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Class B of Remodelers Home Improvement Loan asset-backed certificate series 1995-2 has been downgraded from BBB to BB by Fitch Ratings.The rating agency attributed the downgrade to elevated credit risk caused by a low collateral balance of $460,000 and the smaller number of loans (60) remaining in the trust, which increases the volatility of the transaction. The loans were originated or acquired by Remodelers Home Improvement, which was later acquired by FirstPlus Financial, a consumer finance company that has since been liquidated, Fitch said.

Class B-1 of Fund America Investors Corp. mortgage pass-through certificates, series 1994-A, has been downgraded from A-minus to BBB-minus by Fitch Ratings.Fitch also affirmed the ratings on two other classes in the subprime transaction. The downgrade was attributed to increased credit risk caused by a low collateral balance and the small number of loans (five) remaining in the trust, which increases the volatility of the deal.

Prepayment rates on 30-year fixed-rate mortgages in Fannie Mae and Freddie Mac mortgage-backed securities increased by 21% in March, according to the Bear Stearns Prepayment Commentary.Overall speeds on 30-year Fannie Mae collateral came in at a constant prepayment rate of 13.6 CPR for the month, up 2.4 CPR from February, Bear Stearns analyst Dale Westhoff reported. Speeds for comparable Freddie Mac mortgages averaged 11.8 CPR, up 2.1 CPR. "With 30-year mortgage rates relatively unchanged, the increase in prepayments can be attributed to a four-day increase in the business calendar and a seasonal uptick in housing turnover activity," Mr. Westhoff said. The analyst said the one surprise in the prepayment report was "the sharp increase in speeds on the 2005 cohort," which he said is probably a response to the "significant levels of appreciation" that many homeowners have seen over the past year. Overall speeds for 15-year Fannie and Freddie MBS collateral rose by 20%, comparable to the rise in 30-year prepayments, but the speeds of agency hybrids rose sharply and continue to prepay "significantly faster" than their fixed-rate counterparts, the analyst said. Bear Stearns can be found online at http://www.bearstearns.com.

Employment in the mortgage industry hit a new high in February as lenders added 6,500 full-time employees after trimming their payrolls during the previous three months.The U.S. Bureau of Labor Statistics reported that employment in the mortgage industry jumped from 498,399 in January to 504,000 in February. Freddie Mac deputy chief economist Amy Crews Cutts said originations declined in the first quarter but that refinancings held up better than expected as homeowners got out of their adjustable-rate home equity and home improvement loans. Refi activity also got a boost from resets on hybrid adjustable-rate mortgages. Ms. Cutts noted that one large company fired a lot of workers, but had to hire them back again. "They thought the refi boom was totally dead, but it turned out to be just slower," she said. Anticipation that originations will increase in the spring selling season may also be a factor in hiring decisions. Freddie Mac estimates that originations will jump from $540 billion in the first quarter to $655 billion in the second quarter. In addition, lenders are willing to take on the more complex and labor-intensive loans to borrowers who are going through divorces or face other issues. "In the past, these borrowers would not have gotten a return phone call," the Freddie economist said.

Class B of MESA Trust asset-backed certificates, series 2001-2, has been downgraded from B-plus to CCC by Fitch Ratings.Fitch also affirmed the rating on class M of the transaction. The downgrade was attributed to a deterioration of the relationship between credit enhancement and loss expectations. All the mortgage loans were acquired or originated by Option One Mortgage Corp. and later purchased by Bear, Stearns & Co., Fitch said. "Substantially all of the mortgage loans have certain appraisal, document, fraud or misrepresentation, or other deficiencies or exceptions that exceed the scope of Option One Mortgage Corp.'s usual underwriting guidelines," the rating agency said. Fitch can be found online at http://www.fitchratings.com.

Delta Financial Corp., Woodbury, N.Y., has reported the pricing of a private placement of 2.5 million shares of its common stock at $8.25 per share.Delta, an originator and securitizer of nonconforming mortgage loans, said it expects net proceeds to total approximately $19.3 million. The company can be found on the Web at http://www.deltafinancial.com.

Franklin Credit Management Corp., New York, has announced that it will restate its earnings for 2003, 2004, and three quarters of 2005 to expense certain fees and costs related to the acquisition of residential mortgage loans.Franklin said it had been deferring and amortizing the fees and costs over the estimated life of the acquired assets based on an accounting interpretation reached in consultation with Deloitte & Touche LLP. But the company said it has now changed its interpretation based on further consultations with the accounting firm regarding Statement of Financial Accounting Standards No. 91 on nonrefundable fees and costs. Franklin said its restatements (for the full years 2003 and 2004, all quarterly periods in 2004, and three quarterly periods in 2005) will also include certain other adjustments. The aggregate effect of the adjustments is estimated to result in reductions to after-tax income of $771,000 ($0.11 per share) in 2004 and $439,000 ($0.07 per share) in 2003, the company said. In other news, Franklin said its wholly owned mortgage origination subsidiary, Tribeca Lending Corp., entered into a new $100 million master credit and security agreement with BOS (USA) Inc., an affiliate of the Bank of Scotland. Franklin can be found online at http://www.franklincredit.com.

The boards of The Bond Market Association and the Securities Industry Association have endorsed the concept of merging the two associations into a new entity that "will more effectively represent the member companies and industry while enhancing the public's trust and confidence in the markets."The two associations' boards said in a joint statement that "once the organizational details are decided" they plan to vote on the merger by June 30 and then bring the matter to their full memberships for a vote. "The combined organization is intended to meet the needs of the member financial services firms in their roles as broker dealers, investment advisers, and asset managers, as well as representing the interests of private client and institutional investors," the groups said.

Two classes of Merit Securities Corp. residential mortgage-backed securities series 12-1 have been downgraded by Fitch Ratings.Class 3A-1 was downgraded from AAA to AA, and class B-2 was downgraded from A to BBB. The rating on one other class in the transaction was affirmed. Fitch said the downgrades reflect a continued deterioration in the relationship between credit enhancement and expected loss levels. The collateral consists of conventional first-lien mortgage loans and manufactured housing installment sales contracts. Fitch can be found online at http://www.fitchratings.com.

The Federal Agricultural Mortgage Corp., Washington, D.C., has announced the issuance of a long-term standby purchase commitment that boosted its portfolio of loans, guarantees, and commitments to a record level of $6 billion.The standby purchase commitment was made to a Farm Credit System institution on a $479 million pool of agricultural real estate mortgage loans, Farmer Mac said. "The transaction is a product of Farmer Mac's ongoing efforts to diversify its marketing focus to include large program transactions that emphasize high asset quality, with greater protection against adverse credit performance and commensurately lower compensation for the assumption of credit risk and administrative costs," said Henry D. Edelman, chief executive officer of the government-sponsored enterprise. Farmer Mac can be found online at http://www.farmermac.com.