Servicing

Banks and thrifts that are members of America's Community Bankers sold $33 billion in one- to four-family mortgages during the first nine months of this year through strategic alliances the trade group has set up with Fannie Mae, Freddie Mac, and private wholesalers.Since the first alliance with Fannie Mae was launched in May 2001, the ACB mortgage program has been a conduit for $55 billion in loans, according to ACB. "The mortgage programs couldn't have come along at a better time," said William Zuppe, a savings bank executive from Spokane, Wash. It has allowed ACB members -- especially the smaller members -- to participate in this "terrific boom in refis over the last couple of years," he said. Mr. Zuppe will become the ACB chairman Oct. 22 when the current chairman, Russell Taylor, hands him the gavel at ACB's annual convention in Las Vegas.

GMAC Mortgage Corp. has received an RPS1 rating from Fitch Ratings for servicing alternative-A, prime, subprime, high loan-to-value, and home equity loans and lines of credit.The rating is Fitch's highest for a servicer. In addition, Fitch upgraded GMAC Mortgage's special servicer rating to RPSS2-plus. Tony Renzi, executive vice president and head of national loan administration for GMAC, said the high ratings reflect the company's investment in its people, processes, and technology. GMAC Mortgage serviced $198 billion of loans at the end of last year.

Fannie Mae acquired a record $145.6 billion in mortgages during September, a reflection of the strong refinancing and home purchase market of the past summer.However, its retained purchase volume -- a barometer of future activity -- fell to $27.9 billion during the month, the second-lowest reading over the past 12 months. Compared with those of the same month a year ago, Fannie's loan acquisitions rose by 86%. The mortgage giant also reached another milestone during the month: its on-balance-sheet holdings of mortgages cracked the $900 billion mark. Fannie Mae can be found online at http://www.fanniemae.com.

Fannie Mae reported net income of nearly $2.7 billion in the third quarter, up 168% from that of the same period last year.Diluted earnings per share were up 175% to $2.69. However, Fannie Mae prefers to measure its "core operating earnings," which differ from the net income measure prescribed under generally accepted accounting principles. Core earnings were up 12% to $1.8 billion, or $1.83 per share. Net interest income totaled $3.5 billion, up 34.7%, and guaranty fee income totaled $613 million, up 32.6%, Fannie Mae reported. By contrast, credit-related expenses more than doubled to $28.6 million, and the government-sponsored enterprise reported losses of $902 million from the call and repurchase of debt, compared with $138 million in the third quarter of 2002. Chairman and chief executive officer Franklin Raines touted the results. "In a quarter marked by historic levels of volatility in the fixed-income markets, our company continued to benefit from the disciplined strategies for growth that have resulted in consistently strong financial performance through a wide range of economic and financial environments," he said. Fannie Mae can be found online at http://www.fanniemae.com.

The Federal Home Loan Banks purchased nearly $23.8 billion in single-family loans under the Mortgage Partnership Finance program in the third quarter, up slightly from the total recorded in the second quarter.The Chicago FHLBank reported that single-family MPF loan purchases rose by 7.7% in the third quarter, up from $22.1 billion in the second quarter. MPF loans funded in the third quarter of 2002 totaled only $6.1 billion. Over 90% of the loans funded in the third quarter were conventional loans, as opposed to government-guaranteed loans. And MPF loans outstanding totaled $81.5 billion as of Sept. 30, up 136% from a year ago. The MPF gives FHLBank members a "better deal" than selling their loans to Fannie Mae and Freddie Mac, according to Chicago FHLBank president Alex Pollock. "The MPF program also benefits the mortgage finance system more broadly," Mr. Pollock said. "As it grows, the mortgage credit risk is spread among hundreds of lending institutions, which is a sounder strategy than concentrating it in two giant companies."

The Bond Market Association has revised its recommended voluntary practice guidelines for secondary market trading in certain European-style callable securities issued by government-sponsored enterprises.Specifically, the association has revised the appendix C portion of the guidelines that deals with calculations for option-adjusted spread pricing. The association's revision reflects "technical improvements and current market conditions, specifically growing investor interest and the fact that multiple analytic and trading platforms and data vendors have recently begun supporting trading and/or analysis of ECSs in conformity with the guidelines," the association said. The association can be found on the Web at http://www.bondmarkets.com.

Alice Sorenson has been named senior vice president for loan administration of Master Financial Inc., an Orange, Calif.-based mortgage banking company that buys and services alternative lending products.She will be responsible for loan servicing, collections, customer service, loss mitigation, asset management, bankruptcy, records management, and investor operations. Before joining Master Financial, Ms. Sorenson served as senior vice president of finance and asset management at Ameriquest Mortgage Co.

Bank of America Corp., Charlotte, N.C., has reported a tripling of mortgage banking income in the third quarter along with record earnings of $2.92 billion ($1.92 per share), an increase of more than 30% from $2.24 billion ($1.45 per share) a year earlier.Mortgage banking income totaled $666 million in the quarter, an increase of 203%, BoA said. Noninterest income increased 38% to $4.44 billion, driven by growth in mortgage banking, credit card, and investment banking income, as well as improvements in equity investments and increases in trading account profits, the company said. BoA can be found online at http://www.bankofamerica.com.

Two classes of CWMBS (Countrywide Home Loans) Inc. mortgage pass-through certificates, series 2001-10 (ALT 2001-6), have been downgraded by Fitch Ratings and removed from Rating Watch Negative.The downgrades were as follows: class B-3, from BB to B; and class B-4, from B to C. The ratings on four other classes in the deal were affirmed. The downgrades were attributed to loss levels, loss expectations, and high delinquencies relative to the applicable credit support.

Redbrick Partners LP, New York, has launched what it says is the first professionally managed U.S. single-family housing equity fund, opening up a "massive new asset class" to investors.Redbrick said it has developed processes that make the acquisition, financing, and renting of individual homes cost-effective. "It's surprising that there has not been more professional ownership of single-family housing in the U.S.," said Jonas Lee, a managing director at Redbrick. "After all, a vast number of individuals have seen huge gains in the value of their own home. .... But the commercial real estate world has focused on large multifamily buildings due to the perceived difficulty of buying and managing a large number of homes one by one." The company said there are more than a dozen established real estate funds in Europe that buy and rent single-family housing. Redbrick can be found on the Web at http://www.redbrickpartners.com.