Servicing

The National Rural Utilities Cooperative Finance Corp. is selling $500 million of three-year NRUCFC-secured notes to the Federal Agricultural Mortgage Corp.Farmer Mac said the notes are secured by mortgage debt issued by NRUCFC-member rural electric distribution cooperatives. NRUCFC is a privately owned, nongovernment organization that provides capital and financial products to approximately 1,000 electric cooperatives in 47 states. Farmer Mac, a congressionally chartered corporation that provides a secondary market for rural housing and agriculture-related mortgage debt, said the deal provides NRUCFC with a new source of liquidity for its rural utility cooperative members.

Credit Suisse First Boston says it has agreed to amend its letter of intent regarding the possible purchase of SPS Holdings, the parent of Select Portfolio Servicing, extending CSFB's option to acquire the mortgage servicer beyond the original expiration date of July 31."The proposed transaction is subject to the negotiation and execution of mutually acceptable definitive documentation," CSFB said, adding that there is no certainty that CSFB will consummate a deal to acquire SPS, which was formerly named Fairbanks Capital. CSFB did not set a new deadline for reaching a deal under the letter of intent.

Sixteen classes from eight mortgage-backed securities transactions issued in 2001 by Credit Suisse First Boston Mortgage Securities Corp. have been downgraded by Moody's Investors Service.In addition, Moody's upgraded one class from one of the CSFB deals and confirmed the rating on one other class. The downgrades were attributed to higher-than-expected losses, especially as a result of high loss severities. The securitizations are backed by pools of subprime first-lien adjustable- and fixed rate mortgages, Moody's said. The rating agency can be found on the Web at http://www.moodys.com.

The Prestwick Mortgage Group, Alexandria, Va., is brokering the sale of servicing rights on $150 to $210 million per quarter of Fannie Mae and Ginnie Mae mortgage servicing rights.The bulk flow portfolio's sample characteristics include an anticipated average Fannie Mae loan balance of $124,000 and Ginnie Mae balance of about $112,000. The loans will be made in Indiana, Ohio, Michigan, and Kentucky. The seller is a bank-affiliated mortgage company. Bids are due Aug. 9.

Irwin Financial Corp., Columbus, Ind., has reported a mortgage-related net loss of $1.1 million ($0.04 per share) for the first quarter, compared with net income of $17.9 million ($0.60 per share) a year earlier.The mortgage banking segment recorded a $9.2 million loss in the second quarter, compared with net income of $5.5 million in the second quarter of 2004, the company reported. "The critical issues in our mortgage banking line of business are the low origination margins and the effectiveness of our management of the servicing asset," said Will Miller, Irwin Financial's chairman. "We are actively addressing both. On the production side, we have introduced a number of new, higher-margin products which have been well received both by our customers and by the secondary markets to whom we sell the loans. On the servicing asset management side, we have reduced our mark-to-market exposure through servicing sales." The company can be found online at http://www.irwinfinancial.com.

Six states account for more than half the nation's foreclosures, according to RealtyTrac, an Irvine, Calif.-based company that claims the largest national database of troubled properties.Texas, Florida, California, Georgia, Ohio, and Illinois account for 37,249 of the 67,024 properties entering foreclosure nationwide in June, RealtyTrac said. The June total is a 7.4% increase from May's 62,432, and is the highest number so far this year. But RealtyTrac's chief executive officer, James Saccacio, said it is not cause for concern. "Tens of thousands of properties continue to fall into foreclosure each month, even in a generally strong real estate market," he said. The number of new repossessions in California was up 19% in June. But at the rate of one for every 2,773 households in the Golden State, that still represents less than two-thirds the national average of one repo per 1,726 households. In Texas, on the other hand, the foreclosure rate is 2.7 times the national average, or one per 636 households.

Bank of America Corp., Charlotte, N.C., has announced a reorganization of two global business segments that it says will enable it to better serve the needs of investors in residential mortgages, car loans, commercial credits, and other products.Under the reorganization, the bank's Global Business & Financial Services segment and its Global Capital Markets & Investment Banking segment will be combined into the Global Corporate & Investment Banking business, BoA said. Gene Taylor, who heads Global Business & Financial Services, will become the executive in charge of the combined business and has been named vice chairman of BoA, the company said. In addition, Alvaro G. de Molina has been named chief executive officer of Banc of America Securities. "We are bringing together in one group all the products and distribution teams that serve all businesses from smaller businesses to the largest multinational corporations," said Kenneth D. Lewis, chairman and CEO of BoA. The company can be found online at http://www.bankofamerica.com.

Three classes of notes issued by Sunrise CDO I have been downgraded by Fitch Ratings.The downgrades were as follows: class A, from AAA to BBB; class B, from BBB-minus to B; and class C, from CCC-plus to C. The transaction is a collateralized debt obligation supported by other CDOs, residential and commercial mortgage-backed securities, asset-backed securities, and corporate debt securities. Fitch said the downgrades stemmed from declining overcollateralization ratios, primarily as a result of $14 million in writedowns related to four assets. The rating agency can be found on the Web at http://www.fitchratings.com.

IndyMac Bancorp Inc., Pasadena, Calif., has reported record mortgage loan volume and record net earnings of $83.1 million ($1.26 per share) for the second quarter, compared with pro forma net earnings of $54.6 million ($0.90 per share) a year earlier.(IndyMac earned $23.0 million, or $0.38 per share, in the second quarter of 2004 under generally accepted accounting principles. The difference between pro forma and GAAP earnings in 2004 was related to a Securities and Exchange Commission staff accounting bulletin that took effect April 1, 2004, IndyMac said.) IndyMac's mortgage loan production totaled a record $14.2 billion in the second quarter, up 51% from that of a year earlier, the company said. Richard H. Wohl, IndyMac Bank's newly appointed president, said the bank boosted its mortgage market share to 1.82%, a 56% year-over-year increase. "A significant portion of this increase was driven by our re-entry into the correspondent and conduit channels, which contributed 35%, and our new reverse mortgage company, Financial Freedom, which contributed 13%," Mr. Wohl said.

The risk of price declines over the next two years has increased in 36 of the nation's 50 largest housing markets, according to the latest PMI U.S. Market Risk Index.PMI Mortgage Insurance Co., the Walnut Creek, Calif.-based mortgage insurer that created the index, said markets with a greater than 50% chance of such price declines are Boston-Quincy (Mass.), at 553; Nassau-Suffolk (N.Y.), at 540; San Diego-Carlsbad-San Marcos (Calif.), at 528; San Jose-Sunnyvale-Santa Clara (Calif.), at 513; Santa Ana-Anaheim-Irvine (Calif.), at 512; and Oakland-Fremont-Hayward (Calif.), at 509. The index values mean, for example, that Boston has a 55.3% probability of experiencing a home price decline in the next two years. "The latest PMI Market Risk Index numbers show that house price risk continues to be concentrated along the coasts, as it has been for some time," said Mark Milner, chief risk officer of PMI Mortgage Insurance. "But what we are seeing with these numbers is that risk has increased in many noncoastal markets as well." PMI can be found online at http://www.pmigroup.com.