Servicing

Three classes of Conseco Home Equity 2000-B have been downgraded by Fitch Ratings.The downgrades were as follows: class MF-2, from A to BBB-minus; class BF-1, from BBB-plus to B and removed from Rating Watch Negative; and class BF-2, from BBB to CCC and removed from Rating Watch Negative. Fitch also affirmed the ratings on five other classes in the deal. The rating agency attributed the downgrades to high losses and high delinquencies relative to applicable credit support.

Applied Financial Technology, San Francisco, has entered into an agreement with McDash Analytics, Denver, that will provide McDash clients with AFT's short-term prepayment projections as well as housing turnover and refinancing scores.The strategic partnership combines scoring technology from AFT with McDash's database of nearly 20 million mortgages, about one half of the residential home loan market in the United States. Graham Williams, chief operating officer at AFT, told MortgageWire that the loan database will increase the "granularity" of AFT's scores and give McDash clients access to basic AFT prepayment scores and short-term prepayment projections. McDash provides prepayment and default management benchmarking services to the mortgage industry.

Prepayment rates for Fannie Mae mortgage-backed securities jumped during the April reporting period, especially among 2003 vintage 5.0% and 5.5% coupons, according to the Bear Stearns Prepayment Commentary.The constant prepayment rates of those coupons increased by over 50%, from 10.6 CPR and 24.4 CPR, respectively, in March to 16.0 CPR and 35.4 CPR in April, Bear Stearns analysts Dale Westhoff and Bruce Kramer reported. Speed-ups among higher coupons were "much more muted," they said, with 6.0s and 6.5s increasing by 15% and 5%, respectively. Speeds of 2003 and 2004 vintage Freddie Mac MBS were similar to or slightly below those of comparable Fannie Maes, which the Bear Stearns analysts said may stem from Freddie Mac's efforts to return its MBS speeds to market averages. "With minimal spillover effects expected from an origination pipeline with excess capacity, speeds across the entire coupon stack should reverse course in May as the effects of the 80-plus basis point selloff in mortgage rates since March begins to hit the numbers in May, June, and July," Mr. Westhoff and Mr. Kramer said. Bear Stearns can be found online at http://www.bearstearns.com.

Subprime servicer Fairbanks Capital Corp. has agreed to refund Florida homeowners $1.65 million for allegedly charging improper fees, according to state officials.The settlement agreement is the result of an extensive review of Fairbanks' records by state examiners. The $1.65 million does not come out of the $40 million pot that Fairbanks created as part of a settlement with the Federal Trade Commission last November. "It goes above and beyond" the Fairbanks/FTC settlement, said Bob Tedcastle of Florida's Office of Financial Regulation. Florida regulators alleged that the Salt Lake City servicing company charged unwarranted fees for appraisals and improper fees for releasing borrowers from mortgages that were paid off. They also alleged that Fairbanks improperly charged interest to cover advances the company paid for force-placed insurance, appraisals, and credit reports. A Fairbanks spokeswoman said the possibility of such settlements was disclosed last year.

Employment in the mortgage industry jumped 1.7% in March as low mortgage rates spurred refinancing and homebuying.The U.S. Bureau of Labor Statistics reported Friday that jobs in the mortgage banking/broker sector rose from 436,700 in February to 444,300 in March. The 7,600 jump in new hires came during a month when 30-year fixed mortgage rates dipped below 5.4%. The 30-year mortgage rate moved above 6.0% at the end of April, and the strong April jobs report is putting more pressure on rates. The BLS reported that the U.S. economy generated 288,000 new jobs in April and the unemployment rate fell to 5.6% from 5.7% in March. (There is a one-month lag in the BLS's reporting of mortgage-sector employment data. The April employment report released Friday only provided mortgage banking/broker data for March.) The BLS can be found online at http://stats.bls.gov.

American Residential Investment Trust Inc., San Diego, has completed its name change to AmNet Mortgage Inc.AmNet is the abbreviated name of its primary operating subsidiary, American Mortgage Network. In addition, the company announced that it plans to move from the American Stock Exchange, where it trades under the symbol INV, to the Nasdaq National Market System. The move is expected to take place in mid-June, at which time the company's ticker symbol will change to AMNT. John M. Robbins, chief executive of AmNet, said the company believes that listing on Nasdaq "will help us attract a broader range of investors through greater visibility." The company can be found on the Web at http://www.amerreit.com.

Yet another class action lawsuit has been filed in the U.S. District Court for the Western District of Missouri against NovaStar Financial Inc., Kansas City, Mo., on behalf of shareholders who bought stock between Nov. 3, 2003, and April 12, 2004.The complaint, which follows the filing of six similar lawsuits, alleges that NovaStar issued press releases and filed false financial reports with the Securities and Exchange Commission reporting alleged growth. The lawsuit also maintains that NovaStar did not disclose certain compliance issues, and that it artificially inflated its stock price because it was planning two follow-on equity offerings to raise capital. The SEC is conducting an informal inquiry into NovaStar's business practices, but the company has said it is confident that a full review of the facts should put the matter behind it. "All of these copycat complaints are virtually boilerplate -- Scotch-taped and pasted from newspaper articles," said Lanny Davis, outside counsel for NovaStar. "Why they're not embarrassed for filing a lawsuit -- rushing to the courthouse so fast with language that is virtually identical to one another -- is beyond me."

Freddie Mac controller Edmond Sannini, who is working on a project to re-engineer the mortgage giant's accounting systems, is leaving the company to take a position at Morgan Stanley, MortgageWire has learned.Mr. Sannini, who reports to chief financial officer Marty Baumann, is one of six controllers working for the company, a Freddie Mac spokesman said. The spokesman stressed that his departure will not affect the re-engineering project. Freddie Mac, which is still recovering from a $5 billion earnings restatement/accounting scandal, has yet to report earnings for 2003 but hopes to do so by midyear. The company has not yet given guidance on when it will report any results for this year. Before joining Freddie, Mr. Sannini worked as managing director and chief operating officer of J.P. Morgan Chase's global finance group. His official title at Freddie is senior vice president, corporate controller.

Royal Bank of Scotland has agreed to purchase Charter One Financial Inc., Cleveland, a top-30 residential servicer, for $10.5 billion.Charter One is also the nation's 40th-largest residential funder, according to figures compiled by MortgageWire and the Quarterly Data Report. After the deal is completed, RBS, which also owns Citizens Financial Group Inc., Providence, R.I., will rank among the 10 largest commercial banks in the United States. The deal adds $43 billion in assets, 616 retail branches, and 8,400 employees to RBS's growing U.S. banking empire. Together, Charter One and Citizens will boast assets of $128.8 billion and 1,400 branches. The transaction value of approximately $10.5 billion is based on a cash purchase price of $44.50 per share. Charter One's principal subsidiary, Charter One Bank, converted from a thrift charter to a national bank charter in 2002. Charles John Koch, Charter One's chairman and chief executive officer, said Citizens Financial "shares our operating philosophy, strategies, and customer focus. Our geographic footprints fit together perfectly." The companies can be found online at http://www.citizensbank.com and http://www.charterone.com.

In the first quarter, 43% of the homeowners who refinanced their homes got a mortgage at least 5% larger than the original loan, nearly unchanged from a revised 44% in the previous quarter, according to Freddie Mac.The percentage was slightly higher than the 41% level recorded a year earlier, the government-sponsored enterprise said in its quarterly refinance review. "With mortgage rates above the 46-year low of last June, the refinance volume is less than last summer's," said Frank Nothaft, Freddie Mac's chief economist. "The share of cash-out refis tends to rise when overall refinancing activity slows down because fewer borrowers find it economical to refinance their mortgages simply for a lower rate, but the cash-out alternative may be a very affordable option." Freddie Mac can be found online at http://www.freddiemac.com.