Servicing

The Mortgage Bankers Association is adding a Certified Mortgage Servicer program to its CampusMBA suite of industry training and educational programs.The program, which includes education and certification tracks in loan administration, financial controls/investor reporting, and default administration, was announced at the MBA National Mortgage Servicing Conference in Orlando, Fla. Dan Thoms, the MBA's vice president of education, told MortgageWire that the program will include a series of achievement and educational designations aimed at promoting professionalism in the mortgage servicing sector.

The chairperson of the Mortgage Bankers Association loan administration committee has called on loan servicers to expand their involvement in the industry association's efforts to influence public policy.Speaking to some of the 1,900 attendees at the MBA National Mortgage Servicing Conference in Orlando, Fla., J. K. Huey, senior vice president at IndyMac Bank, said the mortgage servicing business is constantly changing and lenders cannot afford to be complacent about evolving issues in the mortgage banking industry. "We should not be bystanders in this whirlwind of change. We need to get involved," she said, urging servicers to support both the MBA and MorPAC, a political action committee that promotes the industry's political causes. MBA leaders want MorPAC to raise $1.3 million during the coming two-year election cycle. In the last election cycle, it raised just over $1 million. The MBA can be found online at http://www.mortgagebankers.org.

Freddie Mac has announced that 23 single-family mortgage servicers achieved "Tier One" performance rankings for superior investor reporting and default management during two or more quarters last year.The company also inducted 12 servicers into its Tier One Hall of Fame for maintaining that status for four consecutive years. The announcement was made at the MBA National Mortgage Servicing Conference in Orlando, Fla. Each month, Freddie Mac ranks its servicers on a range of activities covering two primary performance benchmarks -- investor reporting and default management. Servicers that receive an overall top Tier One rating for at least two quarters in a year receive a number of benefits, including financial rewards and national recognition. Tier One Hall of Fame honorees for 2004 are Amcore Mortgage Inc.; Bank of America Consumer Real Estate; Chase Home Finance; Chevy Chase Bank FSB; Colonial Savings FA; Countrywide Home Loans; First Horizon Home Loan Corp.; HSBC Mortgage Corp. (USA); M&T Mortgage Corp.; National City Mortgage Co.; Sovereign Bank; and Wells Fargo Home Mortgage. The additional 2004 Tier One recipients are Bank of Oklahoma NA; Citimortgage; Doral Financial Corp.; First Federal Savings Bank; IndyMac Bank; PHH Mortgage; Provident Funding Associates; R&G Crown Bank; SunTrust Mortgage; U.S. Bank Home Mortgage; and Ulster Savings Bank.

Freddie Mac has started a new pilot program designed to make sure that affordable home loan customers who run into potential trouble have the opportunity to stay in their homes.The "affordable servicing" initiative, which is now in the first phase of a pilot program, is designed to increase the success of "delinquency intervention" when affordable home loan customers become seriously delinquent, according to Ingrid Beckles, a vice president at Freddie Mac and a speaker at this year's MBA National Servicing Conference in Orlando, Fla. Ms. Beckles told MortgageWire that the first phase of the pilot is designed to help borrowers that the loan servicer has been unable to contact. She said servicers are often unable to reach 40%-50% of troubled borrowers before the loan goes to foreclosure, in many cases because the borrower does not respond to attempts to reach him or her by phone or mail. That hinders efforts to offer help in the form of repayment plans, loan modifications, forbearance, short sales, or other foreclosure alternatives, Ms. Beckles noted. "They go straight down a road to foreclosure without realizing we are trying to help them," Ms. Beckles said. The pilot is testing ways lenders can increase the contact rate with seriously delinquent borrowers, she said. Freddie Mac can be found online at http://www.freddiemac.com.

Freddie Mac has announced the settlement of a $2.5 billion 6% Gold MACS Strip security with a weighted average coupon of 6.399% and a weighted average loan age of 13 months.The issue, designated FHS 228, settled Feb. 17. (The CUSIPs are 31282YDP1 for the interest-only portion and 3128HVDZ9 for the principal-only portion.) The transaction is lead-managed by UBS Investment Bank. Freddie Mac can be found on the Web at http://www.freddiemac.com.

Three subordinate certificates from Amresco Residential Securities Corp. Mortgage Loan Trust, series 1997-3, have been placed under review for possible downgrade by Moody's Investors Service.The affected certificates are classes M-2F, B-1F, and B-2F. The certificates are backed by 30-year fixed-rate and adjustable-rate home equity loans. The three most subordinate classes of the fixed-rate certificates have been placed on the watchlist because credit enhancement levels may not be sufficient to support the current ratings, Moody's said. "The B-2F certificates are almost completely written down, and future pipeline losses are still significant," the rating agency said.

LoanPerformance, a San Francisco-based provider of residential mortgage data and analytics, has announced the release of version 3.1 of its RiskModel forecasting tool for mortgage defaults, losses, prepayments, and delinquencies.RiskModel 3.1 features new statistical models for alternative-A and prime loans and delivers "dramatic improvement" in performance based on back-tests of over 4 million loans and over 1,700 securities, the company declared. Among the enhancements to the tool are: the addition of 12-month loan payment history as an optional input; the addition of a new payment shock variable for adjustable-rate mortgages; and explicit modeling of teaser rates and of the impact of housing price appreciation on prepayments. "Our goal is to predict the future rather than match or 'over-fit' the past," said Ralph DeFranco, the product manager of RiskModel. The company can be found online at http://www.loanperformance.com.

Class M-2 of Origen Financial Inc. manufactured housing contracts, series 2001-A, has been downgraded from CCC to C by Fitch Ratings.Fitch also affirmed the ratings on five other classes in the transaction. The downgrade was attributed to higher-than-expected losses and declining credit enhancement for the subordinate tranches. Overcollateralization was depleted in January 2004, and class B-1 has been absorbing collateral losses and is nearly fully written down, the rating agency said. "Once class B-1 is fully depleted, losses will be applied to class M-2," whose credit enhancement has dropped from 7.75% at closing to only 0.61%, Fitch said.

Class B-3 of Merit Securities Corp., series 11, has been downgraded from BBB to B by Fitch Ratings.Fitch also affirmed the ratings on four other classes in the deal. The downgrade reflects the poor performance of the collateral pool and higher-than-expected losses, the rating agency said. "A key to the poor performance of the collateral is the high percentage of manufactured housing loans remaining in the pool," Fitch said. "Manufactured housing loans typically experience a higher rate of default and higher loss severities on liquidated loans." The collateral consists of over 77% manufactured housing, 18% single-family detached units, and less than 1% planned unit developments, according to Fitch.

Twenty-four classes from 19 Oakwood Homes manufactured housing transactions have been downgraded by Fitch Ratings.In addition, the rating agency affirmed 40 other classes in the deals. Fitch attributed the downgrades to the poor performance of the manufactured housing pools. "High default or repo levels combined with elevated loss severities have typically exhausted once-available overcollateralization and, in many cases, have resulted in the significant or entire writedown of the most subordinate class of bond," Fitch said. "As a result, other junior and/or mezzanine classes are now threatened by, if not already experiencing, writedowns due to such losses." The rating agency can be found online at http://www.fitchratings.com.