Servicing

Sunset Financial Resources Inc., a real estate investment trust based in Jacksonville, Fla., has reported the securitization of $219.4 million of residential mortgage loans.Sunset contributed the loans to J.P. Morgan Trust 2004-A3 and received a like amount of investment securities. "This securitization represents a significant milestone in the execution of our business plan," said Byron Boston, Sunset's chief investment officer. "To successfully convert our whole-loan purchases to mortgage-backed securities in the first full quarter of our operating history is a solid accomplishment." Sunset also reported the execution of an amendment to its $250 million senior secured credit agreement with J.P. Morgan that creates an $18.75 million sub-limit relating to commercial mortgage bridge loans that meet certain criteria. The REIT can be found on the Web at http://www.sunsetfinancial.net.

Thornburg Mortgage Inc., Santa Fe, N.M., has reported the establishment of a new, $5 billion asset-backed commercial paper facility.The company said the facility provides it with another way to finance its adjustable-rate mortgage securities portfolio. Thornburg Mortgage Capital Resources LLC, a special-purpose bankruptcy-remote entity created especially for the transaction, will act as the financing vehicle by issuing commercial paper in the form of secured liquidity notes, Thornburg said. Lehman Brothers Inc. is the structuring agent and lead dealer for the transaction. Thornburg can be found online at http://www.thornburg.com.

Fidelity National Financial Inc., Jacksonville, Fla., has acquired Geotrac Inc., a provider of flood determination and life-of-loan monitoring services, for an undisclosed price."Geotrac provides additional critical mass and improved scale to our flood information business, and its strength in the Midwest provides additional geographic coverage that augments our current market penetration," said William P. Foley II, FNF's chairman and chief executive officer. Mr. Foley said the addition of Geotrac's digitized flood plain maps will enable FNF to increase the percentage of automatic determinations and reduce manual exception processing. FNF can be found online at http://www.fnf.com.

Class B of Residential Asset Mortgage Products Inc. series 2001-RZ2, a deal secured by mortgage loans with high loan-to-value ratios, has been placed under review for possible downgrade by Moody's Investors Service.The rating agency also upgraded 12 certificates from four high-LTV RAMP deals issued in 2001. The series 2001-RZ2 transaction is backed by first-lien fixed-rate loans originated under the company's Home Solution Program, Moody's said. The class B certificate was placed on review for possible downgrade because credit enhancement levels "may be low given the current projected losses on the underlying pools," Moody's said. "The transaction has taken significant losses, and the B tranche has begun taking writedowns." Moody's can be found online at http://www.moodys.com.

Class B of a static-cash-flow collateralized debt obligation issued by REAB II Ltd. has been downgraded from AA-minus to A-minus and removed from Rating Watch Negative by Fitch Ratings, which cited the CDO's exposure to manufactured housing contracts issued by Conseco Finance Securitization Corp.The class was placed on Rating Watch Negative June 4 after an obligation in its portfolio, class A-4 of Conseco's manufactured housing contract senior/subordinate pass-through certificates, series 2000-6, was downgraded to A-minus, the rating agency said. Fitch said the Conseco MH has a short expected life and, "to the extent it matures," the rating on the class B notes will be "positively" affected.

The nation's fifth-largest servicer of subprime home loans, Fairbanks Capital Corp., Salt Lake City, has changed its name to Select Portfolio Servicing.Over the past 12 months, the company has overhauled its operations to implement industry-leading practices that set a new standard for customer responsiveness and managing risk, the company said in a statement about the new name. At the end of the first quarter, Fairbanks managed a $40.9 billion portfolio of home loans, according to the Quarterly Data Report, a MortgageWire affiliate. The company said it currently services approximately 350,000 nonprime residential mortgage loans.

Three classes of GE Capital home equity loan pass-through certificates have been downgraded by Fitch Ratings.The downgrades were as follows: series 1997-HE4, class B1, from BB to B; series 1999-HE1, class B2, from BB to CCC and removed from Rating Watch Negative; and series 1999-HE3, class B3, from B to CCC and removed from Rating Watch Negative. In addition, Fitch affirmed the ratings on 22 certificates from eight GE Capital HEL transactions. 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.

Moody's Investors Service has named Warren Kornfeld, a senior credit officer in the rating agency's residential mortgage-backed securities group, to be the new head of its mortgage servicer ratings.Mr. Kornfeld replaces Linda Stesney, who has been promoted to a position as co-head of the Moody's term asset-backed securities group. She is moving up because Michael Kanef, formerly co-head of term ABS, has been named group managing director for asset finance. Moody's can be found online at http://www.moodys.com.

Industry veteran Dale Kurland, a former managing director at Bear Stearns, has formed a new advisory firm, hoping to tap what could be a hot merger market for mortgage companies in the next few years."We anticipate a robust market for mergers, acquisitions, and overall consolidation in the mortgage business for the foreseeable future," said Ms. Kurland, who will serve as chief executive of her new firm, Classic Strategies Group LLC. The new company is based in New York. Prior to launching CSG, Ms. Kurland was a principal in DK Advisory Services. DKAS advised on several franchise-related deals, including the sale of First Town Mortgage, James Madison Mortgage, Knutson Mortgage, and others. In the early 1990s, Ms. Kurland was the head of mortgage banking M&A for Bear Stearns. CSG can be found online at http://www.classicsg.com.

The pricing of Freddie Mac participation certificates has "strengthened" and the company is optimistic that it can recapture most of its traditional share of the mortgage-backed securities market this year."Market share has improved significantly since 2003," chief operating officer Paul Peterson told investors during a conference call on the release of Freddie's 2003 earnings. "The current full-year outlook is expected to be just short of historical levels." In early 2003, Bank of America announced that it would no longer sell a majority of its loan production to Freddie Mac, which reduced its issuance of PCs. In addition, rapid prepayments on its PCs forced the secondary-market agency to step into the market and prop up the pricing of its newly issued PCs or mortgage-backed securities. As a result, Freddie's PC issuance declined relative to Fannie Mae's MBS issuance. This year, Mr. Peterson says he expects the PC portfolio to grow 7%-9%. "While continued progress will be challenging, we remain committed to returning market share to historical levels," the COO said. "We also remain focused on maintaining the performance of our MBS."