Servicing

Class B-2 of Ocwen Residential MBS Corp., series 1998-3, has been downgraded from BB to CCC by Fitch Ratings.Fitch also removed the rating on class B-1 in the same deal from Rating Watch Negative and affirmed that rating and those of two others in the transaction. The downgrade was attributed to loss levels and high delinquencies in relation to the applicable credit support.

Class B of Option One MESA Trust asset-backed certificates, series 2001-2, has been downgraded from BB to B-plus by Fitch Ratings and removed from Rating Watch Negative.Fitch also affirmed the ratings on classes A and M of the transaction and removed class M from Rating Watch Negative. The downgrade was attributed to the poor performance of the underlying collateral. "The amount of available excess interest has not sufficiently covered the greater-than-expected level of losses incurred, resulting in a depletion of overcollateralization," the rating agency said.

CoreStar Financial Group, Timonium, Md., has announced a $4 million investment in the company by Edison Venture Fund that CoreStar says will be used to expand its marketing and sales programs.The company, which specializes in consumer debt consolidation through mortgage refinance transactions, said it expects the marketing and sales expansion to enable it to "more than double" its production within a year. Bruce Luehrs, a general partner at Edison, said the experience of CoreStar's executives in the mortgage industry from both a consumer and a market perspective "set this company apart." Mr. Luehrs and Ross Longfield, a former chief executive officer of Beneficial National Bank USA, have joined CoreStar's board of directors, the company reported. WWC Capital Group, Reston, Va., was the exclusive placement agent for CoreStar in connection with the transaction. The companies can be found on the Web at http://www.corestar.com and http://www.edisonventure.com.

Barclays Capital has made two more appointments to its new mortgage-backed securities trading desk operation.Chris Leslie, who previously worked in MBS sales at Citigroup, has been named managing director responsible for MBS sales in the United States at Barclays, and Steve Cozine, who was head of non-agency collateralized mortgage obligations at Citigroup, has been named director and senior mortgage CMO trader and structurer. Barclays Capital can be found online at http://www.barcap.com.

A $650 million private placement of debt securities by Berkshire Hathaway Finance Corp. that will be used in part to finance a mortgage subsidiary of Clayton Homes Inc. (a Berkshire Hathaway company) has been rated triple-A by Standard & Poor's Ratings Services.The medium-term notes will be issued with three- and 10-year maturities. S&P said the net proceeds of the issuance are expected to be used to fund the finance operations of Vanderbilt Mortgage and Finance Inc., a wholly owned subsidiary of Clayton Homes, a manufactured housing company acquired by Berkshire Hathaway in 2003. S&P can be found online at http://www.standardandpoors.com.

Two classes of notes issued by Ingress I Ltd., a collateralized debt obligation backed by real-estate-related assets, have been downgraded by Fitch Ratings.The downgrades were as follows: class B, from A-plus to A-minus, and class C, from BB-minus to B-minus. In addition, Fitch affirmed the ratings on two classes in the CDO. The deal is supported by a static pool of asset-backed securities, residential mortgage-backed securities, commercial MBS, and real estate investment trusts. The rating agency attributed the downgrades to declining overcollateralization ratios since April 2003.

Four classes in three CWMBS (Countrywide Home Loans Inc.) mortgage pass-through deals have been downgraded by Fitch Ratings, and one other class was placed on Rating Watch Negative.The downgrades were as follows: series 1998-12 (Alt 1998-4), class B4, from B to CCC and removed from Rating Watch Negative; series 2001-26 (Alt 2001-11), class B4, from B to CCC and removed from Rating Watch Negative; and series 2002-11 (Alt 2002-7), class B3, from BB to B, and class B4, from B to CC. Class B4 of series 1999-6 (Alt 1999-1) was placed on Rating Watch Negative. In addition, four classes were upgraded and the ratings on 15 classes in four transactions were affirmed. The rating agency said the downgrades and Rating Watch action stemmed from actual and expected losses relative to the applicable credit support. Fitch can be found online at http://www.fitchratings.com.

C-BASS has completed a real estate mortgage investment conduit deal backed by approximately $395 million of residential mortgages.The REMIC -- C-BASS mortgage loan asset-backed certificates, series 2004-CB4 -- consists of about $377 million of publicly offered certificates underwritten by J.P. Morgan, Citigroup, and Blaylock & Partners LP, C-BASS reported. The servicer on the deal is Litton Loan Servicing LP, a C-BASS subsidiary. C-BASS can be found online at http://www.c-bass.com.

Bond and securitization trade groups that represent mortgage-related securities market participants, among others, are voicing concerns about the Securities and Exchange Commission's proposed rules for asset-backed securities.The Bond Market Association said that among its concerns are "the risk that shelf registration statements may no longer be available, far-reaching and inflexible static pool disclosure requirements" and "inappropriate regulations covering repackaging transactions." The association's affiliate, the American Securitization Forum, also has concerns about the proposed rules and has detailed them in a 130-page comment letter to the SEC. The forum can be found online at http://www.americansecuritization.com, and the association can be found at http://www.bondmarkets.com.

Lenders are increasingly willing to fight back against fraud, whether committed by consumers, loan officers, or other parties to a mortgage transaction, according to a moderator at the Western Secondary Market Conference in San Francisco."I think that the perception [of fraud] is changing," said Lawrence C. Ward of CMG Mortgage in San Ramon, Calif., who moderated a July 9 panel on dealing with fraud. "Lenders are getting tired of just accepting fraud as being part of their business. Companies are getting tired of that -- there is too much money involved." Mr. Ward said there are now "all these wonderful systems" to discover fraud and identify the perpetrators, and he predicted that companies will put such systems in place. "Lenders are tired of saying fraud is part of the cost of doing business because, no, it is not," he said. "The same way bank robberies are considered criminal acts, lenders will not accept fraud, either." The 32nd Annual Western Secondary Market & Mortgage Banker Conference was sponsored by the California Mortgage Bankers Association.