Servicing

Fitch Ratings has downgraded the long-term credit rating and distressed recovery rating of one class in COMM's commercial mortgage pass-through certificates, series 2000-C1 while upgrading or affirming the ratings of other classes in the deal.The rating of class N slipped to C/DR6 from CC/DR3 due to "increased loss expectations on the specially serviced assets," Fitch said, adding that, "projected losses on the specially serviced assets are expected to fully deplete [the unrated] class O and significantly impair class N." Fitch raised the ratings of class B through H and affirmed the ratings of class A-1, class A-2, interest-only class X, class J, class K, class L and class M. "The rating upgrades reflect increased credit enhancement due to scheduled amortization and additional defeasance," Fitch said. Fitch Ratings can be found on the Web at http://www.fitchratings.com.

Speaking at a Federal Reserve Bank of Chicago annual meeting, Fed Chairman Ben Bernanke said it "seems pretty clear" that housing markets are cooling.But, as reported by The Wall Street Journal, Mr. Bernanke responded to a question saying that the housing slowdown is "orderly and moderate" at the time being. In his prepared speech, Mr. Bernanke also addressed new mortgage products, saying that innovation in housing finance has led to "more sophisticated and flexible instruments, more liquid markets, and better risk-sharing." While the net benefits have been positive, Mr. Bernanke said "rapid financial innovation carries some risks," and he urged regulators to be ready to mitigate those risks.

Moody's Investors Service has downgraded the ratings of two classes of Commercial Mortgage Asset Trust, Series 1999-C2 and upgraded the ratings of four classes in that deal.Moody's downgraded the rating of classes M and N to Caa1 from B3 and to Ca from Caa2, respectively, and upgraded the ratings of classes D (to Aaa from Aa1), E (to Aa3 from A1), F (to A2 from A3) and G (to Baa2 from Baa3). Other ratings in the deal were affirmed.

Moody's Investors Service has downgraded one certificate from one transaction issued by Salomon Brothers Mortgage Securities VII Inc. Mortgage Pass-Through Certificates in 2001.Class M-5's rating in the series 2001-2 transaction slid to Caa1 from B2 in the downgrade. "The M-5 subordinate certificate has been downgraded because existing credit enhancement levels may be low given the current projected losses on the underlying pool. The collateral has taken losses causing gradual erosion of the overcollateralization and the unrated M-6 class. As of the April payment date there was less than $170,000 of protection in the form of overcollateralization and an unrated tranche below the M-5 class," according to Moody's. The certificates are secured by seasoned reperforming loans. Moody's can be found on the Web at http://www.moodys.com.

Freddie Mac has priced Reference REMIC R007’s $2.0 billion, 5.875% Guaranteed Maturity Class AC (CUSIP 31396NPF7) at 99.92968750 to yield 5.8992%, or 90 basis points over the interpolated Treasury curve.The class has a final maturity date of May 15, 2016. Goldman Sachs Group, Merrill Lynch and RBS Greenwich Capital served as the lead underwriters for Reference REMIC R007. Co-managers of the transaction were Barclays Capital Inc., Bear Stearns & Co. Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and J.P. Morgan Chase. The transaction also involved a selling group. Freddie Mac can be found on the Web at http://www.freddiemac.com.

Moody's Investors Service has placed on review for possible downgrade three certificates from two transactions issued by DLJ Mortgage Acceptance Corp.Classes B-2 and B-3 from series 1996-QJ and class B-1 from series 1996-QB "are being placed on review for downgrade based on the weak performance of the underlying loans with historical and expected cumulative losses exceeding original expectations," according to Moody’s. Moody’s can be found online at http://www.moodys.com.

PHH Corp. has said it expects to miss its deadline to file first quarter 2006 financials and its extended deadline to file its annual report for 2005 because an audit of certain financial statements "was and is ongoing."The company said in a Securities and Exchange Commission filing that it could not provide an estimate of its expected net loss or income for 2006 compared to its net loss for the first quarter of 2005, "which was primarily the result of charges associated with the company's spin-off from Cendant [Corp.] on [Feb.] 1, 2005." PHH added that as it continues the process of evaluating its financial statements "accounting issues may be identified which, individually or in the aggregate, may result in material impairments to assets and/or material adjustments to or restatements of our financial statements for prior periods or prior fiscal years." But the company said its continues to believe that it has "adequate liquidity" to fund its "operating cash needs." PHH added that it has obtained number of waivers and continues "to seek additional waivers to provide audited financial statements of our subsidiaries, and reports relying upon such financial statements to certain regulators, investors in mortgage loans, and other third parties in order to satisfy federal and state insurance and mortgage regulations and certain contractual requirements."

Middle-class debt has exceeded income for the first time in the history of a Federal Reserve survey that measures it, according to a new report.Debt has expanded to 108.4% of income according to a new report on the topic by the Center for American Progress that quantifies the debt of a middle-income family during the period between 2001 and 2004. Personal bankruptcies in middle-class households also increased in this timeframe, due to slow income growth and the rising cost of the some of largest family expenses such as housing, according to the report, "Drowning in Debt: America’s Middle Class Falls Deeper in Debt as Income Growth Slows and Costs Climb."

Based on the overwhelming response to its first full-blown conference on loan fraud, the Mortgage Bankers Association is considering adding a second event later this year.Opening the National Fraud Issues Conference Monday in Chicago, Chairman-elect John Robbins said the MBA "expanded the room twice" and still had more than 150 people on the list waiting to get in. Georgia Attorney General Thurbert Baker, who is in line to become chairman of the National Association of Attorneys General, said he is "urging" his counterparts in other states to follow Georgia's lead in enacting laws making mortgage fraud a felony punishable by up to 20 years in prison. "Most important," Mr. Baker told the meeting, "we don't have to wait until the money's taken. We can act as soon as the misrepresentation is made, and that allows us to get at the problem before (lenders) are bilked out of millions and entire neighborhoods are destroyed." The Georgia AG said more than 100 cases have either been or opened or are waiting to be opened," and "we are training prosecutors all over the state." Assistant Georgia AG David McGlaughlin said he takes great delight in being able to lock up scam artists. "Drug dealers live in fear that today is the day they are going to have their faces pushed into the concrete and handcuffed. Now mortgage fraudsters feel the same way," Mr. McGlaughlin said. "That’s the beautiful thing for me as a prosecutor."

Florida has replaced Georgia as the hottest spot in the country for mortgage fraud, according to the latest figures from the Mortgage Asset Research Institute.Utah moved up to second place, while the Peach State slipped to third, MARI said in a statistical report released at the Mortgage Bankers Association's First Annual National Fraud Issues Conference. Officials at the meeting Monday attributed the decline in the MARI Fraud Index for Georgia to the state's year-old law which codifies mortgage fraud as a crime. To date, Georgia is the only state to specifically make loan fraud a criminal offense. But at least five others -- New Jersey, Utah, Colorado, Oklahoma and California -- are considering similar legislation. "It's getting people's attention," Georgia Attorney General Thurbert Baker said at the conference. "It shows the impact that state laws can have," agreed California attorney Arthur Prieston, a specialist in fraud. According to the MARI index, the fraud rate in Georgia went from three times the national average to less than twice the national average, "a far cry from 2003, when it far outstripped every other state." On a national level, however, MARI found that problems in loan application misrepresentation remain high. Colorado and Illinois are seeing more instances of fraud, while South Carolina has shown a marked improvement, according to the report.