Servicing

The inventory of foreclosed residential properties rose less than 1% in August, according to Foreclosure.com, an online foreclosure listing service based in Boca Raton, Fla.There were 22,733 new foreclosed residential properties listed in the United States in August, and such properties totaled 72,303 overall, the company reported. The data indicate that "new foreclosure activity has leveled off across the country, which is a strong indicator of the sustained strength of the real estate market," said Greg Sullivan, vice president and co-founder of Foreclosure.com. The data also show that the inventory of active properties "has remained relatively flat for the third straight month, indicating lenders have been successful in maintaining a balance of foreclosure sales against new foreclosure inventory," he said. The company can be found online at http://www.foreclosure.com.

Foreclosure.com, Boca Raton, Fla., has announced an agreement to provide listings data to Domania, a Boston-based operator of a consumer real estate website.Under the agreement, Domania (a unit of LendingTree Inc.) will private-label Foreclosure.com's national database of foreclosure listings. "Foreclosure.com offers the industry's most thorough and trustworthy foreclosed home property data, which will be a great benefit to Domania.com users who utilize online research to supplement their home buying and selling experiences," said Ben Joslin, Domania's general manager and vice president of marketing. The companies can be found online at http://www.foreclosure.com and http://www.domania.com.

Freddie Mac has announced a temporary relaxation in certain guidelines in an effort to expedite the release of insurance proceeds to borrowers in major disaster areas who have suffered property damage.The government-sponsored enterprise said mortgage servicers can immediately release insurance funds made payable jointly to an insured borrower and the servicer if the damaged property is in a declared Major Disaster Area related to Hurricane Charley, Hurricane Frances, or Tropical Storm Bonnie. The amount can equal $20,000, one-third of the amount of the insurance draft, 10% of the affected mortgage's unpaid balance, or the amount by which the released funds exceed the unpaid balance of the mortgage, whichever is highest. "This is a critical policy change that we believe will not only help families recover more quickly from this year's disastrous wave of hurricanes, but will also help our servicers to better cope with the extraordinary demands these storms are placing on their resources," said Freddie Mac senior vice president Mike May. The GSE can be found online at http://www.freddiemac.com.

Class B4 of CWMBS (Countrywide Home Loans) Inc. mortgage pass-through certificates, series 2003-41, has been placed on Rating Watch Negative by Fitch Ratings.The rating agency also affirmed the ratings on five other classes in the transaction. The Rating Watch placement stems from the fact that 0.93% of remaining loans have been delinquent for more than 90 days as of Aug. 25, whereas the credit enhancement for the class stood at only 0.27%.

Forty-five classes from 19 Oakwood Homes manufactured housing transactions have been downgraded by Fitch Ratings.In addition, the rating agency affirmed 31 classes from 15 Oakwood deals.Fitch attributed the downgrades to the deteriorating performance of the manufactured housing pools. After Oakwood filed for chapter 11 bankruptcy protection in November 2002, the company made changes to servicing practices that have caused volatility in performance, Fitch said. "Default rates and loss severities have been negatively affected since Oakwood ceased its loan assumption program and began relying solely upon wholesale channels for liquidation of repossessed homes," the rating agency said. After the sale of Oakwood's operations to Clayton Homes in April 2004, Clayton resumed its loan extension and loan assumption programs, but "portfolio losses have continued to erode credit enhancement levels within the transactions, most immediately threatening certain subordinate certificate classes," Fitch said.

The First American Corp., Santa Ana, Calif., and Matrix Bancorp Inc., Denver, have announced that First American has acquired a 75% stake in Matrix's subsidiary Matrix Asset Management in a transaction valued at approximately $15 million.The purchase price includes a combination of cash and notes. Matrix Asset offers disposition and default management services on foreclosed properties to mortgage bankers and other financial institutions. "The demand for outsourced default management services is growing rapidly as large and middle-tier mortgage lenders are increasingly looking to streamline their operations and have complex services managed by experts," said Parker S. Kennedy, president and chief executive officer of First American, which provides data to the mortgage industry, among others, as well as outsourced default services. First American can be found online at http://www.firstam.com.

Eleven classes from three GreenPoint Credit Manufactured Housing Trusts have been downgraded by Fitch Ratings.The downgrades were as follows: series 1999-5, classes M-1A and M-1B, from AA-minus to A-minus, and class M-2, from BBB to BB-minus; series 2000-1, class A-3, from AA to A, classes A-4 and A-5, from A-plus to BBB, class M-1, from BBB-minus to BB-minus, and class M-2, from CCC to C; and series 2000-3, class I A, from A-minus to BBB-minus, class I M-1, from BB-plus to B, and class I M-2, from CCC to CC. In addition, Fitch affirmed the ratings on six classes from four Greenpoint MH deals. The rating agency attributed the downgrades to greater-than-expected losses. The loans are serviced by GreenPoint Credit, a subsidiary of GreenPoint Financial Corp. GreenPoint exited the manufactured housing lending business in early 2002, but has continued to service its loan portfolio. Fitch can be found online at http://www.fitchratings.com.

Four classes of CS First Boston mortgage-backed securities, series 2001-2, have been downgraded by Fitch Ratings.The downgrades were as follows: classes B-3 and B-4, from BBB to BB; class B-5, from BB to B; and class B-6, from B to C. In addition, the ratings on three classes in the deal were affirmed. Fitch attributed the downgrades to realized and expected losses. The 0.15% original credit support provided by the unoffered class B-7 certificate has been depleted, the rating agency said.

Prepayment rates for Fannie Mae and Freddie Mac mortgage-backed securities recorded "very modest gains" in August despite the fact that mortgage rates were about 25 basis points lower than in the previous month, according to Bear Stearns.Analyst Dale Westhoff said the speed gains were generally less than 10%, with the bigger percentage increases concentrated in the 5.0%-6.0% coupons. "Above the 6.0% coupon prepayment increases were even more muted, with most increases less than 5%," Mr. Westhoff said. He said the speeds for the August reporting period were slightly below the Bear Stearns projections, and that "most of the incremental refinancing produced by the 50 basis point drop in 30-year mortgage rates in July and August to 5.80% is expected to flow through to the September numbers." Mr. Westhoff cited recent lows in the 10-year Treasury note yield, which he said "narrowly missed reaching our first key rate threshold" of 4.0%. A 10-year Treasury yield below 4.0% would correspond to a 5.60% mortgage rate, he said, and would expose the 5.5% coupon (35% of the mortgage market) to refinancing pressure. Bear Stearns can be found online at http://www.bearstearns.com.

Officials have proposed to delay implementation of controversial proposed accounting guidance for interest-rate-impaired securities, according to the webcast of a Financial Accounting Standards Board meeting held Sept. 8.A number of mortgage and bond market participants had been concerned about certain aspects of the guidance and said they saw the delay as a relatively favorable development. "We believe this is an appropriate interim result that is consistent with recommendations we and other financial industry organizations submitted … and think it will avoid unnecessary dislocations throughout the debt markets that might have resulted from more immediate application of these provisions," said The Bond Market Association in a statement released in conjunction with its affiliates, the Asset Managers Forum and the American Securitization Forum. The Financial Accounting Standards Board can be found online at http://www.fasb.org, and The Bond Market Association can be found at http://www.bondmarkets.com.