Servicing

Employment in the overall mortgage industry hit a record 489,400 full-time positions in January, but broker jobs appear to be slipping.According to figures compiled by the Bureau of Labor Statistics, the number of "real estate credit" employees reached a record 366,300, but "mortgage and non-mortgage broker" jobs came in at 123,100 positions, the lowest reading since September of last year. (Added together, real estate credit employees and mortgage and non-mortgage brokers account for total industry employment.) In 2004 mortgage lenders funded $2.7 trillion in loans, according to National Mortgage News, the industry's second-best year ever. Employment in the industry is expected to remain strong as long as mortgage rates do not rise significantly. However, in the refinancing market -- where loan brokers play a more prominent role -- applications are continuing to decline. Two years ago the mortgage industry employed 421,000 full-timers.

Hanover Capital Mortgage Holdings, Edison, N.J., has announced plans for a private placement of $20 million of trust preferred securities.The company said the securities will require quarterly distributions and bear a fixed interest rate of 8.55% for the first five years and will reset quarterly thereafter at the prevailing three-month London interbank offered rate plus 4.25%. Hanover Capital plans to use the net proceeds for general corporate purposes and to invest in subordinated mortgage-backed securities. The company, a mortgage real estate investment trust, can be found online at http://www.hanovercapitalholdings.com.

Six certificates from two Residential Asset Securities Corp. subprime deals issued in 2001 have been downgraded by Moody's Investors Service.The downgrades were as follows: series 2001-KS2, class M-I-1, from Aa2 to A2, class M-I-2, from A2 to Baa2, and class M-I-3, from Baa2 to Ba3; and series 2001-KS3, class M-I-1, from Aa2 to A2, class M-I-2, from A2 to Baa2, and class M-I-3, from Baa2 to Ba3. The downgrades were attributed to a belief that credit enhancement levels may be low given projected losses on the underlying pools. The transactions are backed by fixed-rate and adjustable-rate subprime mortgage loans originated by various originators. The master servicer is Residential Funding Corp.

Five certificates from three Residential Asset Mortgage Products Inc. Trust asset-backed securitization deals have been downgraded by Moody's Investors Service.The downgrades were as follows: series 2002-RS1, class M-I-3, from Baa2 to Ba3, and class M-II-3, from Baa2 to Ba3; series 2002-RS2, class M-I-3, from Ba2 to B3, and class M-II-3, from Ba3 to B3; and series 2002-RS3, class M-II-3, from Baa2 to Ba3. Moody's attributed the downgrades to credit enhancement levels that "may be low given the current projected losses on the underlying pools." The transactions consist of a fixed-rate pool and an adjustable-rate pool made up of mortgages that are not eligible for inclusion in Residential Funding Corp.'s specific loan program securitization. The mortgage loans were originated by different sellers and are serviced by HomeComings Financial Network Inc., a wholly owned subsidiary of RFC. Moody's can be found online at http://www.moodys.com.

Washington Mutual, Seattle, the nation's third-largest home lender, has confirmed that it's looking for a new mortgage chief.Industry sources told MortgageWire that the company has hired an executive recruiting firm to assist WaMu in its search. National Mortgage News broke the news about the thrift's search for a mortgage chief in its Feb. 21 issue. In the third quarter of last year, WaMu named Craig Chapman president of commercial and mortgage banking -- but the move was considered temporary. In a statement released late Monday night, WaMu said it wants Mr. Chapman "to focus exclusively on growing the company's commercial lines of business." The thrift also named three new senior leaders to its mortgage unit: John Berens, service delivery; Youyi Chen, portfolio management and research; and Bill Murray, division finance/servicing.

Mortgage fraud has been a significant factor in the "persistently high level" of foreclosure activity in the Chicago metropolitan area, according to Foreclosures.com, a distressed property investment advisory firm based in Fair Oaks, Calif.Filings to begin foreclosure proceedings in the Chicago area totaled 1,696 in December and 1,486 in January, down from over 2,500 in November but still high in view of strong demand for homes and a continuing economic recovery, the firm reported. Alexis McGee, president of Foreclosures.com, cited a report by Robert Kowalski, a Chicago FBI special agent supervisor, that mortgage fraud is "a growing trend" in the Chicago area. "Property flipping through inflated appraisals and phony loan documents leads to people winding up owing much more than their homes are worth," Ms. McGee said. "At the first sign of financial trouble, they just walk away, and the lender forecloses and takes a loss." Foreclosures.com can be found on the Web at http://www.foreclosures.com.

The Bond Market Association has formed a committee to advise Ginnie Mae on ways in which it can become more competitive in the mortgage marketplace while also improving the credit performance and investor interest in its mortgage-backed securities."The committee will continue the dialogue started late last year when the association responded to Ginnie Mae's request for suggestions on how it could improve its MBS and multiclass securities programs," said Rishi Chadda, vice president of MBS trading at Goldman Sachs & Co. and chairman of the new committee. "Our first priority is to identify ways for Ginnie Mae to improve disclosure and provide more information on the mortgages backing its pools of loans, as higher levels of disclosure will help investors feel more comfortable investing in its MBS program and in turn improve pricing and liquidity." The association can be found online at http://www.bondmarkets.com.

Royal Bank of Canada, Toronto, is looking to exit the U.S. mortgage market and has hired an investment banking firm to advise it on its options, industry sources have told MortgageWire.A spokeswoman for RBC in Toronto declined to comment. In the fourth quarter, RBC Mortgage originated $3.9 billion in residential loans, ranking 27th nationwide. It services about $4 billion in product. (See the Feb. 28 issue of National Mortgage News for more details.)

Aames Investment Corp., Los Angeles, has closed a securitization and related offering by Aames Mortgage Investment Trust 2005-1 of approximately $1.18 billion of notes backed by nonconforming mortgage loans.The securitization consists of 17 classes of certificates paying interest rates linked to the London interbank offered rate. The lead managers of the securitization were Bear, Stearns & Co. and RBS Greenwich Capital. Aames can be found online at http://www.aames.net.

Many servicers in the nonprime sector are taking a more active role in communicating with the borrower, according to Standard & Poor's Ratings Services.At a session on servicing nonprime loans during the MBA's recent National Mortgage Servicing Conference, panelists discussed the growing importance of making contact with borrowers, S&P reported. "We continue to take a close look at call center metrics, such as average speed to answer, abandonment, and hold and blockage rates, that measure the effectiveness of the customer service function," said S&P credit analyst Michael Gutierrez, head of the Servicer Evaluations group. New regulations have spurred some servicers to invest in call center technology as a way to monitor regulatory compliance, said credit analyst Richard Koch, a director in S&P's Servicer Evaluations group. "For instance, independent call monitoring groups, often physically situated away from the call center, vigorously monitor and grade employee performance," Mr. Koch said. Such practices can identify training issues as well as noncompliance with corporate policies and state and federal regulations, the rating agency said. S&P can be found online at http://www.standardandpoors.com.