Servicing

Washington Mutual Inc., Seattle, has reported earnings of $844 million ($0.95 per share) for the second quarter, up 73% from $489 million ($0.55 per share) a year earlier.Net income for the home loans business segment (which excludes purchased specialty mortgage finance and Long Beach Mortgage Co.) totaled $209 million in the second quarter, compared with $242 million in the first quarter and a loss of $59 million in the second quarter of 2004, WaMu said. Originations of home loans totaled $44.86 billion for the quarter, up from $38.50 billion in the first quarter but down from $56.22 billion a year earlier. "A year ago we acknowledged our challenges in integrating our mortgage banking acquisitions effectively into our operations and enhancing the risk management of our mortgage servicing asset," said Kerry Killinger, WaMu's chairman and chief executive officer. "I said we would face those challenges head on and build a mortgage team that is one of the industry's best. I am proud to say that we have done exactly that, and after four consecutive quarters of solid performance, our Home Loans Group is now positioned for growth." WaMu can be found online at http://www.wamu.com.

Five classes from three Asset Backed Funding Corp. home equity loan asset-backed certificate transactions have been downgraded by Fitch Ratings.The downgrades were as follows: ABFC series 2001-AQ1, class M-2, from BBB to BB, and class B, from B-minus to C; ABFC series 2002-SB1, class B, from BB to B; and ABFC series 2002-WF1, class M-3, from BBB to BBB-minus, and class B, from BB-plus to B-plus. Fitch attributed the downgrades to monthly losses that have reduced available credit support. In addition, 90-day delinquencies have averaged between 18% and 23% of the current pool balances, the rating agency said. Fitch can be found online at http://www.fitchratings.com.

GMAC Mortgage Corp., Horsham, Pa., has announced that industry veteran Tom Donatacci has returned to the company as senior vice president in its Business Development Group.GMAC Mortgage said Mr. Donatacci will be responsible for all third-party subservicing sales and marketing. In his previous stint with GMAC Mortgage in the late 1990s, Mr. Donatacci was an executive in the company's capital markets operation and helped build its servicing portfolio, the company said. In addition, he was involved in high-profile deals such as the acquisition of the mortgage servicing operations of Wells Fargo Bank. He was most recently the head of the mortgage servicing transactions business at Lehman Brothers/Cohane Rafferty, where "he worked on headline-making industry deals, including the sale of GE Mortgage, Fleet Mortgage, Homeside Lending, and Principal Residential Mortgage," GMAC Mortgage said.

BNP Residential Properties Inc., a real estate investment trust based in Charlotte, N.C., has been listed on the new Russell Microcap Index.The index, which was launched July 1, consists of the stocks of the smallest 2,000 companies in the U.S. equity market. BNP, an apartment REIT, can be found on the Web at http://www.bnp-residential.com.

Wells Fargo & Co., the nation's second-largest mortgage servicer, has reported record net income of $1.91 billion ($1.12 per share) for the second quarter, despite a significant revenue decline at Wells Fargo Home Mortgage related to the impairment of mortgage servicing rights.The profits were up 11% from $1.71 billion ($1.00 per share) a year earlier. Mortgage originations in the community banking segment totaled $85 billion in the second quarter, an increase of $20 billion from the level recorded in the first quarter, but down from $96 billion a year earlier, the company said. But Home Mortgage revenue declined $559 million, or 42%, from that of a year earlier due partly to a $304 million MSR impairment charge, Wells Fargo reported. The company's mortgage servicing portfolio totaled $874 billion of home loans as of June 30, up 17% from that of a year earlier. The MSR asset was valued at $8.5 billion, or $1.12% of loans serviced for others, compared with $8.5 billion and 1.37% as of June 30, 2004, according to Wells Fargo. The San Francisco-based company can be found online at http://www.wellsfargo.com.

Eight classes from three Conseco/Green Tree home equity and home improvement loan deals have been downgraded by Fitch Ratings.The downgrades were as follows: Green Tree Home Equity 1999-D, class B1, from BBB to BB-plus; Conseco Home Improvement 2000-E, class M1, from AA to AA-minus, class M2, from A to BBB-minus, class B1, from BBB to BB, and class B2, from BB to CC; and Conseco Home Equity 2001-D, class M2, from A-minus to BBB, class B1, from BBB-minus to BB-minus, and class B2, from BB-minus to CCC. In addition, Fitch upgraded 52 classes in 22 Conseco/Green Tree transactions and affirmed the ratings on 18 other classes. The downgrades were attributed to concerns about the adequacy of credit enhancement in view of expected losses.

Eight classes from six Saxon Asset Securities Trust issues have been downgraded by Fitch Ratings.The downgrades were as follows: series 1999-5, class BF-1, from BB-minus to B-minus; series 2000-2 group 1, class MF-2, from A to BBB; series 2000-3 group 1, class MF-2, from BBB to BB; series 2000-4 group 1, class MF-2, from BBB to BB; series 2001-1 group 1, class MF-2, from BBB to BB; and series 2001-3, class M-1, from AA to A, class M-2, from A to BBB, and class B, from BBB to BB. The downgrades reflect "deterioration in the relationship between credit enhancement and future loss expectations," Fitch said. All the loans -- fixed- and adjustable-rate subprime loans secured by first and second liens -- were originated or acquired by Saxon Mortgage Inc., Glen Allen, Va. "Although losses and delinquency have generally been higher than initially expected, the bonds in transactions prior to series 2001-3 have benefited from trigger requirements, which have prevented credit enhancement from stepping down and overcollateralization from being released," the rating agency said. "It is Fitch's expectation that the triggers in these transactions will continue to fail, and credit enhancement will continue to grow as a percentage of the outstanding pool balance."

Foreclosures continued to decline in California in the second quarter, and smaller home price increases suggest that the state's "unprecedented price boom" of recent years may be ending, according to Foreclosures.com, Fair Oaks, Calif.Overall, 11,715 notices of default were filed in the second quarter, down from 13,363 in the first quarter, the company reported. Alexis McGee, president of Foreclosures.com, said home price appreciation is slowing in both Northern and Southern California. "For example, price appreciation in Orange County has slowed to 8.7%, the lowest rate of increase in more than five years," she said. The company can be found online at http://www.foreclosures.com.

MHI Hospitality Corp., a real estate investment trust based in Williamsburg, Va., has been listed on the new Russell Microcap Index.The index, which was launched July 1, consists of the stocks of the smallest 2,000 companies in the U.S. equity market. MHI, a lodging REIT, can be found on the Web at http://www.mhihospitality.com.

Two classes of GS Mortgage Participation Securities mortgage pass-through certificates have been downgraded by Fitch Ratings.The downgrades, from GSMPS Mortgage Loan Trust 2003-3, were as follows: class B-4, from BB to B, and class B-5, from B to CCC. In addition, the ratings on five other classes from the deal and one class from a second GSMPS transaction were affirmed. The downgrades were attributed to growing average monthly losses in series 2003-3 over the past 12 months, from $73,000 to $115,000 per month. The collateral for the deal consists of reperforming loans backed by the Federal Housing Administration or the Department of Veterans Affairs, Fitch said.