Servicing

Thirteen classes from two Lehman manufactured housing securitizations have been downgraded by Fitch Ratings.The downgrades were as follows: class I-A-1 of Lehman ABS Corp. series 1998-1 group I, from AA to A-plus, and classes II-A-1 and II-A-2 of series 1998-1 group II, from B to B-minus; and Lehman ABS Corp. series 2001-B, classes A1 to A6, from AAA to AA, class M1, from AA to BBB-plus, class M2, from A to BB, and class B1, from BB to B-minus. Fitch also affirmed the ratings on four classes from the transactions. The downgrades in series 2001-B were attributed to deterioration in the relationship between credit enhancement and expected losses, and those in 1998-1 were attributed to the likelihood of interest shortfalls on the underlying classes. Fitch can be found online at http://www.fitchratings.com.

United Financial Mortgage Corp., Oak Brook, Ill., a fast growing, publicly traded lender, has agreed to sell its business to the Airlie Group, a private investment fund based in Greenwich, Conn.Airlie affiliates ARH Mortgage and Airlie Opportunity Master Fund have agreed to pay $5.64 a share for UFMC, a 30% premium from its share price when the market closed Sept. 2. National Mortgage News broke the news in its Sept. 5 issue that Airlie was talking to UFMC about a deal. For its fiscal year ending April 30, UFMC funded $2.7 billion in loans. It has 50 branch offices, compared with 35 a year ago. Founded almost 20 years ago, UFMC has a $1.7 billion mortgage servicing portfolio and $258 million in assets, according to documents filed with the Securities and Exchange Commission. (See NMN for more details.) UFMC can be found online at http://www.ufmc.com.

Minneapolis-based wholesale lender Homecomings Financial is offering mortgage relief, counseling, and other assistance to more than 14,000 households in the 53 counties and parishes that have been declared federal disaster relief areas in Mississippi, Louisiana, and Alabama."We're prepared to do whatever we can to lessen the burden for our customers as they cope with this devastating situation," said Bob Appel, managing director. Customers in the hurricane disaster area are directed to call a toll-free hotline at 800-206-2901 to speak with a specially trained agent who is prepared to provide information on relief efforts and support agencies, including the American Red Cross, governmental agencies, and shelters in their areas. In addition, these agents can offer financial relief if necessary to customers who are experiencing financial hardships due to the hurricane and its aftermath. Homeowners should also call 888-995-HOPE to speak with counselors who can provide free foreclosure prevention counseling, a service offered through the Homeownership Preservation Foundation. Homecomings Financial and its parent company, GMAC-RFC, which is owned by Residential Capital Corp., plan to match hurricane relief donations made by its 4,700 employees, up to $1,000,000.

The Department of Housing and Urban Development is instructing all lenders approved by the Federal Housing Administration to provide foreclosure relief to FHA-insured families affected by Hurricane Katrina, and has established a single toll-free number to assist hurricane victims.HUD Secretary Alphonso Jackson said the relief includes a 90-day moratorium on all foreclosure of FHA-insured properties in the presidentially declared disaster areas. Mr. Jackson is also encouraging lenders to undertake actions such as mortgage modification, refinancing, and waiver of late charges. HUD is contacting top mortgage lenders about their inventory of repossessed homes, the homebuilding industry for help with building materials and supplying construction workers, its housing counseling network to assist displaced homeowners, and the manufactured housing industry about available housing stock. HUD said it will identify vacant multifamily housing, public housing units, and HUD-owned homes that could be used as temporary housing for those forced from their homes. The department has a special mortgage insurance program under the National Housing Act to assist disaster victims, which allows for reconstruction or replacement of homes, and borrowers are eligible for 100% financing. The new toll-free number, 1-888-297-8685, was established to streamline assistance, which was previously available via separate numbers for each different service offered by HUD.

Three classes of mezzanine and subordinated tranches from two mortgage-backed securitizations issued by Credit Suisse First Boston Mortgage Securities Corp. have been placed under review for possible downgrade by Moody's Investors Service.The affected securities are class B of series 2002-HE1 and classes M-F-2 and B-F of series 2002-HE4. In addition, Moody's placed three tranches from three CSFB mortgage-backed deals under review for possible upgrade. The negative actions were based on the fact that the bonds' credit enhancement levels (including excess spread) are low compared with projected losses for the current rating level, the rating agency said. The pools are subprime first-lien adjustable-rate and fixed-rate loans.

PMI Mortgage Insurance Co., Walnut Creek, Calif., has announced that it will provide disaster relief for borrowers victimized by Hurricane Katrina in the form of forbearance, contributions, and matching support for employee donations.PMI said it will work with lenders and borrowers in declared federal disaster areas to avoid mortgage delinquencies and foreclosures. "PMI recognizes the same payment relief options offered by Fannie Mae and Freddie Mac, such as suspending or reducing mortgage payments, waiving late fees, and not reporting delinquencies caused by the disaster to credit bureaus," the company said. In addition, the PMI Foundation will donate $50,000 to the American Red Cross for disaster relief, PMI said. PMI's parent company, The PMI Group Inc., can be found online at http://www.pmigroup.com.

Freddie Mac and the Freddie Mac Foundation have announced a $10 million donation to aid the American Red Cross and other organizations carrying out relief efforts in the wake of Hurricane Katrina.The $10 million, divided equally between the company and the foundation, is in addition to a previously announced $100,000 donation to the Red Cross. "As the region's needs grow clearer, Freddie Mac is committed to pursuing other housing-related strategies and providing resources that will alleviate suffering in the hurricane's aftermath," Freddie Mac said. The government-sponsored enterprise can be found on the Web at http://www.freddiemac.com, and

The Mortgage Bankers Association is urging its members to offer mortgage relief to borrowers victimized by Hurricane Katrina.Citing the disaster relief policies of Fannie Mae, Freddie Mac, Ginnie Mae, the Federal Housing Administration, and the Department of Veterans Affairs, the MBA asked in a letter that its members "consider implementing these options for affected borrowers." The association also encouraged its members to "reach out to potentially affected customers to inform them of the relief options available to them and to assist them where possible." The MBA can be found online at http://www.mortgagebankers.org.

Hurricane Katrina may turn out to be the largest insured loss in U.S. history, surpassing 9/11 and Hurricane Andrew, according to Fitch Ratings.While cautioning that it will be "a long time" before insured loss estimates can be made with any certainty, the rating agency said it now expects insured losses to be closer to the high end than the low end of published estimates, which have ranged from $9 billion to $25 billion. Insured losses totaled $20.1 billion from the Sept. 11, 2001, terrorist attacks and $20.5 billion from Hurricane Andrew, Fitch said. Among the factors cited by Fitch in support of its belief that insured losses may be the highest ever are: the consequences of the levee breach in New Orleans; widespread business interruption losses that are now expected; looting-related losses; and potential environmental liabilities. The rating agency said it does not expect insolvencies among larger insurers, but that some "could face downgrades." Fitch can be found online at http://www.fitchratings.com.

Mortgage companies continued to add new full-time employees to their payrolls in July, bringing the total of new hires over the past 12 months to 45,100.Lenders hired 4,800 new employees in July, according to the August employment report released by the U.S. Bureau of Labor Statistics, as jobs in the mortgage banking/broker sector rose from 517,100 in June to 521,900 in July. (There is a one-month lag in BLS reporting of mortgage sector employment data. The August data will be released Oct. 7.) Employment has been steadily rising over the past 12 months, and record home sales, along with a high level of refinancings, could make 2005 the second-best year ever for originations. Jay Brinkmann, financial economist for the Mortgager Bankers Association, pointed out that purchase-mortgage transactions are more labor intensive than refinancings, placing more demands on loan officers and back-office personnel. He also noted that heavy subprime volumes could be prompting more hires. Meanwhile, the U.S. economy generated 169,000 new jobs in August and the unemployment rate edged down to 4.9% from 5.0% in July. BLS economists also revised the July jobs number upward from 207,000 to 242,000 in the Sept. 2 report. The BLS can be found online at http://stats.bls.gov.