over 90 new foreclosures filed every business day from every corner of the state. These latest findings have prompted us to extend our forecast: we expect foreclosure rates to continue this historic climb well into next year." The company can be found online at http://www.foreclosuresmass.com.

The annualized chargeoff rate of Moody's Home Equity Index Composite rose 31.6% on a year-over-year basis in June, jumping to 1.05% from 0.80% a year earlier, according to Moody's Investors Service.The rise represents the highest rate of increase since 2001, the rating agency reported. Delinquency rates also continued their ascent in June. As a percentage of current pool balances, the 60-day-plus delinquency rate rose to 6.76%, compared with 5.86% in June 2005, while foreclosure and real-estate-owned rates rose to 2.68% and 0.97% from 2.14% and 0.72%, respectively. The findings are detailed in a new report on the Moody's U.S. Home Equity Index Composite, which tracks the aggregate performance of home equity loans backing securities rated by Moody's.

Freddie Mac acquired $42.36 billion in loans in August, a 12% increase from its July volume but a 32% decline from that of a year earlier.August was Freddie's fourth-best purchase month of the year. On a year-to-date basis, Freddie Mac had acquired $333.7 billion in mortgages. During the first eight months of last year, Freddie bought $362.2 billion. The loan purchases of Freddie Mac -- and its chief competitor, Fannie Mae -- tend to track originations in the primary market. When industry production drops, so do loan acquisitions by the government-sponsored enterprises. In August Freddie's retained portfolio totaled $706.9 billion, a slight decline from its level in July but a 4% gain from that of August 2005.

The percentage of home equity loans that were overdue fell 5 basis points to 1.89% at banks in the second quarter, the American Bankers Association has reported.The delinquency rate on home equity lines of credit also improved, falling 3 bps to 0.52%. The improvement came despite a slight increase in overall consumer loan delinquencies. ABA chief economist James Chessen said that, while consumers continue to be pressured by higher short-term interest rates and high gas prices, those pressures may ease in the third quarter. However, he said weakening housing markets will make it more difficult for consumers to use home equity gains as a source of liquidity. "It's a different world now, and consumers will need to be more careful in managing their finances." The ABA can be found on the Web at http://www.aba.com.

Wachovia Securities, Charlotte, N.C., has announced that it is forming a new wholesale lending organization by combining the American Mortgage Network with Wachovia Mortgage's third-party lending business.The new unit, Wachovia Securities Wholesale Mortgage, will be part of Wachovia's Corporate and Investment Banking Group. Charlotte Catalfo and John Robbins will be the co-heads of the new unit. Combined production from both entities totaled $19 billion last year, Wachovia said. "We have aggressive goals for our new wholesale mortgage organization, which we believe has enormous potential for production and product innovation," said Curtis Arledge, head of Wachovia's Fixed Income Division. "Our vertically integrated mortgage model leverages our capabilities in the secondary market and will help drive profitability as we meet continued global demand for mortgage-backed securities." Wachovia Securities can be found online at http://www.wachoviasec.com.

Two classes from a Credit Based Asset Servicing and Securitization LLC mortgage loan securitization have been removed from Rating Watch Negative by Fitch Ratings.The affected securities are classes 1B-1 and 1B-2 of C-BASS series 1999-CB2, group 1, the rating agency said. Fitch said the original Rating Watch placements were made pending the review of misapplied losses to the trust. As of Sept. 25, there was a recovery of more than $300,000 to the trust, the rating agency reported. Fitch can be found on the Web at http://www.fitchratings.com.