Servicing

Class B of Truman Capital Mortgage Loan Trust series 2002-1 has been downgraded from BBB to BB by Fitch Ratings.The downgrade was attributed to higher-than-expected losses that have reduced overcollateralization. The rating agency can be found online at http://www.fitchratings.com.

The Chicago Federal Home Loan Bank has reported a 4.3% drop in earnings for the second quarter, and the numbers indicate that its mortgage purchase business nearly dried up.The Chicago FHLBank, which developed the Mortgage Partnership Finance program, posted $94.2 million in earnings for the second quarter, compared with $98.5 million in the second quarter of 2003. The bank also reported that the growth of its $49.1 billion MPF portfolio slowed to an annual rate of 3.9% in the first half of the year, and it added only $500 million in single-family loans to its MPF portfolio in the second quarter. Under a supervisory agreement with its federal regulator, the Chicago bank must limit the growth of the portfolio to 10% a year. "Given the low origination volumes, the bank fully anticipates meeting its members' funding demands for MPF loans," the Chicago FHLBank said.

Fives classes of securities issued by E*Trade ABS CDO I Ltd. and E*Trade ABS CDO I LLC and supported in part by residential and commercial mortgage-backed securities have been placed on Rating Watch Negative by Fitch Ratings.The affected securities are as follows: class B third-priority secured floating-rate notes due 2037; classes C-1 and C-2 mezzanine secured floating-rate notes due 2037; $12.5 million of preference shares due 2037; and approximately $4.9 million of composite securities due 2037. The collateralized debt obligation is supported by RMBS, CMBS, CDOs, and asset-backed securities, Fitch said. The rating agency said a June 30 trustee report on the transaction indicates that 0.86% of the portfolio had defaulted. "The portfolio default and rating performance has increased the risk to the notes to a point where the risk may no longer be consistent with their respective ratings," Fitch said.

Four classes of Structured Asset Mortgage Investments mortgage pass-through certificates have been downgraded by Fitch Ratings, and one has been placed on Rating Watch Negative.The downgrades were as follows: series 1999-2 group 3, class 3-B4, from BB to B, and class 3-B5, from B to C; series 1999-4, class B3, from B to C; and series 2000-1 group 3, class III-B5, from BB to B. Class III-B4 of series 2000-1 group 3 was placed on Rating Watch Negative. In addition, Fitch upgraded five SAMI classes and affirmed the ratings on 20 others. The downgrades and Rating Watch placement were attributed to losses and loss expectations on "severely delinquent" loans in the pipeline, the rating agency said. Fitch can be found online at http://www.fitchratings.com.

Freddie Mac has announced the deadline for submitting stockholder proposals for inclusion in the proxy statement for its annual stockholders' meeting in November.To be considered for inclusion in the proxy statement, stockholder proposals must be submitted in writing to Freddie Mac and received by Aug. 27, the government-sponsored enterprise said. Submissions should be sent to Corporate Secretary, Freddie Mac, 8200 Jones Branch Drive MS 200, McLean, Va. 22102. Procedural requirements for submissions can be found on Freddie Mac's website.

Freddie Mac's mortgage portfolio grew at a 19.4% annual rate in June, compared with 4.6% in May, which means the giant mortgage company has reported two months of positive numbers after watching its portfolio shrink for several quarters.Freddie reported that loan purchases for its portfolio totaled $27.7 billion in June, up from $21.9 billion in May. The mortgage portfolio had total assets of $645.2 billion as of June 30. Fannie Mae also recently reported its monthly loan volume, which showed that its mortgage portfolio grew at an annualized rate of 19.0% in June, compared with a negative 2.8% rate in May. Fannie said loan purchases for its portfolio totaled $37.2 billion in June, compared with $26.7 billion in May. Fannie's mortgage portfolio had total assets of $891.2 billion at the end of June. The two government-sponsored enterprises can be found online at http://www.freddiemac.com and http://www.fanniemae.com.

Impac Mortgage Holdings Inc., Newport Beach, Calif., has announced that it will correct and restate its financial statements for 2001, 2002, and 2003, as well as unaudited statements for the first quarters of 2003 and 2004.The real estate investment trust said the corrections will change its revenue recognition policy regarding the sale of mortgage loans from its subsidiary Impac Funding Corp. to the parent company and the subsequent cash sale of the associated mortgage servicing rights. The mortgage REIT said it has previously recognized the cash gains in the period in which the MSRs were sold and the cash proceeds were received. Its new policy will amortize the gains over the life of the related loans retained by the REIT. "This correction does not constitute a writeoff of previous earnings, but is rather a timing difference, which results in a redistribution of cash gains over the life of the related mortgage loans (generally, on average, 2-3 years)," Impac said. The change affects net earnings under generally accepted accounting principles. The company's estimates of the amount of net earnings that will be redistributed are: $7.3 million for 2001; $14.3 million for 2002; $14.2 million for 2003; $4.3 million for the first quarter of 2003; and $12.1 million for the first quarter of 2004. Impac can be found online at http://www.impaccompanies.com.

In an effort to revamp its cost structure, Washington Mutual has announced that it will eliminate an additional 2,500 mortgage-related positions from its workforce by the end of the year.That will bring WaMu's total job cuts in 2004 to approximately 8,500 positions, including cuts that have already been made or announced by the company. WaMu said it will close about 100 retail lending and loan processing offices in 17 markets where it does not have a retail banking footprint, though it will maintain wholesale and correspondent lending relationships in those markets. WaMu also said it is closing its loan servicing facility in San Antonio in a move that will account for 660 of the job cuts. Separately, the company announced that Craig Chapman, president of Washington Mutual Commercial Group, will now head the company's mortgage unit. His previous duties as chief administrative officer for WaMu will be dispersed to other executives, chairman and chief executive officer Kerry Killinger said during the company's July 22 quarterly earnings conference call.

Class B-1 of Metropolitan Mortgage series 2000-B has been downgraded from BB to B by Fitch Ratings.In addition, Fitch affirmed the ratings on four other classes in the deal. The rating agency attributed the downgrade to "significantly" increased losses that have depleted the overcollateralization.

Three classes of Saxon Asset Securities Trust issues have been downgraded by Fitch Ratings.The downgrades were as follows: class BF-1, series 2000-1 group 1, from BBB to BB; class BF-1, series 2000-4 group 1, from BBB to BB and removed from Rating Watch Negative; and class BF-1, series 2001-1 group 1, from B to CCC. In addition, Fitch affirmed the ratings on 21 classes from several deals. The downgrades were attributed to loss levels and high delinquencies in relation to the applicable credit support. Fitch can be found online at http://www.fitchratings.com.