Servicing

Ten classes in five CWMBS (IndyMac) 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 1999-E (RAST 1999-A5), class B4, placed on Rating Watch Negative, and class B5, from CCC to C; series 1999-I (RAST 1999-A9), class B4, from CCC to C, and class B5, from C to D; series 2000-A (RAST 2000-A1), class B3, from BBB to BB-minus and removed from Rating Watch Negative, class B4, from CCC to C, and class B5, from C to D; series 2000-C (RAST 2000-A3), class B3, from BBB to BB, and class B4, from CCC to C; and series 2000-G (RAST 2000-A7), class B3, from BB to B, and class B4, from CC to C. In addition, the ratings on 29 classes in eight transactions were affirmed. The rating agency said the actions stemmed from loss levels and high delinquencies relative to the applicable credit support. Fitch can be found online at http://www.fitchratings.com.

Prepayment rates for agency mortgage-backed securities slowed across the board in the January reporting period, producing "the flattest refinancing curve we have observed since early in 2001," according to the Bear Stearns Prepayment Commentary.Speeds of Fannie Mae MBS were "marginally slower in the massive 5.0% and 5.5% coupons," whereas coupons of 6.0% and higher recorded declines of 17%-20% (representing decreases in constant prepayment rates of 5-10 CPR), said Bear Stearns analysts Dale Westhoff and Bruce Kramer. "After today's report, we find all 6.0% issues now paying in the low to mid-20 CPR range and all higher coupons paying in the 35 to 45 CPR range," the analysts said. "Many of these issues are now more than 40 CPR below their peak levels from last summer." Noting the recent drop in mortgage rates, the Bear Stearns analysts predicted that speeds will rise in the February and March reporting periods, but that "we expect this mini-refinancing event to be short-lived and centered primarily in new 5.5% and 6.0% issues." Bear Stearns can be found online at http://www.bearstearns.com.

Mortgage lenders reduced their payrolls in December by 5,800 full-time employees, according to the latest government report.The Bureau of Labor Statistics data released Friday show that employment in the mortgage banker/broker sector fell from 444,700 in November to 438,900 in December. Lenders have been trimming their payrolls since September, when the demand for refinancings fell dramatically. Meanwhile, the BLS report shows that the economy created 112,000 jobs in January, and the December jobs creation number was revised upward from 1,000 to 16,000. The unemployment rate fell slightly, to 5.6%. (There is a one-month lag in the mortgage employment data due to changes made by the Labor Department last year in its employment report.) The BLS can be found online at http://stats.bls.gov.

Class B3 of CWMBS (Countrywide Home Loans Inc.) mortgage pass-through certificates series 2001-10 (ALT 2001-6) has been downgraded from B to CCC by Fitch Ratings.The rating agency also affirmed the ratings on four other classes in the transaction. Fitch attributed the downgrade to loss levels and high delinquencies relative to the applicable credit support.

Twenty classes from seven UCFC manufactured housing transactions have been downgraded by Fitch Ratings.Fitch also affirmed the ratings on 11 classes in seven deals. The downgrades reflect the poor performance of the loans, Fitch said. The rating agency noted that United Companies Financial Corp. exited the manufactured housing business in 1998 and filed for Chapter 11 bankruptcy protection in 1999. EMC Mortgage Corp. acquired the servicing rights for UCFC's manufactured housing portfolio in 2000. Fitch can be found online at http://www.fitchratings.com.

Fannie Mae has made changes to its website that it says makes its mortgage-backed security pool-level data easier for users to obtain.Users can now download monthly data of this type in a data file from part of the website labeled "Pool Data Direct," the government-sponsored enterprise said. This information "had previously been available to audiences in other formats and sources," including the portable document format in a section of the site labeled "PoolTalk," according to the GSE.

There is roughly a one-in-six chance of a general decline in home prices over the next two years, according to the PMI Risk Index, which rose 12 points in the fourth quarter.The average value of the index for the 50 largest metropolitan statistical areas stood at 174 at the end of the fourth quarter, said PMI Mortgage Insurance Co., the Walnut Creek, Calif.-based mortgage insurer that created the index. The index value means that these cities have on average a 17.4% probability of experiencing a home price decline in the next two years. PMI noted that San Jose, Calif., which topped the index with a 468, as well as Portland, Ore., with 353, and Charlotte, N.C., with 346, are higher-risk MSAs that experienced increases in their risk index average. They have suffered from higher-than-average unemployment rates and low or negative job creation rates, PMI said.

Catherine M. Dondzila has been named senior vice president of investments and capital markets accounting at Freddie Mac.The company said its Debt, Derivative & Fair Value Accounting, and Investment Accounting departments will report to Ms. Dondzila, who will report to Freddie Mac's chief financial officer, Martin F. Baumann. "[Ms. Dondzila's] experience in driving the application of appropriate accounting and related controls to mortgage securities and derivatives makes her ideal for this position," Mr. Baumann said. Ms. Dondzila was formerly assistant controller and senior managing director for the fixed-income and derivative proprietary sales and trading activities of Bear, Stearns & Co.

In the fourth quarter, 45% of the homeowners who refinanced their homes got a mortgage at least 5% larger than the original loan, up from 34% in the previous quarter, according to Freddie Mac.The percentage was also higher than the 40% level recorded a year earlier, the government-sponsored enterprise said in its quarterly refinance review. "The atmosphere around refinancing changed in the fourth quarter as mortgage rates started rising from the 45-year lows of the summer," said Amy Crews Cutts, Freddie Mac's deputy chief economist. "Since most of those who could refinance for lower rates have already done so, the later-year market became more attractive primarily to those who want or need to take equity out of their homes."

Nine classes of Deutsche Financial Capital manufactured housing transactions have been downgraded by Fitch Ratings.The downgrades were as follows: series 1997-I, class M, from AA to A-minus, and class B-1, from CCC to CC; and series 1998-I, classes A-2 through A-7, from AAA to AA-minus, and class M, from A-plus to BB-minus. In addition, the ratings on four classes of series 1997-I were affirmed. DFC was a joint venture of Deutsche Financial Services Corp. and Oakwood Acceptance Corp. Contracts included in the deals are serviced by OAC, a wholly owned subsidiary of Oakwood Homes Corp., which filed for Chapter 11 bankruptcy in 2002, Fitch said. The rating agency said Oakwood announced late last year that "substantially all" its assets would be acquired by Clayton Homes Inc.