Servicing

The Federal Home Loan Banks' Mortgage Partnership Finance program funded $72.1 billion of loans last year, up 158% from the total of the year before.The FHLBank of Chicago, which coordinates the MPF program, also said that 707 FHLBank member financial institutions are approved to fund MPF loans, a gain of 62% from the end of 2002. Total MPF outstanding assets grew 108% last year to $86.7 billion. The Chicago FHLBank said the growth was primarily driven by conventional loans, reporting that the balance of conventional loans outstanding in the MPF program grew 153% during the year to $74.5 billion at year end.

Twelve classes of Greenpoint Credit Manufactured Housing Trust transactions have been downgraded by Fitch Ratings.The downgrades are as follows: in series 1999-5, classes M-1A and M-1B, from AA-plus to AA-minus, and class M-2, from A-plus to BBB; in series 2000-1, class A-3, from AAA to AA, classes A-4 and A-5, from AAA to A-plus, class M-1, from AA-minus to BBB-minus (and removed from Rating Watch Negative), and class M-2, from BB to CCC; and in series 2000-3, class IA from AAA to A-minus, class I M-1, from AA to BB-plus (and removed from Rating Watch Negative), class I M-2, from BBB to CCC, and class I B-1, from CCC to C. In addition, the ratings on six MH classes were affirmed. Fitch attributed the downgrades to poor collateral performance that caused losses to "significantly" exceed expectations. "Since exiting the MH [lending] business, Greenpoint has relied heavily on the wholesale channel and has recently seen recoveries of approximately 15%-20% for most transactions," Fitch said. "Like many manufactured housing servicers, Greenpoint relies heavily on modifications as a loss mitigation tool.... While Fitch believes modifications can help maintain cash flow on a low-recovery asset, Fitch expects the use of modifications to keep default rates higher than they would have been otherwise as the collateral seasons."

The Federal Agricultural Mortgage Corp., Washington, has reported net income of $25.1 million ($1.77 per share) for 2003, compared with $21.3 million ($2.08 per share) for 2002.For the fourth quarter, Farmer Mac's net income totaled $4.9 million ($0.40 per share), compared with $2.8 million ($0.23 per share) in the fourth quarter of 2002. Henry D. Edelman, Farmer Mac's president and chief executive officer, said 90-day delinquencies in the company's portfolio as of Dec. 31 were at their lowest levels in more than two years as a result of credit risk management efforts and increasing strength in the U.S. agricultural economy.

Saxon Capital Inc., a residential mortgage lender and servicer based in Glen Allen, Va., has announced that its board of directors has authorized the company to convert to a real estate investment trust.Saxon said it plans to carry out the conversion, which requires shareholder approval, through a series of mergers among newly formed Saxon entities. The company said it expects Saxon shareholders to receive one share of the REIT common stock, plus a cash consideration, for each share of Saxon common stock they own. Saxon can be found on the Web at http://www.saxoncapitalinc.com.

GMAC Mortgage Corp., Horsham, Pa., has announced a restructuring of its default management operations department into two units, one focusing on collections and loss litigation and the other on foreclosure/bankruptcy and real estate owned.Mitch Oringer has been promoted to vice president and will assume responsibility for collections and loss mitigation, the company said. Lionel Antunes, vice president of default operations, will continue to manage the foreclosure and bankruptcy operations. Bill Maguire, GMAC Mortgage's senior vice president of risk management for national loan administration, said the restructuring "will allow us to better manage and control our risk, at the same time that it strengthens our ability to serve investors and clients across our products and customer brands."

Countrywide Financial Corp., Calabasas, Calif., has reported consolidated net earnings of $2.37 billion ($12.47 per share) for 2003, up 182% from $841.8 million ($4.87 per share) in 2002.For the fourth quarter, earnings totaled $563.7 million ($2.74 per share), up 121% from $254.9 million ($1.45 per share) a year earlier. The results reflect a 4-for-3 stock split that took effect in December, Countrywide said. In the mortgage banking segment, loan volume totaled $434.86 billion for the year, up 73%, but fourth-quarter volume of $76.32 billion was down 25% from that of a year earlier, the company reported. "Most noteworthy was the 33% year-over-year fourth-quarter increase in purchase volume, which helped to mitigate the decline in refinance volume," said Angelo R. Mozilo, Countrywide's chairman and chief executive officer. "In addition, demand for less interest-rate-sensitive products continued to be robust, with fourth-quarter year-over-year production volume increasing 145% for adjustable-rate mortgages, 54% for home equity loans, and 109% for subprime fundings." Countrywide said its servicing portfolio stood at $645 billion at the end of the year, more than double its $285 billion level at the beginning of the refi boom in December 2000. The company can be found online at http://www.countrywide.com.

Loan purchases by Freddie Mac hit a 17-month low in December, reflecting the slowdown in originations in the primary market.However, the news isn't all bad. Purchase commitments rose for the second month in a row. Moreover, Freddie bought a record $826 billion in mortgages for the year, a 29% increase from the purchase level in 2002. In December the mortgage giant bought $44.2 billion in loans, compared with $44.5 billion the month before. In December 2002 it purchased $91.2 billion. At year end, its retained portfolio totaled $644 billion. In December its portfolio decreased at an annualized rate of 4.1%, but for the full year the growth rate was 13.6%. Over the past few weeks, Freddie Mac's stock price has risen steadily and is now close to its 52-week high. The government-sponsored enterprise can be found online at http://www.freddiemac.com.

First Republic Bank and its Trainer Wortham & Co. subsidiary have completed a $275 million collateralized bond obligation, the net proceeds of which have been used to purchase a securities portfolio that consists primarily of mortgage-related debt.The portfolio purchased consists mostly of residential and commercial mortgage-backed securities that have received investment grade ratings, First Republic reported. First Republic can be found on the Web at http://www.firstrepublic.com.

Three classes of Structured Asset Securities Corp. mortgage pass-through securities have been placed on Rating Watch Negative by Fitch Ratings.The affected classes are as follows: SASCO series 2002-10H, class B5; SASCO series 2002-22H, group 1, class B5-I; and SASCO series 2002-22H, group 2, class B5-II. Fitch also affirmed the ratings on 22 other classes in those series and two others. The Rating Watch placements were attributed to loss expectations and high delinquencies relative to the applicable credit support.

The rating on the B-2 class of Bombardier Capital Mortgage Securitization Corp.'s pass-through certificates series has been lowered from CCC-minus to D (default) by Standard & Poor's Ratings Services.The downgrade "reflects the nonpayment of full and timely interest, as well as the increased likelihood that investors in the class B-2 notes will not receive ultimate repayment of their original principal investments," the rating agency said. Liquidation-loss interest shortfalls were reported for the B-2 class on the October 2003 payment date. S&P said it expects interest shortfalls for the transaction to continue "given the adverse performance trends displayed by the underlying pool of manufactured housing installment sales contracts and mortgage loans...and the location of the B-2 writedown interest at the bottom of the transaction payment priorities (after distributions of senior principal)." S&P can be found online at http://www.standardandpoors.com.