Servicing

Loan purchases by Fannie Mae fell to $55.57 billion in July, the mortgage giant's worst showing since February, according to figures released by the company.Compared to the same month a year ago loan purchases fell by 61%. However, Fannie's portfolio grew 2.1% (annualized) in July to $893 billion as rising rates slowed prepayment speeds. Fannie, like most participants in the mortgage market, is suffering from a slowdown in production -- in particular refinancings -- which limits the amount of mortgages it can purchase in the secondary market. However, the production slowdown is allowing the company to continue growth in its balance sheet. July marks the second month in a row that Fannie grew its portfolio. The previous eight months the GSE suffered portfolio declines.

Countrywide Home Loans, Calabasas, Calif., is now the largest subprime residential servicer in the nation, according to new rankings compiled by National Mortgage News.At the end of June Countrywide serviced $58.07 billion in subprime home mortgages, a 104% increase from the same period last year, according to exclusive rankings compiled for NMN's Quarterly Data Report. For several quarters Countrywide has been creeping up on Household Finance, Prospect Heights, Ill., and CitiFinancial, Baltimore, which have dominated the subprime servicing landscape for several years. At the end of June Household (which is owned by HSBC) ranked second among subprime servicers with $56 billion, followed by CitiFinancial ($54 billion). Countrywide, at the end of June, was the nation's largest overall servicer with $726 billion.

Deutsche Bank, whose U.S. headquarters are in New York, has agreed to acquire the mortgage origination and servicing assets of commercial lender Berkshire Mortgage Finance Limited Partnership, a subsidiary of The Berkshire Group, Boston.Berkshire Mortgage specializes in providing funding for multi-family properties using government-sponsored enterprise and government-insured products. It did $3.5 million in loan volume in 2003 and has a servicing portfolio of over $18 billion. Upon closing Berkshire Mortgage will become part of Deutsche Bank's global Real Estate Debt Markets group. Douglas Krupp, chairman of The Berkshire Group, said "our divestiture of Berkshire Mortgage is consistent with our long-term strategy of creating new businesses, growing those businesses to be market leaders and creating significant value for our equity holders." Berkshire Mortgage was formed in 1987. Its headquarters are, and will remain in, Boston. It also has platform offices in Bethesda, Md., and Irvine, Calif. Financial terms of the deal were not disclosed.

Two classes of CWMBS (IndyMac) Inc. mortgage pass-through certificates have been downgraded by Fitch Ratings.Class B3 of CWMBS (IndyMac) 2000-F (RAST 2000-A6) mortgage pass-through certificates was downgraded from CCC to C, and class B3 of CWMBS (IndyMac) 2000-G (RAST 2000-A7) mortgage pass-through certificates was downgraded from B to CCC. In addition, Fitch upgraded eight classes and affirmed the ratings on eight other classes from five CWMBS (IndyMac) deals. Fitch attributed the downgrades to loss levels and high delinquencies in relation to the applicable credit support.

Two classes of WMC Mortgage Loan pass-through certificates, series 1997-1, have been downgraded by Fitch Ratings.Class M-2 was downgraded from A-plus to A-minus, and class B was downgraded from BB to CCC. The rating agency also affirmed the ratings on 15 classes in five WMC residential mortgage-backed securitizations. The downgrades resulted from the poor performance of the underlying collateral, whose high level of losses has led to the depletion of overcollateralization, Fitch said. The rating agency can be found online at http://www.fitchratings.com.

Accredited Home Lenders Holding Co., San Diego, has announced the closing of a public offering of 3.4 million shares of 9.75% series A perpetual cumulative preferred shares by an indirect subsidiary, Accredited Mortgage Loan REIT Trust.The gross proceeds of the offering totaled $85 million, and the capital raised will be used "to allow Accredited, on a consolidated basis, to accelerate the growth of its portfolio and support the associated borrowings," Accredited Home Lenders said. (Accredited Mortgage, a real estate investment trust, had originally proposed to offer two million shares of the series A preferred shares, with a liquidation preference of $25 per share.) The lead managers of the offering were Bear, Stearns & Co., Friedman, Billings, Ramsey & Co., and Stifel, Nicolaus & Co. The underwriters have been granted an option to buy an up to 510,000 additional shares to cover any overallotments. Accredited can be found online at http://www.accredhome.com.

Cohen & Steers Inc., a New York-based equity portfolio manager that specializes in the stocks of real estate investment trusts and utilities, has priced an initial public offering of 7.5 million shares of common stock at $13 per share.The company said it would use the net proceeds of the offering to expand its investment capabilities, launch new products, and expand distribution, as well as for general corporate purposes. Merrill Lynch & Co. is the book-running manager of the offering. The underwriters have been granted an option to buy up to 1.125 million additional shares to cover any overallotments. Cohen & Steers can be found on the Web at http://www.cohenandsteers.com.

Five classes of notes issued by E*Trade ABS CDO I Ltd., as issuer, and E*Trade ABS CDO I LLC, as co-issuer, have been downgraded by Fitch Ratings and removed from Rating Watch Negative.The downgrades were as follows: class B third-priority senior secured floating-rate notes, from AA-plus to A-minus; class C-1 mezzanine secured floating-rate notes, from BBB to B-plus; class C-2 mezzanine secured fixed-rate notes, from BBB to B-plus; preference shares, from BBB-minus to CCC-minus; and composite securities, from BBB-minus to CCC-minus. Fitch also affirmed the ratings on two classes. The transaction, a static cash flow collateralized debt obligation, is supported by a diversified portfolio of asset-backed securities, residential mortgage-backed securities, commercial MBS, and CDOs. Fitch attributed the downgrades to a "deterioration in the credit quality of E*Trade I's collateral pool and the negative impact of its interest rate hedge." If expected recovery estimates on the securities are not realized, Fitch said it may take further action on the notes. Fitch can be found online at http://www.fitchratings.com.

Two classes of CWMBS (Countrywide Home Loans Inc.) mortgage pass-through certificates, series 1999-13 (Alt 1999-2), have been downgraded by Fitch Ratings and two others have been placed on Rating Watch Negative.The downgrades were as follows: class B3, from BB to CCC, and class B4, from B to C. The B4 classes of series 2001-21 (Alt 2001-10) and series 2002-13 (Alt 2002-8) were placed on Rating Watch Negative. The rating agency also upgraded 21 classes and affirmed the ratings on 11 other classes in six transactions. Fitch attributed the negative rating actions to loss levels and loss expectations relative to the applicable credit support.

Continued high issuance in the home equity sector in April caused a drop in the weighted average seasoning of Moody's Home Equity Index Composite, which tracks the aggregate performance of home equity loans backing securities rated by Moody's.The WAS dropped to 15.98 months, more than two months lower than the level in April 2003, according to the rating agency. The rate of serious delinquencies and chargeoffs as measured by the index also declined as a result of the addition of new pools, since these unseasoned pools have low delinquencies and no losses, Moody's said. Delinquencies and chargeoffs both decreased relative to those of March and on a year-over-year basis. The 60-day-plus delinquency rate for April fell to 6.66%, a 17% decrease from that of April 2003. The most dramatic decrease came in the foreclosure category, which fell 24% from that of a year earlier, the rating agency reported. After increasing in February and March, the chargeoff rate decreased to 1.22% in April, a nearly 14% decline from the level of a year earlier.