Servicing

The educational wing of the Mortgage Bankers Association has awarded 13 mortgage executives the designation of Certified Mortgage Servicer.The designations were given out during a ceremony at Fidelity National Information Services headquarters in Jacksonville, Fla., on Sept. 15. Graduates received the CMS designation in one of three areas of concentration: loan administration, financial controls/investor administration, and default administration. To be eligible for the CMS designation, which was launched early last year, candidates must amass a total of 63 points through a combination of industry experience and CampusMBA course work. After accumulating the points, candidates must also pass a three-hour online examination.

Fitch Ratings has announced the release of new basis-risk stress criteria for securitizations involving the U.S. dollar London interbank offered rate.The new criteria are expected to have the most immediate effect on consumer asset-backed securities and residential mortgage-backed securities, according to Claire Mezzanotte, an ABS managing director at Fitch. "The majority of U.S. consumer ABS transactions, including credit card receivables, student and home equity loans, are exposed to basis risk due to mismatches between the asset and liability coupon rates," Ms. Mezzanotte said. The criteria were developed in conjunction with Fitch's new interest rate stress criteria, which were published in May. Fitch said it will be updating the interest rate and basis-risk stresses each month. The report, "Basis Risk in Structured Finance Transactions: T-Bill, CP, and Prime versus USD LIBOR," can be found on Fitch's website, http://www.fitchratings.com.

Zacks Equity Research, Chicago, has declared The Mills Corp. its "Bear of the Day" -- a stock expected to underperform the markets over the next three to six months -- for Sept. 18.Mills is an Arlington, Va., retail real estate investment trust that recently received bids from potential buyers and investors. "The company is dealing with myriad problems, including a restatement of its financial results from 2000 through the first three quarters of 2005, failed developments, and executive departures," Zacks said. "Additionally, the company is under investigation by the [Securities and Exchange Commission] for accounting irregularities." Zacks said the company is struggling and noted that the common dividend has been cut "significantly." It predicted much lower-than-expected earnings when Mills releases its 2005 and year-to-date 2006 results. Zacks can be found online at http://www.zacks.com.

Wachovia Securities, with a $187.0 billion portfolio as of June 30, is the largest primary and master servicer of commercial mortgage-backed securities, according to the Mortgage Bankers Association.Capmark Finance Inc., with $140.1 billion, is the second-largest CMBS servicer on the MBA's list. Rounding out the top five are Midland Loan Services, with $115.0 billion; Wells Fargo, with $78.4 billion; and KeyBank Real Estate Capital, with $64.0 billion. LNR Partners Inc. is named as the special servicer on $207.5 billion of CMBS deals, ranking it No. 1 in that category, the MBA reported. The association can be found online at http://www.mortgagebankers.org.

New residential foreclosures fell by 6.7% in August, according to Foreclosure.com, an online foreclosure listing service based in Boca Raton, Fla.There were 26,255 new foreclosed residential properties listed in August, the company reported. Meanwhile, the nationwide active inventory of U.S. residential foreclosures totaled 85,467 properties, down 1.2% from the level recorded in July, according to Foreclosure.com. "We continue to see fluctuations when analyzing data month to month," said Brad Geisen, president and chief executive officer of Foreclosure.com. "But as we near the end of the third quarter, most housing and economic indicators point to a sustained period of increased new foreclosure activity across the country." The company can be found online at http://www.foreclosure.com.

Hurricane Katrina-related delinquencies have dropped to just over a third of their peak but are still 3.5 times higher than pre-storm levels, according to Fitch Ratings.The rating agency said its delinquency index for loans collateralizing U.S. commercial mortgage-backed securities fell 4 basis points, to 0.55%, in August. The majority of outstanding Katrina-related delinquencies are located in Louisiana, mostly in and around New Orleans, as the city's recovery continues to lag well behind that of other storm-affected regions, said Patty Bach, a Fitch senior director. "With New Orleans' population estimated at 215,000, less than 50% of its pre-storm level of 465,000, large sections of the city remain mostly uninhabited as flood-damaged property owners have been waiting for resolution of questions surrounding level protection and financial assistance for rebuilding," Ms. Bach said. Fitch said its seasoned CMBS delinquency index, which omits transactions with less than one year of seasoning, dropped 9 bps, to 0.69%. Fitch can be found online at http://www.fitchratings.com.

RealtyTrac, an online foreclosure marketplace based in Irvine, Calif., has reported that the number of new properties entering some stage of foreclosure rose 24% in August and was 53% higher than the level recorded a year earlier.The company's U.S. Foreclosure Market Report indicates that 115,292 new foreclosure properties were added to the rolls in August. "After spiking early in the year, U.S. foreclosure activity has been relatively flat over the last few months," said James J. Saccacio, RealtyTrac's chief executive officer. "But foreclosures ramped up significantly in August, pushing the national foreclosure rate close to its highest level of the year so far." The company said Colorado recorded the highest foreclosure rate of any state for the sixth consecutive month in August, spiking nearly 60% from that of July. RealtyTrac can be found online at http://www.realtytrac.com.

While the overall mortgage delinquency rate, at 4.39%, declined by two basis points in the second quarter, underlying data suggest a slight decline in overall credit quality, according to the Mortgage Bankers Association.In fact, the improvement from the first quarter was largely driven by a decrease in the delinquency rate for loans 90-or more days past due, particularly in the states of Louisiana and Mississippi, which were heavily affected by Hurricane Katrina last year. Meanwhile, the percentage of loans in foreclosure increased by 1 bp to 0.99% as of June 30. The percentage of loans entering the foreclosure process also rose slightly from that of the first quarter. Doug Duncan, the MBA's chief economist, said the data reflect a cooling housing market, noting that some states experienced home price declines in the second quarter. "We are seeing increases in delinquency rates for subprime loans, particularly for subprime ARMS," he said.

PNC Financial Services, Pittsburgh, is rebalancing its portfolio and says it expects to sell $6 billion in securities, booking a $200 million loss on the deal.PNC disclosed the information in a recent 8-K filing with the Securities and Exchange Commission. Some news reports said the securities in question are collateralized by mortgages, but the word "mortgage" is not used in the 8-K filing. PNC could not be reached for comment by MortgageWire's deadline. In the filing, the bank said the securities "will likely underperform on a relative-value basis."

Despite the slowdown in the housing market, 2006 is shaping up to be a very good year for the mortgage market and Freddie Mac, according to the company's chairman and chief executive officer, Richard Syron."I am concerned about the housing market," Mr. Syron told investors at a Lehman Brothers conference. He said the market is entering a "tumultuous" period with the dramatic falloff in price appreciation in the second quarter and buyers facing affordability problems. However, Freddie has not noticed any significant impact on its business, according to Mr. Syron. "I still expect 2006 will be the third-best year for the mortgage market," he said. The CEO also noted that Freddie continues to increase its investments in highly rated variable-rate mortgage securities, which made up 40% of its retained portfolio at the end of June. "These purchases are essential to meeting our housing goals, and they also provide good financial returns," Mr. Syron said. Freddie Mac can be found online at http://www.freddiemac.com.