Servicing

Fannie Mae has announced that it will pass through mortgage-backed securities payoffs (involving 169 MBS pools) that were delayed due to a servicer's failure to report and remit payments to Fannie Mae.The principal payoffs, relating to 234 loans, will be reflected in Fannie Mae's January pool factors, and the government-sponsored enterprise said it will pass through the amount of the principal prepayments on Jan. 25, the next distribution date for the pools. Fannie Mae said some of the 169 MBS pools have been resecuritized into Mega transactions and real estate mortgage investment conduits. "With respect to all affected Fannie Mae REMIC transactions, we have determined that the payoff from the affected MBS pools will reduce the aggregate outstanding principal balance by less than 1%," Fannie Mae said. The same is true of most Mega deals, but Fannie said the payoffs will reduce the balance in 20 Mega transactions by 1% or more. Fannie Mae can be found online at http://www.fanniemae.com.

Mortgage lenders added 4,300 full-time employees to their payrolls in November, according to the December employment report released Jan. 7 by the U.S. Bureau of Labor Statistics.The BLS report shows that jobs in the mortgage banking/broker sector rose from 464,500 in October to 468,800 in November. (There is a one-month lag in BLS reporting of mortgage-sector employment data. The December data will not be released until Feb. 4.) Employment in the mortgage finance sector has been rising since August, and Friday's jobs report indicated that the hiring would continue in December. "Over the year, strength in the housing market continued to stimulate hiring in the [financial services] industry," the BLS said. "Credit intermediation added 9,000 jobs in December, bringing the total to 64,000 for all of the year." Meanwhile, the BLS report showed that the U.S. economy generated 157,000 new jobs in December, and the unemployment rate was unchanged at 5.4%. The BLS can be found online at http://stats.bls.gov.

Class B-1 of Lehman ABS manufactured housing contracts, series 2001-B, has been downgraded from BBB-minus to BB by Fitch Ratings.Fitch also affirmed the ratings on nine other classes in the deal. The downgrade was prompted by high losses and delinquencies and declining credit enhancement, the rating agency said. Fitch can be found on the Web at http://www.fitchratings.com.

Foreclosure.com, an online foreclosure listing service based in Boca Raton, Fla., says the number of foreclosure properties available for sale in the U.S. reached a 2004 peak in December.The company reported that 34,446 new foreclosed residential properties were listed for sale during December, and the total number of residential foreclosure properties available for sale rose to 83,573. Despite the spike in the foreclosure inventory near the end of 2004, Foreclosure.com president Greg Sullivan predicts that declining delinquency rates and strong economic indicators "will likely result in a dip in new foreclosure inventory during 2005." The company can be found online at http://www.foreclosure.com.

Home equity loan delinquencies increased to 2.82% in the third quarter of last year, up from 2.50% three months earlier, according to the American Bankers Association.While overdue payments rose on closed-end home equity loans held by banks, the delinquency rate for home equity lines of credit remained unchanged at 0.38%, according to the ABA's quarterly consumer delinquency bulletin. "Moreover, with mortgage refinancings hitting a four-year low, consumers' ability to consolidate debt at lower interest rates and take advantage of equity appreciation in their homes was severely limited," he said. The ABA can be found on the Web at http://www.aba.com.

Friedman, Billings, Ramsey Group Inc., Arlington, Va., has announced the formation of an institutional mortgage-backed securities trading business based on a team of MBS professionals from Freddie Mac.The team will be led by Michael Swell, formerly vice president and head of Freddie Mac's Securities Sales and Trading Group, and its trading operation will be led by Robert Cole, formerly head trader at Freddie's SS&TG. The new MBS team will be combined with FBR's asset-backed securities trading unit. "Having a meaningful ABS and MBS sales and trading effort is one of our key growth initiatives as a company and directly supports our increasing commitment to the mortgage- and asset-backed sectors of the capital markets," said Richard J. Hendrix, FBR's president and chief operating officer. FBR can be found online at http://www.fbr.com.

Mortgage-backed securities researchers and traders in New York have suggested that Ginnie Mae beef up its disclosures, loan products, and bond structures and give borrowers who warrant it a break on some mortgage insurance premium requirements, according to The Bond Market Association.Nadine Cancell, the association's vice president and assistant general counsel, told MortgageWire that these were the four areas that market participants agreed in recent discussions would both be cost-effective for Ginnie Mae and "have a big impact on the market." The association is among those that recently submitted suggestions to Ginnie in response to a recent request for comments that was aimed at determining "whether any existing requirements and procedures represent unnecessary hindrances to Ginnie Mae's business partners."

Fitch Ratings has assigned primary and special servicer ratings to Bayview Loan Servicing LLC for its servicing of small loans for commercial mortgage-backed securities.The ratings were as follows: primary servicer, CPS3-plus Small Loans; and special servicer, CSS3-plus Small Loans. Fitch said the primary servicer rating reflects Bayview's "experienced servicing management and staff, including asset managers, and its experience as a small-balance commercial mortgage loan servicer." The special servicer rating, the first assigned in Fitch's CMBS small-loan servicer rating program, is based on the company's ability to "work out, resolve, and dispose small-balance commercial mortgage loans and real-estate-owned properties," the rating agency said. Fitch rates commercial mortgage servicers on a scale of 1 to 4, with 1 being the highest rating.

Fitch Ratings has assigned CitiMortgage Inc., St. Louis, a residential primary servicer rating of RPS1 for alternative-A product.In addition, Fitch affirmed CitiMortgage's RPS1 rating for residential primary servicing and its RMS1-minus rating for residential master servicing. The primary servicer ratings are based on the company's "seasoned and tenured management team, superior technology platform, strong default management experience, and tightened risk management policies and procedures," Fitch said. The master servicer rating is based on CitiMortgage's "continued effective performance in managing its $8.8 billion master servicing portfolio as well as the numerous efficiencies and enhanced reporting capabilities completed over the last year," the rating agency said. The ratings also reflect the financial strength of CitiMortgage's parent, Citigroup, which is rated AA-plus by Fitch.

The residential servicer ratings of Ocwen Financial Corp. have been affirmed and removed from Rating Watch Negative by Fitch Ratings.The affected ratings are Ocwen's RPS2 residential primary servicer rating for subprime mortgages and its RSS2 residential special servicer rating. Fitch said the rating actions resulted from its determination that Ocwen has made changes to its servicing practices that were recommended in an April 2004 supervisory agreement with the Office of Thrift Supervision. The changes included the establishment of best practices, the creation of a consumer ombudsman, and the enhancement of consumer disclosures, Fitch reported. The rating agency noted that many class action lawsuits have been filed against Ocwen over the past 18 months alleging predatory and deceptive business practices, which Ocwen has denied. "Fitch takes these charges very seriously and is concerned about the types of issues that have been alleged by consumers and, as a result, will continue to closely monitor the company's legal situation in order to evaluate any potential impact on Ocwen's loan servicing and operational capabilities," the rating agency said. Fitch can be found online at http://www.fitchratings.com.