Servicing

Washington Mutual, Seattle, the largest servicer of home mortgages in the United States, said late Tuesday that it has realigned its business units, and announced the retirement of its mortgage chief, Craig Davis. The sudden retirement of the 52-year-old Mr. Davis, effective immediately, comes three weeks after the company disclosed that it would book a loss in the third quarter in regard to mortgage loan sales because of problems in tracking loan commitments. Asked whether Mr. Davis' retirement is related to the anticipated loss on loan sales, a WaMu spokesman said the company's realignment "makes it less likely that operational difficulties will occur in the future." The spokesman added, "Craig chose to retire." Mr. Davis will remain as an adviser to WaMu until year-end. WaMu said it will realign its businesses around two groups: retail customers and commercial clients. Deanna Oppenheimer, president of WaMu's banking and financial services group, will be in charge of residential lending. In trading at midday Wednesday, WaMu's shares were down 1.27% to $38.87. (For more details, see the Oct. 6 issue of National Mortgage News.)

Delta Financial Corp., Woodbury, N.Y., has announced plans to redeem at par all outstanding 9.5% senior notes due 2004 on Oct. 30.Delta said the aggregate redemption price, including principal and accrued interest, is expected to be approximately $11 million. The company said it will have no unsecured long-term debt on its balance sheet after the redemption. Delta can be found online at http://www.deltafinancial.com.

Fitch Ratings has announced the addition of the alternative-A market sector to its Web-based RMBS Market Sector Performance Indices.The indices present mortgage delinquency statistics for the prime, alt-A, and subprime sectors by period of security issuance, and facilitates the comparison of performance over time, the rating agency said. The residential mortgage-backed securities indices include 60-day and 90-day delinquencies, foreclosures, real estate owned, a combined 60-day-plus status, and a short commentary on each sector's performance. The statistics and commentary are updated monthly. Fitch said the alt-A indices include Fitch-rated transactions, of all product types, for which the rating agency has a complete performance history, beginning with 1994 originations.

Fitch Ratings has announced that it will continue to rate loan pools containing loans subject to new predatory lending legislation in Maine.The law, which went into effect Sept. 13, amends a 1995 statute, especially in regard to what it defines as "high-rate, high-fee" mortgages. That description now dovetails with what the Home Ownership and Equity Protection Act defines as a high-cost home loan. Fitch requires that any high-rate, high-fee loan to be included in a structured finance transaction must be identified as such. Lenders must be able to buy back unidentified high-rate, high-fee mortgages, the rating agency said.

After lowering the Federal Home Loan Bank of New York's credit rating, Standard & Poor's analysts are starting to worry about the ability of the FHLBanks to manage interest rate risk on their investments in whole mortgage loans and mortgage-backed securities.S&P credit analyst Michael DeStefano pointed out that the Pittsburgh FHLBank recently reported that it had problems hedging whole loans it purchased as part of the Mortgage Partnership Finance program. "We are taking a close look at all the banks," Mr. DeStefano said during a conference call. He said the asset quality problems the New York FHLBank had with its manufactured housing securities are mostly confined to the New York bank. However, the other FHLBanks have invested more heavily in MBS and MPF-type loans. "We are not forecasting or predicting problems at any of the other banks," the S&P analyst said. "But it is an area we want to look at … given where we are in the interest rate cycle."

The American Stock Exchange has announced the commencement of trading in common shares of a new closed-end fund issued by ING Clarion Real Estate.The ING Clarion Real Estate Income Fund is the first closed-end fund to be issued by ING Clarion and the first real estate closed-end fund to invest in both equity and fixed-income real estate securities, Amex reported. The fund's primary investment objectives are to seek high current income and capital appreciation. Amex can be found online at http://www.amex.com.

Class B of First Union Home Equity Loan Series 1997-3 has been downgraded from BBB to BB by Fitch Ratings and removed from Rating Watch Negative.The rating action was attributed to the poor performance of the underlying collateral in the deal. Losses have been higher than expected and have resulted in the depletion of overcollateralization, Fitch said.

Standard & Poor's Ratings Services has announced that it will rate structured finance deals that include Nevada loans governed by the state's new predatory lending law.The law, which takes effect Oct. 1, prohibits certain practices in regard to making home loans (as defined by the statute) and sets forth rules that lenders must abide by, S&P said. Violations could result in liability for the originators, purchasers, or assignees of home loans. The liability of purchasers and assignees for a loan that violates the act may exceed the unpaid principal balance of the loan, but the liability is capped, S&P said. The rating agency said it will require certain representations and warranties for deals containing Nevada loans. S&P can be found online at http://www.standardandpoors.com.

Standard & Poor's has lowered the Federal Home Loan Bank of New York's coveted AAA credit rating to AA-plus due to a $183 million loss on a sale of $1 billion in downgraded manufactured housing securities."While the bank has disposed of these [MH] securities, which helps to reduce its credit risk profile, the FHLB-NY's retained earnings were cut in half, and a significant quarterly loss will be recognized," said S&P's credit analyst Jonathan Ukeiley. The New York FHLBank has suspended its third-quarter dividend to prevent further drain on its retained earnings, which totaled $240 million at the end of the second quarter. While the bank rebuilds it retained earnings, "it is expected that profitability will remain depressed given the low interest rate environment," the S&P analyst said. Meanwhile, Fitch Ratings took no action on its AAA rating of the bank.

Delta Financial Corp., Woodbury, N.Y., has priced a $434 million securitization of closed-end home equity loans through its subsidiary Renaissance Mortgage Acceptance Corp.The Renaissance Home Equity Loan Trust 2003-3 uses a senior/subordinate structure and has fully funded overcollateralization at closing, Delta said. The company said it expects to use a pre-funding feature and deliver approximately $350 million of mortgage loans to the trust by Sept. 30, with the remainder to be delivered in October. Delta can be found on the Web at http://www.deltafinancial.com.