Servicing

The ratings on five classes of Asset Securitization Corp.'s commercial mortgage pass-through certificates, series 1997-D4, have been lowered by Standard & Poor's.The downgrades were as follows: class B-2, from BB to BB-minus; class B-3, from BB-minus to B-plus; class B-4, from B-plus to B-minus; class B-5, from B to CCC; and class B-6, from CCC to D. The ratings on six other classes in the deal were affirmed. "The lowered ratings reflect anticipated credit support erosion upon the eventual disposition of some of the specially serviced assets, particularly retail and lodging assets; concerns regarding some of the loans on the servicer's watchlist; ongoing interest shortfalls on class B-6; and the susceptibility of class B-5 to future shortfalls," the rating agency said. S&P can be found online at http://www.standardandpoors.com.

Ocwen Financial Corp. and the Department of Veterans Affairs have announced that Ocwen has been awarded the contract for managing and selling VA foreclosures.The West Palm Beach, Fla.-based servicer announced in May that it had won the competition for the contract, but the contract had not yet been awarded. The contract period is for 11 months, with four one-year extensions at the VA's option. Ocwen will manage approximately 12,000 properties per year, with expected revenues of $95 million to $125 million over the life of the contract, Ocwen said. Ronald M. Faris, president of Ocwen Federal Bank FSB, said the company's chief goals under the VA arrangement are to obtain "the highest possible return in the shortest amount of time" on each asset; promote small, "small disadvantaged," women-owned, and veteran-owned businesses through subcontractors; and promote equal housing opportunity for all. The VA itself had previously handled the management and sale of real estate owned for nearly 60 years. Ocwen can be found online at http://www.ocwen.com.

Despite a slight increase in delinquencies, the percentage of loans in foreclosure declined in the second quarter, according to the Mortgage Bankers Association of America.The seasonally adjusted delinquency rate on home loans rose to 4.62%, up 10 basis points from that of the first quarter of this year, the MBA reported. However, the delinquency rate remained 15 bps lower than its level of a year earlier. Meanwhile, the number of loans in foreclosure dropped 8 bps to 1.12% from its record level of 1.20% in the first quarter. The MBA cautioned that its data on subprime loans, where the delinquency rate climbed 59 bps to 12.99% in the second quarter, are based on a much smaller sample than the primary delinquency database. The MBA's chief economist advised that quarterly changes in the subprime rate should be viewed with caution, as the changes may be significantly affected by changes in the reporting database.

ABN Amro Mortgage Group, Ann Arbor, Mich., now services more than $200 billion of mortgage loans for 1.6 million customers.Richard Geary, group senior vice president for loan administration, said that reaching the $200 billion threshold demonstrates the company's commitment to customer service. "AAMG's focus on customer retention has helped maintain the company's leadership position in the market," Mr. Greary said. At the beginning of this year, AAMG serviced $186 billion of home loans. In addition to servicing loans purchased from mortgage brokers through InterFirst Wholesale Lending, AAMG services all loans generated through its various consumer-direct lending operations, including Standard Federal Bank, LaSalle Bank, the AAMG National Lending Center, and its website, http://www.mortgage.com.

The ratings on the B-1 classes of three OMI Trust manufactured housing transactions have been lowered by Standard & Poor's Ratings Services.The downgrades were as follows: OMI Trust 1999-C, class B-1, from CCC to CC; OMI Trust 1999-D, class B-1, from CCC to CC; and OMI Trust 2001-C, class B-1, from CCC-minus to CC. S&P said the downgrades "reflect the unlikelihood that investors will receive timely interest and the ultimate repayment of their original principal investment." The rating agency said high losses in the past year have reduced the deals' overcollateralization ratios to zero, causing writedowns on the B-1 classes of OMI Trust 1999-C and OMI Trust 2001-C and threatening a writedown in OMI Trust 1999-D next month. The deals are backed by manufactured housing retail installment contracts originated by Oakwood Homes Corp. Oakwood announced in November 2002 that it was filing for Chapter 11 bankruptcy protection.

The ratings on three classes of Morgan Stanley Capital I Inc.'s commercial mortgage pass-through certificates, series 1998-CF1, have been lowered by Standard & Poor's Ratings Services.The downgrades were as follows: class C, from A to BBB; class D, from BB-plus to B; and class E, from BB to CCC. Classes D and E were removed from CreditWatch with negative implications, and the ratings on five other classes in the deal were affirmed. S&P attributed the downgrades to expected losses on the numerous delinquent and specially serviced mortgages, $14.1 million in accrued interest shortfalls, and expectations that the shortfalls will continue until the resolution of real estate owned health care assets. In addition, the master servicer, GMAC Commercial Mortgage Corp., has $16.1 million in outstanding advances to the trust, the rating agency said. S&P can be found on the Web at http://www.standardandpoors.com.

Homestar Mortgage Services LLC, Paramus, N.J., has announced the formation of a Conduit Lending Division that will purchase and securitize closed alternative-A loans from mortgage bankers.Mary Glass-Schannault has been promoted to executive vice president of the division, Homestar said. Bela Donine has been named senior vice president and chief credit officer of the division, and Laurie Nicoli has been named senior vice president and director of national production in the unit. The Conduit Lending Division, headquartered in Foothill Ranch, Calif., is scheduled to begin operations late this year, Homestar said. The company can be found on the Web at http://www.homestar.com.

Two classes of Metropolitan Asset Funding residential mortgage-backed securities, series 1998-B, have been downgraded by Fitch Ratings.Class B1 was downgraded from BBB to BB-minus and removed from Rating Watch Negative, and class B2 was downgraded from B-minus to CC, the rating agency said. In addition, the ratings on four other classes in the deal were affirmed. Fitch said the downgrades stemmed from higher-than-expected loss levels that have resulted in the depletion of overcollateralization. The rating agency can be found online at http://www.fitchratings.com.

The ratings on six classes of Asset Securitization Corp.'s commercial mortgage pass-through certificates series 1997-D5 have been lowered by Standard & Poor's.The downgrades were as follows: class A-1E, from AA-plus to AA-minus; class A-2, from A-plus to BBB; class A-3, from A-minus to BBB-minus; class A-4, from BBB-plus to B; class A-5, from BBB to D; and class A-6, from BBB-minus to D. The rating on class A-1E was placed on CreditWatch with negative implications, the ratings on classes A-5 and A-6 were removed from CreditWatch negative, and the ratings on the other three classes remain on CreditWatch negative. S&P also placed the ratings on four other classes -- A-1A, A-1B, A-1C, and A-1D -- on CreditWatch negative. The rating actions were attributed to "significant interest shortfalls" that will result chiefly from the master servicer's recovery of nonrecoverable advances related to a particular loan. The rating agency can be found online at http://www.standardandpoors.com.

Prepayment rates for agency mortgage-backed securities fell across the board among coupons below the 6.5% level and held steady or rose modestly among higher coupons in the August reporting period, according to the Bear Stearns Prepayment Commentary.Analysts Dale Westhoff and Bruce Kramer said percentage declines in constant prepayment rates ranged from 25% to 35% for new cohorts of 5.0% and 5.5% coupons for both conventional MBS and Ginnie Maes. While acknowledging a few surprises among super-premiums in the report, the analysts said "all signs point toward a sharp slowdown across all coupons and vintages in the September reporting period." Speeds of Freddie Mac MBS were once again consistently faster than those of comparable Fannie Maes, but the gap had narrowed and should close by the end of the year, the analysts predicted. Bear Stearns can be found online at http://www.bearstearns.com.