Servicing

Thornburg Mortgage Inc., Santa Fe, N.M., has reported doubling the size of its asset-backed commercial paper facility to $10 billion.The company said the facility provides it with another way to finance its adjustable-rate mortgage securities portfolio. Thornburg Mortgage Capital Resources LLC, a special-purpose bankruptcy-remote entity created especially for the CP facility, acts as the financing vehicle by issuing commercial paper in the form of short-term notes, Thornburg said. Lehman Brothers Inc. is the structuring agent and lead dealer for the transaction. Thornburg, a real estate investment trust and mortgage lender focused on the jumbo ARM segment, can be found online at http://www.thornburg.com.

CharterMac, a New York-based real estate finance company focused on the multifamily sector, has announced the receipt of formal listing approval from the New York Stock Exchange.The company said it plans to transfer the trading of its common stock from the American Stock Exchange to the NYSE on Jan. 10 under its current symbol, CHC. CharterMac can be found on the Web at http://www.chartermac.com.

Luminent Mortgage Capital, San Francisco, has announced that it intends to reposition its spread portfolio assets to improve profitability and dividend-paying capacity and that it has discontinued the use of hedge accounting.The repositioning will involve the sale of some mortgage-backed securities and will entail the recording of a noncash impairment charge of approximately $112 million in the fourth quarter, the company said. Luminent said it believes the move will accelerate its diversification into high-yielding residential mortgage credit investments and enable it to achieve higher returns on equity. As a result of the discontinuation of hedge accounting, as defined in Statement of Financial Accounting Standards No. 133, all changes in the value of Luminent's portfolio of hedges will be reflected in the company's consolidated statement of operations under generally accepted accounting principles, Luminent said. The company can be found online at http://www.luminentcapital.com.

Capital Alliance Income Trust Ltd., a San Francisco-based real estate investment trust, has arranged a two-year, $7.0 million credit facility with Franklin Bank SSB, Houston.The facility has a one-year extension option. It will enable CAIT, a specialty residential mortgage lender, to "pledge its core mortgage portfolio and obtain increased interest rate spreads of approximately 300 basis points" over its existing financing, said Richard Wrensen, the company's executive vice president and chief financial officer. The REIT invests in conforming and high-yielding nonconforming residential mortgage loans on one- to four-unit residential properties, chiefly in California and other Western states. It can be found online at http://www.calliance.com.

Classes M-3 and M-4 from Asset-Backed Securities Corp. mortgage-pass through certificates series 2002-HE3 have been placed on Rating Watch Negative by Fitch Ratings.The rating actions were attributed to relatively high monthly losses that have been greater than the available excess spread, resulting in a deterioration of the amount of overcollateralization. The group 2 overcollateralization target amount has stepped down, while the group 1 OC target amount has not been allowed to step down due to a cumulative-loss trigger event, Fitch said. "The issuer and the trustee are currently reviewing the cumulative-loss trigger event language, which they believe may have been erroneously drafted," the rating agency reported. "If the trigger language were to be corrected (as proposed), group 1 would pass the trigger test and the OC target amount would be allowed to step down." Fitch can be found online at http://www.fitchratings.com.

The Federal Trade Commission has launched a preliminary investigation into the residential servicing practices of Bear Stearns' servicing affiliate to see whether the company is violating consumer protection laws.The investment banker disclosed that it has received a civil investigative demand from the FTC "seeking documents and data relating to EMC Mortgage Corp.'s business and servicing practices." Based in Irving, Texas, EMC Mortgage services $51.8 billion in first and second mortgage loans, according to the Quarterly Data Report, a MortgageWire affiliate. The company is known in the industry as a "scratch-and-dent" servicer, specializing in troubled mortgages. The FTC confirmed the investigation, and Bear Stearns said EMC Mortgage is cooperating with the government. Bear disclosed the inquiry in a mortgage securitization filing with the Securities and Exchange Commission.

Classes M-4, M-5, and M-6 of Ace Securities Corp. asset-backed securities, series 2003-FM1, have been placed on Rating Watch Negative by Fitch Ratings.In addition, the rating agency affirmed the ratings on three other classes from the Ace transaction. Fitch said the negative rating actions resulted from higher-than-expected monthly losses that have been greater than the available excess spread, causing a deterioration in the amount of overcollateralization. The pool consists of 30-year adjustable- and fixed-rate mortgage loans secured by first and second liens.

Class BF-1 of Saxon Asset Securities Trust, series 1999-5, has been downgraded from B-minus to CCC by Fitch Ratings.Fitch also affirmed the ratings on two other classes in the deal. The downgrade reflects a deterioration in the relationship between credit enhancement and loss expectations, the rating agency said. "The high level of losses incurred has resulted in the continuous decline of overcollateralization, which is currently at $718,404, or 2.08% of the current collateral balance," Fitch reported. The transaction has incurred cumulative losses of 5.76%, and approximately 18.96% of the remaining pool balance is more than 60 days delinquent (including bankruptcies, foreclosures, and real estate owned). The collateral consists of fixed-rate subprime mortgage loans secured by first liens, primarily on one- to four-family residential properties.

Two classes of Structured Asset Security Corp. Amortizing Residential Collateral Trust series ARC 2001-BC5 have been downgraded by Fitch Ratings.Class M-1 was downgraded from AA to AA-minus, and class M-2 was downgraded from A to BBB-plus. Fitch also affirmed the rating on one other class in the transaction. The downgrades were attributed to a deterioration in the relationship between credit enhancement and expected losses due to higher-than-expected serious delinquencies and to overcollateralization that is below the target amount. Approximately 41% of the pool is more than 60 days delinquent, and in five of the past 12 months the excess spread has not been sufficient to cover the monthly losses, the rating agency reported. The pool consists of subprime fixed- and adjustable-rate mortgage loans secured by first and second liens, primarily on one- to four-family residential properties.

Seven classes in four CSFB Mortgage Securities Corp. mortgage-backed certificate transactions have been downgraded by Fitch Ratings.The downgrades of mortgage-backed pass-through certificates were as follows: series 2002-5 G4, class IVB4, from BB to B; series 2002-18 G2, class IIB3, from BB to B, and class IIB4, from CCC to CC; and series 2002-22 G3 and 4, class DB3, from BB to B, and class DB4, from CC to C. Also downgraded were mortgage-backed certificates series 2002-32R: class M, from BB-minus to CCC, and class B-1, from CCC to C. (This series was a type of real estate mortgage investment conduit called a re-REMIC, consisting of select tranches from six different CSFB transactions.) In addition, Fitch upgraded three classes and affirmed the ratings on 29 classes from eight CSFB issues. The downgrades were attributed to a deterioration of credit enhancement relative to consistent or rising monthly losses. The re-REMIC has been incurring monthly losses of approximately $300,000, and the class B1 could be entirely written down in less than 12 months, at which time the class M would begin taking losses, Fitch explained.