Servicing

Central Pacific Bank, Honolulu, has announced the signing of a letter of intent to acquire Hawaii HomeLoans Inc. for an undisclosed amount.Hawaii HomeLoans is a full-service mortgage broker with two offices, one in Honolulu and one in Kona on the island of Hawaii. It originated $555 million in residential mortgages in the fiscal year ended Feb. 28 and services approximately $750 million in loans owned by third parties, Central Pacific said. Tom Zimmerman, president of Hawaii HomeLoans, will oversee Central Pacific Bank's residential mortgage operations upon the completion of the deal. "With an expanded portfolio and the addition of top mortgage professionals, our bank will be better positioned to service larger residential real estate development projects, from start to finish," said Clint Arnoldus, chief executive officer of Central Pacific. The bank can be found online at http://www.centralpacificbank.com.

Three certificates from two asset-backed transactions issued by Long Beach Mortgage Co. in 2002 have been placed under review for possible downgrade by Moody's Investors Service.The affected Long Beach Mortgage Loan Trust asset-backed certificates are as follows: class M-3 of series 2002-1, and classes M4A and M4B of series 2002-2. The rating actions were attributed to credit enhancement levels that may be low given the projected losses on the underlying pools. "The transactions have taken significant losses, causing gradual erosion of the overcollateralization," Moody's said. "In addition, the severity of loss on the liquidated loans has begun to increase due to a higher concentration of manufactured housing loans." The transactions are backed primarily by first-lien adjustable- and fixed-rate subprime mortgage loans originated by Long Beach. Moody's can be found online at http://www.moodys.com.

New Century Financial Corp., a real estate investment trust based in Irvine, Calif., has priced a public offering of 4.2 million shares of 9.125% series A cumulative redeemable preferred stock at $25 per share.The sole book-running manager of the offering is Bear, Stearns & Co., and the co-managers are Deutsche Bank; Piper Jaffray; Stifel, Nicolaus & Co.; JMP Securities; and Roth Capital Partners. The underwriters have been granted an option to buy up to 630,000 additional shares of the stock to cover any overallotments. New Century, the parent company of New Century Mortgage Corp. and Home 123 Corp., can be found on the Web at http://www.ncen.com.

Thomson IFR Markets, New York, has announced the hiring of three market veterans as part of an initiative to enhance its credit and structured products coverage.The analysts -- Stephen Carter, John Nash, and Christopher Reich -- bring more than 45 years of industry experience in covering such markets as commercial mortgage-backed securities, asset-backed securities, and collateralized debt obligations, the company said. "A major focus of this initiative will be improving IFR Markets' distribution of real-time deal-related information by providing customers with more timely news and analysis on deals when they are announced," the company said. IFR Markets' parent company, The Thomson Corp., can be found online at http://www.thomson.com.

Twenty-one classes from six Bombardier Capital Mortgage Securitization Corp. manufactured housing deals issued from 1998 to 2001 have been downgraded by Fitch Ratings.In addition, the ratings on 11 other classes were affirmed. Fitch noted that Bombardier provided retail financing for manufactured homes before exiting the business in September 2001, and continues to service the loans from a servicing center in Jacksonville, Fla. "When estimating future collateral losses, Fitch assumed a modest decline in default rates based on improving delinquency pipeline trends (i.e., the rate at which repo property being liquidated is outpacing the rate at which borrowers are becoming delinquent)," the rating agency said. Fitch said it expects each pool to incur losses between 30% and 40% of the remaining pool balance.

Twenty-four classes from six Oakwood Homes Corp. manufactured housing transactions have been downgraded by Fitch Ratings.Fitch also affirmed the ratings on 36 classes from 19 MH deals. "The rating actions reflect the continued poor performance of the collateral and the increased rate of credit enhancement deterioration due to adjustments in servicing practices," the rating agency said. Fitch said it expects the collateral performance to improve modestly, but that most bonds will not be able to re-establish the credit enhancement, which deteriorated as a result of the high loss rate in recent months. Oakwood Homes Corp., which was engaged in the production, sale, and financing of manufactured homes, filed for Chapter 11 bankruptcy protection in November 2002, and the company's operations and noncash assets were acquired by Clayton Homes Inc. in April 2004, Fitch said. Clayton Homes is a subsidiary of Berkshire Hathaway Inc. The loans continue to be serviced under Clayton management at the servicing center in Greensboro, N.C.

Freddie Mac has announced that it is requiring its 2,300 mortgage servicers to extend forbearance automatically to borrowers recently released from active duty in the armed forces.Freddie Mac said the new policy, which appears in a June 10 update to Freddie's Single-Family Seller/Servicer Guide, aims to help returning service personnel face financial problems and avoid foreclosure, and is not part of the requirements of the Service Members Civil Relief Act designed to protect service members from creditors only when they are on active duty. "We're extending this forbearance to make sure that lenders do not initiate or resume foreclosure for at least 90 days from a borrower's release date," said Ingrid Beckles, Freddie Mac's vice president of default asset management. "This change gives lenders more time to work with servicemen and women and explore all relief options available." If service members need assistance under Freddie's policy, they should contact their mortgage servicer, who will assess individual circumstances. Freddie Mac can be found online at http://www.freddiemac.com.

The foreclosure of a single-family home, especially one that leaves the home vacant and unsecured, may generate municipal costs in excess of $30,000, according to a new study by the Joint Center for Housing Studies at Harvard University.In addition, area homeowners, business owners, and landlords stand to lose "if a rash of foreclosures brings down property prices, accelerating the decline of an entire neighborhood," the study says. Entitled "Collateral Damage: The Municipal Impact of Today's Mortgage Foreclosure Boom," the report was conducted by William Apgar, a senior scholar at the Joint Center, and Mark Duda, a research fellow there. It was funded by the Minneapolis-based Homeownership Preservation Foundation. "Foreclosures are on the rise across the country -- especially foreclosures of higher-risk nonprime mortgages," said Mr. Apgar, a former commissioner of the Federal Housing Administration. The report concludes that serious delinquencies and foreclosures for nonprime loans can be 10 times higher than for prime loans. The study urges that government, the mortgage industry, and community leaders work together to support grassroots efforts to help homeowners facing foreclosure; reduce the incidence of poorly underwritten or fraudulent loans; and encourage industry participants to "pay their fair share" of foreclosure-related costs.

The senior debt rating of Doral Financial Corp., San Juan, Puerto Rico, has been downgraded from Baa2 to Baa3 by Moody's Investors Service and remains on review for possible further downgrade.Moody's said the rating action reflects Doral's pending restatement of past financial reports to adjust for the value of its interest-only strips. "The company also plans to change its current business model by reducing loans sales that create IOs, thus lowering its profitability," the rating agency said. Doral has estimated an impairment charge of approximately $600 million on its IO strips, and it is determining how to allocate the charge among the affected periods from 2000 to 2004. The rating downgrade reflects "weak internal controls" at Doral, and Moody's also cited corporate governance issues. "Finally, a prolonged delay in the filing of its financial reports could result in liquidity pressures," Moody's said. "Thus, the ratings remain under review for possible further downgrade." Moody's can be found online at http://www.moodys.com.

Class B-2 of Residential Accredit Loan Inc. mortgage pass-through certificates series 2001-QS17 has been downgraded from B to CCC by Fitch Ratings.In addition, Fitch affirmed the ratings on five other classes from the same RALI securitization. The downgrade was due to high delinquencies and losses, Fitch said. The rating agency can be found on the Web at http://www.fitchratings.com.