Servicing

Two tranches of RFC's RFSC series 2003-RP1 Trust have been downgraded by Moody's Investors Service.Class M-2 was downgraded from A2 to Baa1, and class M-3 was downgraded from Baa2 to B3. The downgrades were attributed to "high and rapidly rising levels of cumulative loss," a large proportion of severely delinquent loans, and "significant deterioration" of overcollateralization in recent months. The underlying collateral consists of subprime and re-performing residential mortgage loans. Moody's can be found online at http://www.moodys.com.

Barclays Bank PLC, London, has announced an agreement to acquire the U.S. subprime mortgage servicing business of HomEq Servicing Corp. from Wachovia Corp., Charlotte, N.C., for a total consideration of $469 million.The consideration represents net book value for the mortgage servicing rights and fixed assets "and $209 million in respect of advances, the collection of which is fully indemnified by Wachovia," Barclays said. The consideration is subject to an adjustment mechanism based on the value of the MSRs and advances at the closing of the transaction. The company said the acquisition will expand the capabilities of the growing U.S. mortgage securitization franchise of Barclays Capital, the bank's investment banking division. Barclays Capital can be found on the Web at http://www.barclayscapital.com.

Moody's Investors Service has downgraded one subordinated tranche from a mortgage-backed securitization issued by Credit Suisse First Boston Mortgage Securities Corp. in 2001.The downgrade of class M-2 of series 2001-HE25 from A2 to Baa1 "is based on the fact that the bonds' current credit enhancement levels, including excess spread, are low compared to the current projected loss numbers for the current rating level," Moody's said. The rating agency can be found on the Web at http://www.moodys.com.

Manoj Singh has been named senior vice president of market risk oversight at Freddie Mac.Mr. Singh was most recently a senior managing director at Bear, Stearns & Co. He was previously a senior vice president at Lehman Brothers, where he was responsible for the risk management of all mortgage products, including residential mortgage trading and securitization, wholesale trading and securitization, asset-backed securities, and commercial mortgage-backed securities, Freddie Mac said. The government-sponsored enterprise can be found online at http://www.freddiemac.com.

Mortgage products with amortization terms of more than 30 years present "markedly" different risk profiles for different product types, according to a recent study by Fitch Ratings."The main risks associated with a longer amortization schedule are the higher payment increases, increased adverse selection risk, and slower equity build-up," said Suzanne Mistretta, senior director at Fitch. The report looks at the performance of 40-, 45-, and 50-year option adjustable-rate, hybrid, and fixed rate mortgages. Fitch can be found on the Web at http://www.fitchratings.com.

The percentage of home loans that are past due or in foreclosure showed widespread improvement in the first quarter, according to the Mortgage Bankers Association.Overall, 4.41% of home loans were at least 30-days late at the end of the first quarter, down 29 basis points from the fourth quarter on a seasonally adjusted basis, according to the MBA's National Delinquency Survey. The percentage of loans in the foreclosure process declined one basis point to 0.98% from the previous quarter. MBA chief economist Doug Duncan said a strong economy and job growth in the first quarter offset factors such as the aging of the loan portfolio, rising short term interest rates, and high energy prices that have put upward pressure on delinquency rates.

Two classes of notes issued by Phoenix CDO II Ltd., a collateralized debt obligation that includes mortgage-backed securities, have been downgraded by Fitch Ratings.Classes C-1 and C-2 have been downgraded from CCC to C. Fitch attributed the downgrades to a recent default that it expects to cause the undiscounted principal received by the notes to fall "substantially" below their current balance. The transaction, a CDO managed by Phoenix Investment Partners, is composed of asset-backed securities, residential MBS, and commercial MBS. The rating agency can be found online at http://www.fitchratings.com.

Interactive Mortgage Advisors, Denver, is brokering the sale of servicing rights on a $50 million portfolio of home loans.The portfolio consists of Freddie Mac, Fannie Mae, and private-label loans from 26 states, with the largest concentration of loans in Georgia. The average loan size is $139,283. The weighted average interest rate is 5.794% on the loans, and the weighted average servicing fee is 0.296%. Bids are due on Thursday, June 22.

A stockholder proposal critical of Countrywide's executive compensation policies received a surprisingly strong 43% support at Countrywide Financial Corp.'s annual meeting June 14.The American Federation of State, County and Municipal Employees Pension Plan said chairman and chief executive Angelo Mozilo's 2005 total compensation, which the union pegged at $160 million (including stock options), accounted for 6% of Countrywide's net income. "It is time that shareholders are given a say on whether this type of compensation is in anyone's best interests but Mr. Mozilo's," said AFSCME president Gerald McEntee. Countrywide can be found on the Web at http://www.countrywide.com.

Fidelity National Information Services Inc., Jacksonville, Fla., has announced the launch of eRelease Payload, an automated utility designed exclusively for the company's mortgage servicing package clients.The eRelease product line is an end-to-end lien release processing system, and the launch of eRelease Payload provides the added functionality of automated order placement into eRelease when the loan payoff transaction occurs, the company said. Using the utility to place orders eliminates the inconvenience, time delays, and risk of using multiple queries to aggregate order placement data. "Prior to Payload, our eRelease clients created their own upload files to place orders using multiple reports or manual entry of MSP data," said Clay Cornett, president of Fidelity National Default Solutions. "The process was cumbersome and increased our clients' exposure to potential penalties and litigation due to misplaced orders and incomplete files." FNIS can be found online at http://www.fidelityinfoservices.com.