Servicing

Interactive Mortgage Advisors, Denver, is brokering a $40 million package of Freddie Mac and Fannie Mae bulk servicing rights.IMA said the weighted average interest rate of the offering is 5.636%, and the weighted average service fee is 0.338%. The average loan size is approximately $137,000, and more than 95% of the loans -- the vast majority on single-family residences -- are concentrated in Arizona. The bid deadline is Feb. 15.

HomeBanc Corp., the Atlanta-based parent company of HomeBanc Mortgage Corp., has priced a public offering of 2.0 million shares of 10% series A cumulative redeemable preferred stock at $25 per share.J.P. Morgan Securities was the sole bookrunner and lead manager of the offering. HomeBanc said it has granted the underwriters an option to buy up to 300,000 additional shares to cover any overallotments. HomeBanc, a real estate investment trust, can be found online at http://www.homebanc.com.

Sky Financial Group, Bowling Green, Ohio, has agreed to purchase Union Federal Bank of Indianapolis, and its parent company, Waterfield Mortgage, for $330 million in stock and cash.A spokesman for Sky said the company will not purchase much in the way of mortgage banking assets belonging to Waterfield. In mid-January, American Home Mortgage, Melville, N.Y., agreed to buy most of Waterfield's production offices, with its $19 billion in residential servicing rights reportedly going to Citigroup. (The Citigroup part of the transaction has not been confirmed, and both parties refuse to comment.) Union Federal, the fourth-largest bank in the state, has 44 full-service centers. The sale includes Waterfield's insurance and settlement services divisions. Sky can be found on the Web at http://www.skyfi.com.

Mortgage companies trimmed 1,400 full-time employees from their payrolls in December, following 2,000 job cuts in November.The U.S. Bureau of Labor Statistics reported that employment in the mortgage banker/broker sector declined to 500,900 in December from 502,300 in November. BLS previously reported that mortgage firms shed 200 employees in November. But a year-end benchmark revision now shows that companies actually were more aggressive in cutting their payrolls. Overall, industry employment averaged 489,900 in 2005, compared with 467,700 in 2004. In the past few weeks, MortgageWire has reported on layoffs at prime and subprime lenders alike, including Ameriquest Mortgage, Argent Mortgage, Aurora Loan Services, BNC Mortgage, ECC Capital Corp., and Countrywide Home Loans. (See the Feb. 6 issue of National Mortgage News for more employment-related stories.) The BLS can be found online at http://stats.bls.gov.

Freddie Mac says it expects that a flattening yield curve will increase its opportunities to expand its credit guarantee business and invest in fixed-rate mortgages this year.A flattening of the yield curve "plays to our traditional strength," Freddie's president and chief operating officer, Eugene McQuade, told an investor conference sponsored by Citigroup. Freddie is forecasting a decline in adjustable-rate mortgage originations in 2006 and 2007 and projects that banks will find it less profitable to invest in fixed-rate mortgages. "While we have yet to see a selloff of fixed-rate mortgages from bank portfolios, even slightly reduced investment by banks should create better fixed-rate buying opportunities for us in 2006," Mr. McQuade said. The Freddie COO also pointed out that most of the growth in the company's mortgage portfolio came from purchasing subprime mortgage securitizations that are rated triple-A. "We generated most of our retained portfolio growth last year in that sector," he said. Mr. McQuade also told investors that Freddie Mac gained market share from Fannie Mae in 2005 in the issuance of guaranteed mortgage-backed securities. Freddie said its share increased from 41% in 2004 to 45% in 2005.

W Holding Company Inc., Mayaguez, Puerto Rico, has announced that it will postpone the release of its financial results for the fourth quarter and for 2005 until it completes a review of the accounting presentation of certain mortgage-related transactions.W, the holding company of Westernbank Puerto Rico, said the review involves transactions entered into with Doral Financial Corp. from 2000 to 2005, and whether they represent "true sales" under Statement of Financial Accounting Standards No. 140. The review will also look at the hedge accounting treatment of certain rate swaps under SFAS No. 133. The company said the possible revised classification of the mortgage-related transactions -- previously reported as purchases of residential real estate loans -- "will not result in the need for additional reserves" and that the company "will remain well capitalized under FDIC rules." The company can be found online at http://www.wholding.com.

Capital Title Group Inc., Scottsdale, Ariz., has announced the acquisition of the flood zone determination business of America's Flood Services Inc., Rancho Cordova, Calif., by Capital Title's subsidiary, CTG Real Estate Information Services.The terms of the transaction were not disclosed. The acquired business will be merged into Nationwide TotalFlood, a service subsidiary of CTG REIS. (AFS will retain its core business unit, Flood Insurance Agency and Insurance Tracking.) "This acquisition provides us with an enhanced revenue base and will allow us to provide these newly acquired customers access to a full bundle of origination services, including appraisal, title, closing, and foreclosure services, all available through Nationwide Appraisal Services, another service subsidiary of CTG REIS," said Richard A. Alexander, president and chief executive officer of CTG REIS. The company can be found online at http://www.capitaltitlegroup.com and http://www.nationwide-totalflood.com.

Countrywide Financial Corp., Calabasas, Calif., has reported net earnings of $2.5 billion ($4.11 per share) for 2005, compared with $2.2 billion ($3.63 per share) in 2004, citing record annual mortgage volume amid declining profit margins on prime loans.Countrywide said loan production volume totaled a company and industry record $491 billion for the year, compared with $363 billion in 2004. For the fourth quarter, the company reported earnings of $639 million ($1.04 per share), up 73% from $370 million ($0.61 per share) a year earlier. "Importantly, we achieved these results despite an environment that included volatile interest rates; declining production profit margins throughout the industry; and the adverse effects of 2005's hurricanes, primarily Hurricane Katrina," said Angelo R. Mozilo, Countrywide's chairman and chief executive officer. "If not for the hurricane charges, the company would have surpassed its record of $4.18 per diluted share, achieved in the peak refinance boom year of 2003." Countrywide's prime margins declined to 65 basis points in the fourth quarter, down 11 bps from those of the previous quarter and 25 bps from a year earlier, the company said. The servicing portfolio grew to $1.1 trillion as of Dec. 31, up from $838 billion a year earlier. Countrywide can be found online at http://www.countrywide.com.

American Bank of Saint Paul, St. Paul, Minn., has announced the acquisition of Minnesota Mortgage Financial Corp. from Gaertner Meiers Inc. for an undisclosed amount.Minnesota Mortgage is a mortgage broker for residential and commercial properties, with offices in St. Paul and Maple Grove, Minn. It will now be operated under the name Minnesota Mortgage Financial LLC, with Brad Thoreen as president and 17 loan originators, American Bank said. "Our current customer base can benefit from the opportunity of increased lending abilities in secondary-market mortgages," said John Seidel, American Bank's president and chief executive officer. The bank can be fund online at http://www.americanbankmn.com.

Class B-1 notes issued by Eastman Hill Funding I Ltd., a collateralized debt obligation partly composed of residential mortgage-backed securities, has been downgraded from B to CCC by Fitch Ratings.In addition, the ratings on four other classes were affirmed. Fitch said the deal is failing its coverage ratio tests as follows: overcollateralization has declined to 108.7%, below the trigger level of 109.0%, and its interest coverage ratio of 81.1% falls far short of the trigger of 115.0%. RMBS represent 30% of the transaction, the rating agency said. Fitch can be found on the Web at http://www.fitchratings.com.