Servicing

Clayton Services, a Shelton, Conn.-based provider of loan and portfolio analysis, operations support, and consulting services, and the Murrayhill Co., a Denver-based securities surveillance and credit risk management business, have united under a newly formed holding company, Clayton Holdings.Frank Filipps, currently chairman and chief executive officer of Radian Guaranty, is slated to become the new chairman and CEO of Clayton Holdings upon his pending retirement from Radian. The private equity firm TA Associates is the controlling shareholder of both Clayton Services and Murrayhill and has invested $134 million of capital into Clayton Holdings, the company said. The new firm will leverage each company's technology, databases, and analytic and consulting capabilities to provide a spectrum of information-based services to support loan origination, securities issuance, securities monitoring, and loan servicing. Joining Mr. Filipps is Steve Lamando, founder and CEO of Clayton Services, who has been named president of Clayton Holdings and joins its board of directors. Sue Ellis, CEO and founder of Murrayhill, will move from her Murrayhill post to join the Clayton Holdings board of directors. Kevin Kanouff will continue as president of Murrayhill.

Fitch Ratings' recent actions on American International Group Inc. will not affect the ratings of state housing finance agency bonds partially supported by investment contracts of AIG Matching Fund Corp., according to the rating agency."The majority of the triple-A rated tax-exempt housing bonds that Fitch rates are part of large parity indentures, with the AIGMFC contracts only comprising a minimal portion of the investment portfolios, making the exposure to AIGMFC limited," said Vincent Barberio, a managing director at Fitch. "Further, AIG's current AA-plus rating still meets the requirements of Fitch's criteria for qualified investments." Fitch said it will continue to monitor the credit implications of the pending resolution of AIG's Rating Watch Negative for the tax-exempt housing bonds. The rating agency can be found online at http://www.fitchratings.com.

The overall volume of originations and loan securitizations will likely decline 30% this year in the prime jumbo mortgage sector, from $225 billion in 2004 to $160 billion, according to Standard & Poor's Ratings Services.The report, titled "Trends in U.S. Residential Mortgage Products: Jumbo Sector Fourth-Quarter 2004," says the reduction in the number of deals should be less than 30%, however, as a result of several factors. They include continued house price appreciation; the introduction of new mortgage products; efficiencies in deal execution; and a shift in origination and securitization from fixed-rate mortgages and hybrid adjustable-rate mortgages to ARMs with no initial fixed-rate period and IO mortgage product. "Over the past few years, many issuers have chosen to issue more deals backed by smaller, more homogeneous collateral pools," said Steve Tencer, a director in S&P's residential mortgage group, and co-author of the article. ".... We expect this form of issuance to gain momentum and continue the trend of smaller, more-targeted issuance patterns." The report is available on RatingsDirect, S&P's Web-based credit analysis system, at http://www.ratingsdirect.com.

Class B4 of Financial Asset Securitization Inc.'s mortgage pass-through certificates, series 1997-NAMC2, has been downgraded from CCC to CC by Fitch Ratings.In addition, Fitch affirmed the ratings on four other classes in the transaction. The rating agency attributed the downgrade to principal writedowns and the fact that more than 9% of the pool is over 90 days delinquent. Fitch can be found on the Web at http://www.fitchratings.com.

Sixteen certificates from six deals issued by Long Beach Mortgage Co. in 2000 and 2001 have been downgraded by Moody's Investors Service.The downgrades of asset backed certificates issued by Long Beach Home Mortgage Loan Trust were as follows: series 2000-1, class M-1, from Aa2 to A2; class M-2, from Baa3 to B1, and class M-3, from B2 to Caa2; series 2001-1, class M-1, from Aa2 to A1, class M-2, from Baa2 to Ba3, and class M-3, from B1 to Caa1; series 2001-2, class M-1, from Aa2 to A1, class M-2, from Baa2 to B1, and class M-3, from B2 to Ca; series 2001-3, class M-2, from Baa2 to Ba3, and class M-3, from B1 to Caa3; and series 2001-4, class M-3, from Ba3 to Caa1. In the sixth deal, issued by Asset Backed Securities Corp., Long Beach Home Equity Loan Trust 2000-LB1, class M1F was downgraded from Aa2 to A3, class M2F from Ba1 to B3, class BF from Ca to C, and class BV from Baa3 to B3. The downgrades were attributed to credit enhancement levels that may be low given the projected losses on the underlying pools, Moody's said. The deals are backed primarily by first-lien adjustable- and fixed-rate subprime mortgage loans originated by Long Beach.

LSI, a provider of property valuation and settlement services, has announced the introduction of a program that enables servicers to outsource the fulfillment of private mortgage insurance release requests.Under the Outsourced Private Mortgage Insurance Release Program, servicers can outsource the requests to an unaffiliated third-party provider, eliminating liability and increasing quality control of the process and documentation requirements, LSI said. (The federal Homeowners Protection Act requires lenders to cancel, or release, PMI automatically when loan-to-value ratios fall to 78% of the property's original value.) For servicers seeking intermediate levels of involvement in the PMI release process, the company is offering two additional versions of the program: insourced and hybrid. "The Insourced program will provide servicers with increased control over borrower interaction as compared to the Outsourced program," LSI said. "The Hybrid version combined elements of both the Outsourced and the Insourced programs." LSI is a division of Fidelity National Financial Inc., Jacksonville, Fla., which can be found online at http://www.fnf.com.

Prepayment rates for 30-year Fannie Mae and Freddie Mac mortgage-backed securities rose sharply in March, sending "a warning shot to mortgage investors," according to Bear Stearns & Co.Fannie Mae speeds rose from a constant prepayment rate of 18 CPR overall to 24 CPR in March in response to a rally in mortgage rates from 5.77% in February to 5.64%, as well as other factors such as a greater number of business days and a 14% increase in seasonal factors affecting turnover, said Bear Stearns analyst Dale Westhoff. Mr. Westhoff said the report is a warning shot to investors. "While relative coupon speeds are still well below levels observed in a typical refinance wave, the idea that somehow U.S. borrowers have become indifferent to new refinancing opportunities (a recent popular story) has been put to bed," he declared. "Borrowers viewed the rally and then sharp sell-off in mortgage rates in February as a last and best opportunity to lock in historically low rates." The Bear Stearns analyst said the "most striking" aspect of the report was "the uniformly strong prepayment response across coupons and vintages, particularly a reawakening of seasoned premium cohorts after several months of muted prepayments." Bear Stearns can be found online at http://www.bearstearns.com.

The Federal Home Loan Bank of Seattle, at year-end, had a $260 million "unrealized loss" on its balance sheet, according to company records.If the losses are realized at that amount, it would wipe out 13% of its $2 billion in capital, according to calculations by MortgageWire. A spokesman for the bank cautioned that the unrealized losses are just that, and could shrink or grow in size over time. The spokesman said the figure "is a snapshot at a point in time," reflecting a mismatch between the FHLBank's assets and liabilities. Meanwhile, the Seattle GSE reported a 42% drop in 2004 earnings, and has stopped purchasing mortgage loans under a restructuring plan that calls for a 25% reduction in staff. The Seattle bank warned that it "anticipates minimal to no dividends for its members" over the next few years and "may report net loss for some financial reporting periods." The troubled bank, which has been operating under a supervisory agreement since Dec. 10, filed a business/capital plan April 5 with its regulator, the Federal Housing Finance Board.

Residential Funding Corp., Minneapolis, has announced a redesign of its services website aimed at making it easier to find, analyze, and save data about the company's fixed-income securities.GMAC-RFC Vision offers various new features, including better navigation and search capabilities, access to expanded loan-level data downloads, and dynamic analytical capabilities that enable users to compare performance by shelf, vintage, deal, deal group, pool, and loan characteristic, the company said. "The analytics tool and data downloads in particular allow investors to either download collateral information or perform analysis online comparing many different attributes," said Julie Steinhagen, GMAC-RFC's managing director of capital markets investor relations. The enhanced website can be found online at http://www.gmacrfc.com/investors.

New foreclosed residential properties surged by 50% in March, according to Foreclosure.com, an online foreclosure listing service based in Boca Raton, Fla.Such foreclosures totaled 28,190 in the United States in March, and the nationwide inventory of foreclosed residential properties totaled 80,757, up 10% from that of February, the company reported. "Foreclosures are most prevalent in areas of the country where home values are not rising, such as Ohio, Texas, South Carolina, and Michigan," said Brad Geisen, president and chief executive officer of Foreclosure.com. "However, if the combination of rising interest rates and dropping home values continues, foreclosure inventory will likely continue to rise across the country." The company can be found online at http://www.foreclosure.com.