Servicing

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.

Classes M-4 and M-5 of Ace Securities Corp.'s asset backed pass-through certificates, series 2004-HS1, have been placed on Rating Watch Negative by Fitch Ratings.Fitch also affirmed the ratings on four other classes in the transaction. The negative rating actions were attributed to higher-than-expected monthly losses that have exceeded the available excess spread in recent months, causing a deterioration in the overcollateralization amount. "In addition, cumulative loss and 60-or-more-days delinquency percentages (0.80% and 27.51%, respectively) for this transaction are significantly higher than the industry average (approximately 0.56% and 13.19%, respectively)," Fitch said. The pool consists of first-lien residential mortgage loans.

Class B-1 of Credit Suisse First Boston Mortgage Securities Corp. series 2002-HE11 has been downgraded from Baa2 to B1 by Moody's Investors Service.The downgrade was based on the fact that the bond's credit enhancement levels, including excess spread, are low compared with the projected losses, the rating agency said. The pool is backed by subprime first-lien loans.

Freddie Mac's board of directors has announced a dividend of $0.47 per share on the corporation's voting common stock for the third quarter, unchanged from that of recent quarters.The board also declared the following preferred stock dividends per share: $0.60 on its 1996 and 1998 variable-rate stock; $0.7675 on its 6.14% stock; $0.72625 on its 1997, 2001, and 2002 5.81% stock; $0.625 on its 5% stock; $0.6375 on its 1998 and 1999 5.1% stock; $0.6625 on its 5.3% stock; $0.72375 on its 5.79% stock; $0.4475 on its 1999 variable-rate stock; $0.49125 on its January 2001 variable-rate stock; $0.64528 on its March 2001 variable-rate stock; $0.48125 on its May 2001 variable-rate stock; $0.75 on its 6% stock; $0.7125 on its 5.7% stock; $0.625 on its 2006 variable-rate stock; and $0.65092 on its 6.42% stock. The dividends will be payable on Sept. 29 to stockholders of record as of Sept. 18.