Servicing

Ratings on the B-1 classes of Oakwood Mortgage Investors Inc. pass-through certificates series 1998-A and four series of OMI Trust, as well as the rating on class M-2 of OMI Trust 2000-D, have been lowered by Standard & Poor's Ratings Services.The B-1 classes of OMI Trust 2000-C, OMI Trust 2001-D, and OMI Trust 2001-E were downgraded from CC to D, and class B-1 of OMI Trust 2000-A was downgraded from CCC-minus to CC, S&P said. Class M-2 of OMI Trust 2000-D was downgraded from CC to D. "The lowered ratings reflect the unlikelihood that investors will receive timely interest and the ultimate repayment of their original principal investments," the rating agency said. All the downgraded classes except class B-1 of OMI Trust 2000-A recently reported liquidation-loss interest shortfalls, S&P said. The rating agency said high losses in the past year have reduced the overcollateralization ratios for all six transactions to zero, resulting in principal writedowns.

The ratings on 68 classes from 18 Oakwood Mortgage Investors Inc. and OMI Trust manufactured housing transactions have been placed on CreditWatch with negative implications by Standard & Poor's.The rating agency attributed the CreditWatch placements to adverse performance by the underlying collateral pools of manufactured housing loans, and the resulting deterioration in credit enhancement, since S&P's last rating actions in mid-2003. "In addition, the unfavorable market conditions that continue to plague the manufactured housing market have contributed to the adverse performance of these transactions," S&P said. Oakwood announced in November 2002 that it was filing for Chapter 11 bankruptcy protection. S&P can be found online at http://www.standardandpoors.com.

Irwin Mortgage Corp., Indianapolis, has agreed to sell $5 billion to $7 billion in "flow" servicing to an undisclosed buyer in a deal brokered by Cohane Rafferty Securities Inc.The servicing rights -- which will be delivered to the buyer in future months -- will consist of Fannie Mae and Freddie Mac product. Cohane broker Tom Donatacci described the product as "very vanilla." Mr. Donatacci said he believes the bulk servicing market will begin to pick up steam soon "unless rates really slide." Based in White Plans, N.Y., CRSI is a subsidiary of Lehman Brothers, which owns stakes in a handful of mortgage banking firms. (See the Jan. 19 issue of National Mortgage News for news on other servicing-related deals.)

The ratings on over 180 classes in 45 Conseco Finance Corp. and Conseco-related manufactured housing deals have been placed on CreditWatch with negative implications by Standard & Poor's Ratings Services.The actions stem from "continued poor performance" by the underlying pools of manufactured housing contracts and the resulting decline in credit enhancement since S&P's last rating actions in mid-2003, the rating agency said. "Series included in more recent vintages have displayed greater signs of stress relative to series issued in earlier vintages," S&P said. Conseco exited the manufactured home financing business and suspended its loan assumption program in November 2002. The latter resulted in higher repossessions, and the exit from MH lending has limited Conseco's ability to liquidate repossessed units through retail channels, causing it to be more reliant on wholesale channels, S&P said. "In conjunction with the depressed repossession resale market, these factors have resulted in the further weakening of recovery rates associated with these transactions," the rating agency said. S&P said it expects to complete a detailed review of the transactions in the next two months to determine whether any rating changes are necessary. S&P can be found online at http://www.standardandpoors.com.

Countrywide Financial Corp., Calabasas, Calif., has announced that it will become one of the first companies to receive dual listings on the New York Stock Exchange and the NASDAQ Stock Market."We believe dual listing will encourage competition between the two markets and their respective trading systems, and that this can ultimately benefit shareholders," said Angelo R. Mozilo, Countrywide's chairman and chief executive officer. Other companies participating in the dual-listing program are: Hewlett Packard, Charles Schwab, Walgreens, Apache Oil, and Cadence.

Freddie Mac has introduced a new quarterly report on its debt funding activity that indicates the company issued $221.2 billion of debt instruments in the fourth quarter.Louise Herrle, Freddie Mac's treasurer, vice president, and head of global debt funding, said the new report was instituted because the issuance of liquid securities "through transparent and predictable funding" is key to helping the company fulfill its mission of expanding homeownership. The company's fourth-quarter debt issues consisted of $136 billion in Reference Bills and Discount Notes, $69.2 million in medium-term notes, and $16 billion in Reference Notes, according to the Freddie Mac Quarterly Funding Announcement & Summary. The report said Freddie Mac plans to offer $17 billion to $22 billion in Reference Notes in the first quarter, and $6 billion to $10 billion of syndicated callable notes, among other debt issues. Freddie Mac can be found online at http://www.freddiemac.com.

Standard & Poor's Ratings Services has announced that it will rate structured finance transactions that include South Carolina loans governed by the state's predatory lending law, which took effect Jan. 1.S&P said the South Carolina High-Cost and Consumer Home Loans Act bars certain practices in connection with what it defines as "consumer home loans" and "high-cost home loans." Violations could result in liability for the originators of such loans, but the act does not explicitly impose liability on purchasers or assignees of either type of loan, S&P said. However, if a court finds that such a loan violated the act at the time it was made, the court may refuse to enforce the loan or part of the loan, rewrite or modify the loan, or award monetary damages, S&P said. For deals that include South Carolina loans, S&P will require the issuer to warrant that the loans comply with all applicable laws, and that its compliance procedures can effectively identify consumer home loans and high-cost home loans and determine that they don't violate the aforementioned act. S&P can be found online at http://www.standardandpoors.com.

Mortgage lenders reduced their payrolls by 7,500 full-time employees in November, reflecting the sharp dropoff in refinancings that started in September.The Bureau of Labor Statistics data released Friday show that employment in the mortgage banker/broker sector fell from 417,100 in October to 409,600 in November. The mortgage sector has been shedding jobs for three consecutive months. Meanwhile, the December jobs report disappointed many who expected to see a real boost in hiring. The BLS reported that only 1,000 new jobs were created in December, but the unemployment rate fell to 5.7%. (The December employment report provided mortgage sector employment data for November only. The BLS instituted this one-month lag when it revamped its jobs report in May.) The BLS can be found online at http://stats.bls.gov.

Nomura Securities International Inc. has appointed Don MacKinnon head of structured credit trading and asset finance, a new position at the company that includes responsibility for its residential and commercial mortgage-backed securities businesses.Mr. MacKinnon was previously president and chief executive officer of Real Business Solutions, a commercial real estate services and technology company. In addition to overseeing RMBS and CMBS, Mr. MacKinnon will be responsible for managing the firm's asset finance business. Mr. MacKinnon has a mandate to expand the company's U.S. operations in all three businesses.

Prepayment rates of Fannie Mae and Freddie Mac mortgage-backed securities were mixed in the December reporting period, and changes were generally small on a percentage basis, according to the Bear Stearns Prepayment CommentaryAnalysts Dale Westhoff and Bruce Kramer said nearly all changes were under 10% in 30-year coupons of 6.5% and above. "The most interesting results were in the cusp coupons (5.0% and 5.5%), where several trends in the current housing market converged to bring the only notable surprises in the December report," the analysts said. "The [Fannie Mae] 5.5%/2003 cohort, which is by far the largest single piece of the coupon stack at $268 billion outstanding, rose from 8.8 CPR in November to 10.6 CPR in December." The analysts said conventional speeds overall "remain slightly higher" than expected for several reasons, including record housing turnover and high levels of refinanced loans in pools. Bear Stearns can be found online at http://www.bearstearns.com.