Servicing

The founder of merger-and-acquisition firm RJ Easton and mortgage M&A specialist StartBank has combined the two companies, citing the aim of enabling them to work together more closely as a global entity."The two top advisory firms will now operate as a united force going forward under the more widely recognized marquee RJ Easton," said Richard Easton II, founder and chief executive officer of both companies. As a result of the move, StartBank chief operating officer Richard Feldman will become chief operating officer and senior managing director of the combined enterprise and will oversee worldwide advisory operations for RJ Easton. In conjunction with the merging of the two firms, RJ Easton has also launched a newly revised website that Mr. Easton said utilizes the latest in Flash technology. RJ Easton can be found on the Web at http://www.rjeaston.com.

Two classes of Structured Asset Mortgage Investments mortgage pass-through certificates have been downgraded by Fitch Ratings, and a third has been removed from Rating Watch Negative.The downgrades in the SAMI Inc. series 2000-1 group 1 were as follows: class IB4, from BB to BB-minus, and class IB5, from B to B-minus. The rating on class IIIB4 of SAMI Inc. series 2000-1 group 3 was affirmed at BBB and removed from Rating Watch. In addition, Fitch affirmed the ratings on 35 other classes from several SAMI securitizations. The downgrades reflect deterioration in the relationship between credit enhancement and expected losses, Fitch said.

The decline in foreclosures in California has bottomed out, and a shift to a buyer's market in the state could lead to rising mortgage defaults, according to ForeclosureS.com, a distressed property investment advisory firm based in Fair Oaks, Calif.Foreclosures are now below "historic baselines" in some markets, and the default rate "has nowhere to go but up," the firm said. "According to Trendgraphix Inc., the Sacramento metro area saw 2,318 price reductions in May of this year," said Alexis McGee, president of ForeclosureS.com. "In July, we saw 4,100. August, at midmonth, was on track for 4,500. That's a cooling market." Ms. McGee added, however, that this does not suggest the existence of a so-called price bubble. "Contrary to some claims in the media that the sky is falling, we see a plateau forming, with modest price corrections in overheated markets," she said. ForeclosureS.com can be found on the Web at http://www.foreclosures.com.

Class B of First Union Home Equity Loan Trust, series 1997-2, has been downgraded from CCC to C by Fitch Ratings.The downgrade was attributed to the poor performance of the collateral, which consists of subprime fixed-rate and balloon mortgages. Insufficient credit enhancement on the certificates has resulted in principal reductions of the bond balance, the rating agency said. The deal has approximately $1.86 million in foreclosures and real estate owned and may sustain future losses, Fitch said. The rating agency can be found online at http://www.fitchratings.com.

The CRA Qualified Investment Fund, Ft. Lauderdale, Fla., which invests in fixed-income securities to aid affordable housing, has dedicated $50 million toward post-Hurricane Katrina reconstruction in the affected Gulf states and in South Florida and parts of Texas, where the largest numbers of evacuees have relocated.Of the total, $40 million comes from institutional shareholders affected by the storm and $10 million is from individual investors and their investment advisers. The fund said it hopes to raise at least $50 million more. "The reality is that what these communities really need to get back on their feet are major investments in infrastructure, housing, small businesses, schools, and other vital community services," said Barbara VanScoy, the fund's portfolio manager. "This is a power opportunity to show what community investing can do."

Freddie Mac has announced a 90-day moratorium on payments of principal and interest to multifamily borrowers with properties in major disaster areas linked to Hurricane Katrina.Borrowers with properties in disaster areas qualified for individual assistance (as designated by the Federal Emergency Management Agency) should contact their Freddie Mac seller/servicer for more information, the government-sponsored enterprise said. "We are taking this step to help ensure that our multifamily seller/servicers and borrowers have the financial resources they need in the wake of this unusually destructive storm," said Richard F. Syron, Freddie Mac's chairman and chief executive officer. Freddie Mac said the forbearance policy complements the one set forth for its single-family borrowers.

The Foreclosure Economic Advisory Council, a new nonprofit group formed to promote sustainable homeownership by analyzing foreclosure trends, has announced the members of its advisory board.The members are: Wanda Alexander, founder, president, and chief executive officer of Horizon Consulting Inc.; James P. Gaines, a research economist at the business school of a Southwestern university; Bradford R. Geisen, founder of Foreclosure.com in Boca Raton, Fla.; Glenn E. Gromann, senior partner at Smith and Gromann PA, a specialty real estate law firm; Frank Marshall, a frequent speaker at conferences in the real-estate-owned industry; and Michael G. Nathans, founder, president, and CEO of PRBC.com, a credit bureau payment reporting business. Marla Webb has been named senior adviser to the council. "A sustained high rate of foreclosures in the country, as well as the continued uncertainty within the real estate market and the increasing number of homeowners engaged in alternative, low-payment mortgage programs, led us to develop the FEAC -- with the goal of understanding what the primary causes of foreclosures are and how to better promote sustainable homeownership in the U.S.," Ms. Webb said.

Freddie Mac has identified the loan-level variables it intends to disclose at issuance for single-family fixed-rate and adjustable-rate mortgage Participation Certificates.The company said it will begin providing the expanded disclosures in the fourth quarter and that updates to PC disclosures will continue to be available at the pool level for new and previously issued PC securities. Freddie Mac said it is working with data providers to accommodate the disclosures of several dozen loan-level variables, including credit score, loan age, loan purpose, net note rate, occupancy status, original loan-to-value ratio, property type, and servicer name. Freddie said it will make the disclosures available on its website, http://www.freddiemac.com/mbs, beginning in the fourth quarter.

Fannie Mae has announced that it will make available 1,500 single-family properties from its inventory of real estate owned to provide temporary housing for individuals and families displaced by Hurricane Katrina.The government-sponsored enterprise said it will provide the REO properties for rent-free leasing for up to 18 months. The properties are located in states with the highest concentration of evacuees, including Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Oklahoma, Tennessee, and Texas. Fannie Mae said it will discuss how best to carry out the initiative with the Department of Housing and Urban Development and the Federal Emergency Management Agency. The GSE can be found online at http://www.fanniemae.com.

Two classes of Ace Securities Corp. series 1999-LB2 mortgage-backed securities have been downgraded by Fitch Ratings.Class M-2 was downgraded from A to A-minus, and class B was downgraded from BBB to BBB-minus. In addition, Fitch affirmed the ratings on 13 classes from five Ace Securities deals and upgraded three classes. The rating agency said the downgrades resulted from higher-than-expected collateral losses and a deteriorating relationship between loss expectations and credit support. "Losses have exceeded excess spread in five out of the last six distribution dates, resulting in a decline of [overcollateralization] to $1.85 million, below its target of $2.08 million," Fitch said. The pool consists of adjustable- and fixed-rate, first-lien residential subprime mortgage loans.