Servicing

NovaStar Financial Inc.'s subsidiary NovaStar Mortgage has completed its second securitization of 2004, a deal with a face value of approximately $1.37 billion.Lead managers RBS Greenwich Capital and Wachovia Securities, along with co-managers Deutsche Bank Securities and Morgan Stanley, underwrote the transaction, NovaStar Mortgage Funding Trust, series 2004-2. NovaStar Mortgage can be found on the Web at http://www.novastarmortgage.com.

First Horizon Home Loans, Irving, Texas, has acquired the operations of The Equity Group Financial Inc., a mortgage banking company based in Livonia, Mich., for an undisclosed amount.Jay Bobel, EGF's president and founder, will become a senior vice president at First Horizon and will focus on recruiting more mortgage sales professionals, EGF reported. Licensed in Michigan and Ohio, EGF has grown from four associates to more than 100 over the past nine years, according to the company. It can be found online at http://www.egfloans.com.

The First American Corp., Santa Ana, Calif., has completed its acquisition of SNK Holdings Inc., a privately held provider of mortgage default services based in Northbrook, Ill., and its subsidiary operations for an undisclosed amount.First American said the acquisition -- including SNK's LOGS Financial Services -- has become First American National Default Outsourcing, which it termed "a growing component" of the company's Mortgage Information Services group. "The combination of default servicing operations, technology integration, process improvements, and other synergies will reduce First American National Default Outsourcing's annual operating expenses by $5 million within the first 12 months," First American said. "The acquisition will also strengthen First American's countercyclical revenue base, as the company will now service approximately 60% of the default outsourcing market." First American can be found online at http://www.firstam.com.

Four classes of Credit Suisse First Boston Mortgage Securities Corp. commercial mortgage pass-through certificates, series 2000-FL1, have been downgraded by Moody's Investors Service.The downgrades were as follows: class F, from Ba2 to B1; class G, floating-rate, from Ba3 to B3; class H, floating-rate, from B2 to Caa1; and class J, floating-rate, from B3 to Ca. In addition, the rating agency confirmed the ratings of three other classes in the deal. As of the May 17 distribution date, the transaction's aggregate certificate balance had decreased by approximately 63.4%, to $121.7 million, due to the payoff of 27 loans and realized losses of approximately $2.2 million, Moody's said. "Adverse selection has affected the credit quality of the pool, with four of the five remaining loans in special servicing," Moody's said. "Significant losses are anticipated on the San Tomas Loan, a $78.9 million pari passu loan." That loan, plus two others, are real estate owned. Moody's can be found online at http://www.moodys.com.

The Prestwick Mortgage Group, Alexandria, Va., is brokering the sale of servicing rights on a $140 million portfolio of Fannie Mae and Freddie Mac loans, all on properties in Michigan.The portfolio has a 5.570% weighted average note rate. The average loan balance is $105,495, and the weighted average seasoning is 25 months. The delinquency rate is 0.83%. Bids are due June 23.

Despite "record demand" for homes in Clark County, mortgage defaults may rise in the Las Vegas metropolitan area in the near future, according to Foreclosures.com, a distressed property investment advisory firm based in Fair Oaks, Calif.Foreclosures.com president Alexis McGee said the Las Vegas economy appears to be "very healthy," with 35,000 payroll jobs added in the past year and unemployment at 4.4%. But "the resulting hot housing market is pushing median prices out in front of incomes," she said. "The percentage of income going to housing costs is now at 39% and heading into dangerous territory." Foreclosures.com can be found on the Web at http://www.foreclosures.com.

The overall seasonally adjusted delinquency rate for home loans fell by 16 basis points to 4.33% in the first quarter, but new foreclosures have increased slightly, according to the Mortgage Bankers Association.The MBA's quarterly delinquency survey showed that, on a seasonally adjusted basis, loan performance improved in the first quarter in all categories except new foreclosures, which inched up to 0.46% from 0.45%. "With the ongoing strength of the economy during the first quarter of 2004, delinquency rates continued their fall from post-recession peaks in the second quarter of 2003," said Doug Duncan, the MBA's chief economist and senior vice president. "An expectation of strong job growth for the rest of the year and continued strength in the housing market bodes well for lower delinquency and foreclosure rates in the upcoming quarters." The MBA survey found that 2.26% of prime loans were 30 days or more late on repayment in the first quarter, down from 2.40% in the fourth quarter. The delinquency rate for loans backed by the Federal Housing Administration fell 55 bps, to 11.68%, and the rate for loans backed by the Department of Veterans Affairs fell 62 bps, to 7.37%. The MBA said 11.19% of the subprime loans in its conventional loan category were late in the first quarter, also down from the previous quarter's level. The MBA can be found online at http://www.mortgagebankers.org.

Genworth Financial Inc., a mortgage insurer based in Richmond, Va., has priced a $1.9 billion public offering of four series of senior debt securities.The series are as follows: $500 million of three-year notes with a floating interest rate based on the three-month London interbank offered rate; $500 million of five-year notes with a 4.75% interest rate; $600 million of 10-year notes with a 5.75% interest rate; and $300 million of 30-year notes with a 6.50% interest rate. Genworth said that as a result of hedging arrangements, its effective interest rates on the series will be 3.5315% on the three-year notes, 4.478% on the five-year notes, 5.510% on the 10-year notes, and 6.349% on the 30-year notes. Citigroup Global Markets Inc., Deutsche Bank Securities Inc., and Lehman Brothers Inc. are the joint book-running managers of the offering.

Loan Protector Insurance Services, Solon, Ohio, has announced the formation of a new department dedicated to researching, processing, and verifying insurance documents for escrowed and impounded mortgage loans serviced by the company.Loan Protector, an outsourcer of customized mortgage insurance tracking and verification programs, said the department is headed by nine full-time escrow specialists. "The escrow department's sole focus is on servicing and processing issues related to escrowed or impounded loans," said Ron Wiser, president of Loan Protector. "As we noticed more and more escrowed loans coming in to be processed, we realized that there was a need for a separate department with a single focus." The company can be found on the Web at http://www.loanprotector.com.

The sudden resignation of its president, Alex Pollock, is forcing the Chicago Federal Home Loan Bank to initiate a search for a successor."We are very early in the process," Chicago FHLBank board chairman Allen Koranda told MortgageWire. ".... There is no one lined up to fill the position right now." Mr. Koranda said he expects that there will be "a number of very well qualified candidates." The Wall Street Journal has reported that Mark Brickell is a candidate to succeed Mr. Pollock, who is leaving at the end of June to become a resident fellow at a Washington think tank. President Bush nominated Mr. Brickell to be the director of the Office of Federal Housing Enterprise Oversight, which supervises Fannie Mae and Freddie Mac, but later withdrew his nomination. The Chicago bank plans to make a management succession announcement on June 30, and it will essentially be an interim appointment, the chairman said. Mr. Koranda is the chief executive of Mid America Bank FSB, Clarendon Hills, Ill.