Servicing

The national inventory of foreclosures increased by 2.6% in April, according to RealtyTrac, an online marketplace for foreclosure properties based in Lake Forest, Calif.The company's Monthly U.S. Foreclosure Market Report indicates that the latest foreclosure inventory totaled 64,057, compared with 62,422 in March. "April continues a trend we've seen over the last few months, where Texas and Florida have consistently produced an above-average number of properties in some stage of foreclosure," said Jim Saccacio, RealtyTrac's chief executive officer. Both states' foreclosure rates were more than 2.5 times the national average, the company said. The states with the next-highest foreclosure rates were Arizona, Colorado, and Utah. RealtyTrac can be found online at http://www.realtytrac.com.

Fitch Ratings is advocating the extension of the Terrorism Risk Insurance Act for two more years, arguing that market disruptions are likely if the backstop is not extended beyond its Dec. 31, 2005 expiration."There are no guaranties that availability of coverage will not be as serious a problem as it was before TRIA passed, which underscores the importance of a long-term solution," said Richard Carlson, a Fitch director. Mr. Carlson said he expects that, in the absence of the federal backstop, pricing could become an issue again and cause the price of the insurance to rise. This would especially affect high-profile "trophy" properties in major cities. And commercial mortgage servicers could have a more difficult time enforcing terrorism insurance coverage requirements, he said. The rating agency can be found online at http://www.fitchratings.com.

Two classes of Bear Stearns asset-backed securities, series 1999-1, have been downgraded by Fitch Ratings.Class BF of series 1999-1 group 1 was downgraded from BBB-minus to BB-minus, and class BV of series 1999-1 group 2 was downgraded from BBB-minus to BB. The downgrades were the result of poor collateral performance, incurred losses, and loss expectations in relation to available credit support, the rating agency said. Group 1 of the series is backed by fixed-rate mortgages originated by Amresco Residential Mortgage Corp. and Provident Funding Associates, and group 2 is backed by adjustable-rate mortgages originated by the same companies.

The senior unsecured ratings of General Motors, GMAC, and the majority of affiliated entities have been downgraded from BBB-minus to BB-plus by Fitch Ratings.The long-term and short-term ratings of GMAC, including GMAC Bank and GMAC Commercial Mortgage Bank, were lowered in connection with the downgrade of GM, which reflected a decline in its sales of sport utility vehicles and growing competition in the pickup truck market, the rating agency said. (The short-term ratings were lowered from F3 to B.) "The Rating Watch Evolving on GMAC Bank reflects its position within the newly created Residential Capital Corp. and GMAC's intention to ring-fence its residential mortgage business in order to achieve a higher rating," Fitch said. A Rating Watch Evolving outlook was also assigned to GMAC Commercial Mortgage Bank "in order to assess GMAC's intent to divest a partial stake in this business," the rating agency said. Fitch can be found online at http://www.fitchratings.com.

Impac Mortgage Holdings Inc., Newport Beach, Calif., has announced the issuance of $26.25 million of trust preferred securities by its newly formed statutory trust, Impac Capital Trust #3.The company said the securities will require quarterly distributions and bear a fixed interest rate of 8.01% for the first five years, and will reset quarterly thereafter at the prevailing three-month London interbank offered rate plus 3.75%. The company, a real estate investment trust, can be found online at http://www.impaccompanies.com.

Class B of Fidelity Funding Mortgage Finance Corp. has been downgraded from BBB to BB by Fitch Ratings.The rating agency attributed the downgrade to a credit enhancement level of 6.7% that is below the required percentage of 8.4%. In addition, 25% of the pool is 60 or more days delinquent (including loans in bankruptcy or foreclosure or that are real estate owned), Fitch said.

Two subordinate certificates issued by IndyMac ARM Trust, series 2001-H1, have been downgraded by Moody's Investors Service.Class B-2 was downgraded from A2 to Baa1, and class B-3 was downgraded from Ba2 to Ca. The underlying loans consist primarily of first-lien, hybrid adjustable-rate mortgage loans originated by IndyMacBank FSB, Moody's said. The downgrades were attributed to credit enhancement levels that are low in view of the projected losses on the underlying pools. Higher-than-expected losses have resulted in a complete writedown of the two most subordinate classes (B-5 and B-6), the rating agency said. Moody's can be found online at http://www.moodys.com.

Twelve classes of Structured Asset Securities Corp. residential mortgage-backed certificates have been downgraded by Fitch Ratings.The affected classes are part of eight SASCO transactions issued from 1998 to 2001. In addition, Fitch affirmed the ratings on 33 classes from the eight SASCO deals. The downgrades, affecting approximately $21.8 million of outstanding certificates, were attributed to "continuing high monthly pool losses, declining credit enhancement, and delinquency levels that pose imminent threat to certain of the more subordinates classes of certificates in these transactions." Fitch can be found online at http://www.fitchratings.com.

The Federal Home Loan Bank of Seattle has picked former thrift regulator James E. Gilleran to lead the troubled government-sponsored enterprise.Mr. Gilleran, who served as director of the Office of Thrift Supervision for four years, will start June 1. He left the OTS in late April. The Seattle bank has $260 million in unrealized losses on its balance sheet and anticipates that it could lose money over the next few years. It recently suspended all dividend payments on its stock and fired two directors whose depositories engaged in questionable FHLBank stock sales. Mr. Gilleran, though, is hopeful. "While the bank is facing significant challenges, it appears to be making good progress toward improving its regulatory and financial position," he said. Mr. Gilleran replaces interim president James Faulstich, who came out of retirement to help the Seattle bank devise a new capital and rescue plan. Mr. Faulstich replaced Norman Rice, a former Seattle mayor, who was ousted by the board earlier this year.

Trustreet Properties Inc., a real estate investment trust based in Orlando, Fla., has entered into a $175 million interest rate swap agreement with Bank of America NA, according to Trustreet.The swap agreement effectively converts Trustreet's five-year floating-rate debt under its senior credit facility into a fixed rate of 6.20%, the restaurant REIT said. Steve Shackelford, Trustreet's chief financial officer, said the company has "effectively locked in the cost of capital on a sizable portion of our debt in a historically low interest rate environment." The company can be found online at http://www.trustreet.com.