Servicing

Six classes of Morgan Stanley Dean Witter Mortgage Capital 2000-F1 have been downgraded by Fitch Ratings.The downgrades were as follows: class B, from A-plus to BBB; class C, from BBB-plus to BB; class D, from BBB to B; class E, from BB-minus to C; class F, from B-plus to C; and class G, from B-minus to C. The downgrades were attributed to reductions in the credit enhancement that Fitch expects to be available to support each class. "As many loans in default have remained unresolved, recovery expectations have decreased while interest liabilities continually detract from collections," the rating agency said. "These lowered expectations in conjunction with incurred losses on existing defaults have reduced subordination and credit enhancement available to outstanding bonds." Fitch can be found online at http://www.fitchratings.com.

Five classes from three Delta Funding Corp. home equity issues have been downgraded by Fitch Ratings and four classes from two other issues have been placed on Rating Watch Negative.The downgrades were as follows: Delta 1999-2, class M2, from A to BBB-plus, and class B, from CC to C; Delta 1999-3, class M1, from AA to A-plus, and class M2, from BBB to BBB-minus; and Delta 2000-3, class M-2, from A-minus to BBB. Classes M2 and B of Renaissance HELT 2002-1 and classes M2 and B of Renaissance HELT 2002-3 were placed on Rating Watch Negative. In addition, Fitch upgraded seven classes and affirmed the ratings on 68 classes from 20 Delta Funding transactions. The negative rating actions stemmed from a deterioration of credit enhancement relative to monthly losses, which have exceeded excess spread for at least nine of the past 12 months, the rating agency said. Fitch can be found online at http://www.fitchratings.com.

Prepayment rates on 30-year fixed-rate agency mortgages fell 23% in January, chiefly as a result of a seasonal slowdown in housing turnover and refinancing activity over the holiday season, according to Bear Stearns & Co.Citing the constant prepayment rate of 5.7 CPR for mortgages in Fannie Mae 4.5% mortgage-backed securities, Bear Stearns analysts Dale Westhoff and V.S. Srinivasan pointed to the extension risk "looming" over the fixed-rate mortgage market. "Even if the housing market remains relatively strong, speeds on deep discount mortgages are likely to converge to their historical norms as cash-out refinancing becomes uneconomical, forcing borrowers to look at 2nd lien mortgages and home equity lines of credit as alternative ways to tap the equity appreciation in their property," the analysts said. For 15-year Fannie Mae and Freddie Mac collateral, speeds decreased by 2.1 CPR overall, compared with a 3.1 CPR overall decline for 30-year mortgages, the Bear Stearns analysts reported. They predicted rising speeds in the February and March reporting periods, citing lower rates so far in February and the four additional business days in March. Bear Stearns can be found online at http://www.bearstearns.com.

Freddie Mac and Fannie Mae are talking about getting involved in the subprime market to increase their credit guarantee business and better serve their customers.Freddie Mac executive vice president Patricia Cook told investors at a Credit Suisse conference that there is nothing in "our charter" that says Freddie cannot purchase and securitize subprime loans. The mortgage giant currently buys triple-A-rated subprime securitizations, she said, and Freddie Mac could securitize subprime mortgages without "necessarily" increasing the company's credit risk. "The key is to be able to buy the mortgages and decide how much of that credit risk we want to retain and how much we want to sell," Ms. Cook said. A company spokeswoman said Freddie Mac has "no immediate plans" to roll out a subprime program. Fannie Mae's chief business officer, Rob Levin, also told the Credit Suisse conference that his company wants to provide secondary-market execution for a wider array of mortgage products that its customers originate. "We are also focused on ways to participate in the subprime market," Mr. Levin said.

HomeBanc Corp., Atlanta, has announced the pricing of a public offering of 2.0 million shares of 10% series A cumulative redeemable preferred stock at $25 per share.The stock has been approved for listing on the New York Stock Exchange under the symbol "HMB PrA." J.P. Morgan Securities was the sole bookrunner and lead manager of the offering. HomeBanc can be found on the Web at http://www.homebanc.com.

In the fourth quarter, 80% of the homeowners who refinanced their homes got a mortgage at least 5% larger than the original loan, up from 73% in the previous quarter, according to Freddie Mac.The percentage was much higher than the 56% level recorded a year earlier, the government-sponsored enterprise said in its quarterly refinance review. "We estimate that home equity extraction from the refinancing of prime first mortgage liens will result in an extraction of $243 billion in 2005," said Frank Nothaft, Freddie Mac's chief economist. "However, equity extraction in 2006 will likely fall sharply, by a little more than half to about $117 billion, as we expect lower refinance activity and slower house price appreciation."

Clayton Holdings Inc., a provider of information and analytics to the banking and fixed-income securities markets, has announced the acquisition of Mortgage Resource Network, a Dallas-based provider of outsourced mortgage origination support and pre-close due diligence services.The terms of the deal were not disclosed. Clayton noted that the acquisition expands its presence in the mortgage services sector. MRN provides turnkey front-end fulfillment, imaging, contract underwriting, closing, funding, and investor delivery services required by mortgage originators and warehouse lenders. In addition, MRN provides post-transaction and servicing transfer support services, including trailing document management and MERS research and registration. Clayton, based in Shelton, Conn., can be found online at http://www.clayton.com.

Republic Title Co., Chicago, has announced that 1031 exchange services will now be offered to its attorney agents and other customers through an alliance with Nationwide Exchange Services.Republic said NES is a "qualified intermediary" that provides a full range of 1031 tax-deferred exchange services. Section 1031 of the IRS Code allows owners to exchange property held for investment or business purposes for "like-kind" property, with no federal tax liability, if they meet certain deadlines. NES can be found online at http://www.nationwide1031.com.

The Mortgage Bankers Association's ranking of top commercial and multifamily mortgage loan servicers places Wachovia at the top of the list in total primary and master servicing volume, at $233.2 billion.Following Wachovia are GMAC Commercial, with $231.5 billion, Midland Loan Services, with $159 billion, and Wells Fargo, with $95.5 billion. (They are also the top four primary and master servicers for commercial mortgage-backed securities.) Rankings of servicing for life company loans place Prudential Asset Resources at the head of the list, the trade group reported, followed by GMAC, NorthMarq Capital, and Q10 Capital. Deutsche Bank is ranked No. 1 for servicing of Fannie Mae and Freddie Mac loans, followed by Washington Mutual, GMAC, and ARCS Commercial Mortgage. Wachovia is No. 1 for servicing of commercial bank and savings institution loans. The MBA can be found online at http://www.mortgagebankers.org.

Irwin Financial Corp., Columbus, Ind. -- which recently announced that its conventional mortgage banking unit, Irwin Mortgage, is for sale -- has reported net income of $6.5 million ($0.23 per share) for the fourth quarter, compared with $13.9 million ($0.47 per share) a year earlier, a decline it attributed to a loss in its mortgage banking operations.The loss in the mortgage banking segment totaled $2.6 million in the fourth quarter, compared with net income of $1.0 million in the fourth quarter of 2004, the company reported. For the full year, Irwin reported net income of $19.0 million ($0.66 per share), compared with $68.4 million ($2.28 per share) in 2004. "Consolidated net revenues decreased on a sequential quarter basis largely due to reduced secondary-market gains on mortgage loan sales, [mortgage servicing rights] impairment, and the absence of mortgage servicing sales in the current period," Irwin said. The company can be found online at http://www.irwinfinancial.com.