Servicing

Four mezzanine and subordinate certificates of the Madison Avenue Manufactured Housing Contract Trust 2002-A securitization have been downgraded by Moody's Investors Service.The downgrades were as follows: class M-1, from Aa2 to Baa3; class M-2, from A2 to Caa1; class B-1, from Baa2 to C; and class B-2, from Ba2 to C. The senior certificates are not affected because the ratings are based on an insurance policy issued by Ambac Assurance Corp., Moody's said. The rating agency attributed the downgrades to weaker-than-expected performance by the manufactured housing loans that make up the collateral pool and the resulting erosion in credit support. The loans were originated and are being serviced by GreenPoint Credit LLC. The rating agency can be found online at http://www.moodys.com.

Performance-related upgrades exceeded performance-related downgrades by 8-to-1 in the third quarter in the U.S. residential mortgage-backed securities market, according to Standard & Poor's Ratings Services.S&P said in a recent report that there were 228 performance-related upgrades and 28 performance-related downgrades in the U.S. RMBS market during the quarter. "The catalysts for the overwhelmingly positive rating activity continue to include the effect of extraordinarily fast principal prepayments (driven by mortgage loan interest rates that neared a 45-year low), seasoning of the underlying mortgage loans, the shifting interest features of the transactions, market value appreciation, moderate delinquencies, and low losses," S&P said. The rating agency can be found on the Web at http://www.standardandpoors.com.

Class B of First Union Home Equity Loan Series 1997-1 has been downgraded from BB-minus to B by Fitch Ratings.The rating action attributed the downgrade to the poor performance of the underlying collateral in the deal. Monthly losses have generally exceeded monthly excess spread, Fitch said.

Class M-2 of Metropolitan Mortgage series 2000-A has been downgraded from B-minus to CCC by Fitch Ratings.In addition, Fitch affirmed the ratings on two other classes in the deal. The rating agency attributed the downgrade to poor collateral performance and the deterioration of asset quality beyond original expectations.

Class BV of IndyMac ABS Inc. home equity series SPMD 2000-B, group 2, has been downgraded from BB to CCC by Fitch Ratings.In addition, the rating agency affirmed three other classes in the transaction. The downgrade was attributed to poor collateral performance and the deterioration of asset quality beyond original expectations. Fitch said the portfolio performance is suffering, in part, from adverse selection, citing the increase in manufactured housing collateral from 6.7% of the pool at closing to 20.2% as of September. "To date, MH loans have exhibited very high historical loss severities, causing Fitch to have concerns regarding the adequacy of enhancement in this deal, especially with regard to class BV," the rating agency said. Manufactured housing collateral has been responsible for 42.8% of total losses to date in the transaction, Fitch reported. The rating agency can be found online at http://www.fitchratings.com.

Washington Mutual Inc., Seattle, has reported earnings of $674 million ($0.76 per share) for the third quarter, down from $999 million ($1.09 per share) a year earlier, a decline it attributed partly to reduced mortgage refinancings.Net income for WaMu's mortgage banking segment totaled $271 million in the third quarter, up from $117 million a year earlier and from a loss of $63 million in the second quarter, the company said. Originations of home loans totaled $40.49 billion for the quarter, down from $111.95 billion a year earlier. However, WaMu touted the improved performance of its mortgage servicing rights, which rose $601 million from that of the second quarter "due to lower medium-term interest rates and a widening of the spread between mortgage rates and the rates on certain financial instruments the company uses to hedge the MSR risk." Loans held in portfolio rose by $11.62 billion from the second-quarter level due chiefly to "strong growth" in WaMu's home equity loans and lines of credit and short-term adjustable-rate mortgages, the company reported. WaMu can be found online at http://www.wamu.com.

Washington Mutual, Seattle, has hired J.P. Morgan Chase veteran Taj Bindra as its new executive vice president for finance and servicing operations of mortgage banking.Mr. Bindra, 42, was formerly chief financial officer and executive vice president for Chase Home Finance. He will be responsible for managing WaMu's mortgage servicing rights management, capital market activities, and servicing operations. He will be located in Seattle and report to Craig Chapman, president of WaMu's commercial and mortgage banking businesses. In his capacity as chief financial officer for the mortgage banking business, Mr. Bindra will also report to WaMu CFO Tom Casey.

Capital Title Group Inc., a title insurance underwriter based in Scottsdale, Ariz., and Charter One Bank, Cleveland, have announced an agreement whereby a CTG subsidiary will acquire the assets of Real Estate Appraisal Services Inc., a wholly owned subsidiary of the bank.The terms of the deal were not disclosed. CTG's subsidiary CTG Real Estate Information Services will acquire REAS, a provider of appraisal and flood determination services for residential and commercial property in five states. "The vertical integration of REAS's current services with the technological support of Nationwide Appraisal Services, a CTG REIS subsidiary headquartered near Pittsburgh, will produce effective cost-saving synergies," CTG said. The companies can be found online at http://www.capitaltitlegroup.com and http://www.charterone.com.

Few investment banking firms have been as bullish on Countrywide's stock as Sandler O'Neill. But those days are over.After reviewing Countrywide's third-quarter earnings statements, Sandler O'Neill analyst Mike McMahon reduced his rating on the stock to "hold" from "buy." Among his concerns, Mr. McMahon cited a larger-than-expected servicing impairment charge booked by the company. Even though Countrywide earned $582 million, it represented a 45% decline in earnings. It also revealed a $796 million servicing impairment charge that was offset, in part, by a $591 million hedging gain. Late Wednesday, Smith Barney slapped Countrywide with a "sell" rating. Countrywide's shares sold off in trading Wednesday, falling 11.5% on the day to $33. Its 52-week high is $39.93, its low, $23.00.

Wells Fargo & Co., San Francisco, has reported net income of $1.75 billion ($1.02 per share) in the third quarter, up 12% from $1.56 billion ($0.92 per share) a year earlier, despite a 58% decline in mortgage originations.Mortgage originations totaled $68 billion in the third quarter, down $28 billion from the level recorded in the previous quarter and down $93 billion from $161 billion in the third quarter of 2003, the company said. However, Mark Oman, group executive vice president for home and consumer finance, put the best face on the results. "The advantage of Wells Fargo's multichannel, anytime, anywhere sales approach is reflected in the growth of the home equity portfolio, which is up 43% from the prior year to $46 billion," Mr. Oman said. Noting the "unusually volatile" markets in the third quarter, Wells chief financial officer Howard Atkins said the company sold approximately $4 billion of securities and adjustable-rate mortgages, resulting in $10 million of bond gains and $35 million of loan losses. The owned servicing portfolio (including commercial servicing) totaled $777 billion as of Sept. 30, up from $681 billion a year earlier. The company can be found online at http://www.wellsfargo.com.