Servicing

Fannie Mae has mortgage relief provisions in place for Florida borrowers facing hardships as a result of widespread flooding and damage caused by Hurricane WilmaUnder Fannie Mae's disaster relief provisions, lenders can suspend mortgage payments for up to three months, reduce payments for up to 18 months, or in more severe cases, create longer loan payback plans. Fannie Mae's servicing guidelines also advise lenders to counsel borrowers on all possible mortgage payment workout options, and to inform homeowners of disaster relief available from federal agencies. Payment relief is available for single-family mortgages, including condos, serviced by Fannie Mae lenders in areas affected by the hurricane. Holders of Fannie Mae mortgage securities will be paid as usual during the relief period. Mortgage lenders doing business with Fannie Mae should determine appropriate relief steps by considering any uninsured losses, extended unemployment, and extraordinary expenses related to the storms that affect mortgage payments, the government-sponsored enterprise said. Fannie Mae can be found online at http://www.fanniemae.com.

Sunset Financial Resources Inc., a real estate investment trust based in Jacksonville, Fla., has reported the hiring of Banc of America Securities LLC as a financial adviser to review its business plan.The mortgage REIT's president and chief executive officer, George Deehan, said the move comes after the appointment of a new management team and the addition of two more independent directors to its board in recent months. In view of the management changes, "now is an opportune time to analyze the company's business plan and all strategic alternatives available to the company," Mr. Deehan said. The REIT can be found online at http://www.sunsetfinancial.net.

Fannie Mae acquired $70.6 billion in mortgages during September, by far the best purchase month of the year for the government-sponsored enterprise.However, the mortgage giant -- which is dealing with an $11 billion accounting scandal -- saw its retained portfolio drop 20% to $727.8 billion. (The comparison is with portfolio numbers from the same month last year.) During September, Fannie Mae out-purchased its chief rival, Freddie Mac, by about $8 billion. Even though Fannie bought more loans than Freddie, the difference between their retained portfolios is down to just $43 billion: $727 billion for Fannie, and $684 billion for "little brother" Freddie. Fannie Mae can be found online at http://www.fanniemae.com.

Five classes of notes issued by Pacific Coast CDO Ltd. have been downgraded by Fitch Ratings.The downgrades were as follows: class A, from AAA to AA; class B, from BBB-minus to B; class C-1, from B-minus to C; class C-2, from B-minus to C; and preference shares, from CC to C. Pacific Coast is a collateralized debt obligation that consists of 50.7% residential mortgage-backed securities, 17.3% asset-backed securities, 16.1% commercial MBS, 9.2% corporate bonds, and 6.8% CDOs. Since Fitch's last rating action on Aug. 31, the portfolio "has continued to deteriorate," Fitch said, pointing to large exposures in the manufactured housing and aircraft sectors that have led to the downgrading of approximately 28.2% of the portfolio. Fitch can be found online at http://www.fitchratings.com.

Freddie Mac is suspending mortgage payments and providing other short-term financial relief to borrowers affected by Hurricane Wilma.Servicers may reduce or suspend mortgage payments for up to 12 months for borrowers with Freddie Mac-owned mortgages in the declared major-disaster areas. "The relief measures are intended to expedite the release of insurance proceeds to help borrowers secure materials, labor and other resources to get the home repair process under way," said Richard F. Syron, Freddie Mac's chairman and chief executive officer. Freddie Mac said it is encouraging servicers to waive assessments of penalties or late fees against borrowers with disaster-damaged homes and not to report forbearance or delinquencies caused by the disaster to the nation's credit bureaus.

Countrywide Financial Corp., Calabasas, Calif., has reported consolidated net earnings of $634 million ($1.03 per share) for the third quarter, a 27% increase from $498 million ($0.81 per share) in the third quarter of last year that was attributed mainly to the company's mortgage segment.Pretax earnings by the mortgage banking operations totaled $703 million in the third quarter, up 42% from $496 million a year earlier. "This increase resulted primarily from a $280 million improvement in servicing sector earnings, partially offset by an $83 million decrease in production sector earnings," said Angelo R. Mozilo, Countrywide's chairman and chief executive officer. Loan production in the mortgage segment totaled $131 billion, up sharply from $77 billion in the third quarter of 2004. "The increase in loan volume resulted in a $37 billion increase in loans sold," Mr. Mozilo said. "The benefit of the increase in sales, however, was more than offset by the decline in margins." Countrywide said its servicing portfolio rose to a record $1.05 trillion as of Sept. 30, up $262 billion from the level of a year earlier.

AmSouth, Birmingham, Ala., is offering a package of disaster relief to assist consumers and small business customers affected by Hurricane Wilma, including flexibility on loan repayments, discounted loan rates, and fee waivers.Skip-a-Payment allows customers with a home equity line of credit or installment loan to skip a payment with no extension fee, AmSouth said. The Special Unsecured Installment Loan Offer lets consumers who qualify for an unsecured loan receive a special rate with no processing fee. Special Business Loan Payment Assistance allows customers to request a 30-day extension for loan repayment. The company said consumers may apply for an array of competitive mortgage products, including affordable housing programs featuring little to no downpayment and requiring no mortgage insurance. And borrowers may apply for a HELOC with a variable interest rate that equals prime minus 0.50%. This rate is good for the life of any transaction that posts in the first 30 days. In addition, customers receive a $100 cash bonus with a new AmSouth HELOC.

At least two communities in California's Central Valley have moved into "home price bubble territory" and are at high risk for price declines, according to ForeclosureS.com, a Fair Oaks, Calif.-based investment advisory firm.The communities of Modesto and Merced are the communities most vulnerable to a fall in home prices in the near to medium-term future and to the probability of a concurrent rise in mortgage defaults, said Alexis McGee, president of ForeclosureS.com. "Several economists, including building industry consultant John Burns of Irvine, rank Modesto as No. 1 among cities in the U.S. that are in a home price bubble," Ms. McGee said. "And Burns ranks Merced as No. 5." The company can be found online at http://www.foreclosures.com.

Freddie Mac acquired $62.54 billion worth of mortgages in September, its best purchase month of the year and its best showing since October 2003.September's purchase volume was the best of the year for the government-sponsored enterprise, but not by much. In August Freddie acquired $62.27 billion worth of mortgages. According to figures released by the company, its retained portfolio continues to grow at a nice clip and is being fed by the GSE's huge appetite for nonagency securities. At the end of September, Freddie had $235 billion in nonagency mortgage-backed securities on its books out of a total portfolio of $684 billion (34%). In January the ratio of nonagency investments to total portfolio holdings was 27%. Freddie Mac can be found online at http://www.freddiemac.com.

Irvine, Calif.-based Mavent has inked a deal to provide compliance services to Ocwen Financial Corp., West Palm Beach, Fla., a provider of mortgage servicing and loan processing services.Ocwen currently uses Mavent's flagship service, the Mavent Expert System, as a compliance tool for Ocwen's recently announced loan processing and due diligence services. Data received by Ocwen from its clients will be submitted to the Mavent system, where it will be automatically reviewed for compliance with local, state, and federal lending and purchasing regulations. The companies can be found on the Web at http://www.mavent.com and http://www.ocwen.com.