Servicing

The Enstar Group Inc., Montgomery, Ala., has reported a 15-day delay in the filing of its annual Form 10-K report, citing the timing of audited financial statements for Green Tree Investments, in which Enstar held an indirect interest until July 2004.Enstar said Green Tree -- the successor company to Conseco Finance Corp., which was the successor to manufactured housing lender Green Tree Financial Corp. -- changed accounting firms last year and the new auditors have not yet completed the audit of Green Tree's 2004 financial statements. Enstar said it will file its 2004 Form 10-K with the Securities and Exchange Commission "as soon as the predecessor Green Tree auditors are able to agree to the inclusion of their audit reports" for fiscal year 2003.

Troubled mortgage giant Fannie Mae said late Thursday that, once again, it could not report quarterly earnings in a timely manner, but also said its anticipated losses could be lower by about $1 billion.In a Form 12b-25 filing with the Securities and Exchange Commission, Fannie said its restatement in regard to hedge accounting (FAS 133) may be $8.4 billion, not $9 billion as previously thought. Its losses on certain "purchase and sell commitments" may be $2.4 billion, compared with an earlier estimate of $2.8 billion. Fannie, which has not reported earnings since the second quarter of 2004, is operating under a supervisory agreement with the Office of Federal Housing Enterprise Oversight. It is continuing an intense audit of its books and says it expects to restate earnings for the past three years. A new analyst report released by Smith Barney predicts that if interest rates rise, the company's anticipated losses "could shrink further in size."

Classes B and C of Structured Mortgage Trust 1997-1 have been placed under review for possible downgrade by Moody's Investors Service.The transaction is a resecuritization backed by other residential mortgage-backed securities. The rating actions were based on the weak performance of the underlying securities, whose losses have exceeded original expectations, Moody's said.

Three subordinate certificates from Amresco Residential Securities Corp. Mortgage Loan Trust series 1997-3 have been downgraded by Moody's Investors Service.The downgrades were as follows: class M-2F, from Baa1 to Ba1; class B-1F, from B2 to Caa3; and class B-2F, from Ca to C. The certificates are backed by 30-year fixed-rate and adjustable-rate home equity loans. The downgrades were due to credit enhancement levels that are insufficient to support the current ratings, Moody's said. "The B-2F certificates are almost completely written down, and future pipeline losses may cause the B-1F certificates to begin taking writedowns," the rating agency said.

The delinquency rate on single-family mortgages fell 18 basis points from the third quarter to 4.23% at the end of the fourth quarter, according to the Mortgage Bankers Association.The fourth-quarter delinquency rate was also down 26 bps from one year earlier. The MBA's National Delinquency Survey found improvement for all loan types. Foreclosure rates also declined in the fourth quarter. MBA chief economist Doug Duncan said strong economic growth and low interest rates allowed homeowners to improve their household finances in the last quarter of 2004. Continuing job growth and only modest increases in interest rates suggest that "moderate declines in delinquencies" will continue for the next few quarters, he said. The MBA can be found online at http://www.mortgagebankers.org.

Two subordinated tranches from Credit Suisse First Boston Mortgage Securities Corp. series 2002-10 have been placed under review for possible downgrade by Moody's Investors Service.The affected tranches are classes I-M-2 and I-B. Moody's said the bonds' credit enhancement levels, including excess spread, are low for the current rating level in view of projected losses.

Two certificates from CS First Boston Mortgage Securities Corp. series 1997-1R have been placed under review for possible downgrade by Moody's Investors Service.The affected certificates are classes 1-B3 and 1-B4. In addition, classes 1-M1, 1-M2, and 1-M3 were placed under review for possible upgrade. The transaction is a resecuritization backed by other residential mortgage-backed securities. Moody's said the negative rating action was based on the weak performance of the underlying security and reduced credit enhancement relative to projected losses.

Three certificates issued by MESA 2002-1 Global Issuance Co. have been placed under review for possible downgrade by Moody's Investors Service.The certificates, classes M-2, B-1, and B-2, are resecuritizations backed by other residential mortgage-backed securities. The rating action was based on the weak performance of the underlying securities and the reduced level of credit enhancement relative to the projected losses, Moody's said. The rating agency can be found online at http://www.moodys.com.

Origen Financial Inc., Southfield, Mich., has reported a net loss of $5.8 million ($0.23 per share) for the fourth quarter, compared with net income of $2.0 million ($0.13 per share) a year earlier.The real estate investment trust also reported a net loss of $1.8 million ($0.08 per share) for the year, far less than the $22.0 million loss recorded in 2003 by Origen and its predecessor, Dynex Financial. "We believe that our fourth-quarter loss is not indicative of ongoing results of operations, as we made significant charges to income relating to loans originated by our predecessor before our current origination platform was implemented in 2002," said Origen chief executive officer Ronald A. Klein. Origen, a manufactured home loan originator and servicer, can be found online at http://www.origenfinancial.com.

Flagstar Bancorp, Troy, Mich., has announced a $0.04 per share reduction in its fourth-quarter earnings to defer a gain from an interest rate hedging position it had terminated.The change will result in corresponding increases of approximately $0.02 per share in 2005 and 2006, the company said. Flagstar also reported an unrelated adjustment to its retained earnings to correct a cumulative overstatement of interest accrued on its $10.2 billion portfolio of mortgage loans. The latter adjustment will not affect the company's 2004 earnings or its 2005 earnings guidance, the company said. Flagstar can be found online at http://www.flagstar.com.