Servicing

Hanover Capital Mortgage Holdings, Edison, N.J., has priced a public offering of 3.0 million shares of its common stock at $10 per share.The company said it plans to use the net proceeds of approximately $27.4 million to buy subordinated mortgage-backed securities and other mortgage-related assets. The underwriters have been granted a 30-day option to buy up to 450,000 additional shares of the stock to cover any overallotments. JMP Securities is the lead manager of the offering, and Stifel, Nicolaus & Co. is the co-manager. Hanover Capital, a mortgage real estate investment trust, can be found online at http://www.hanovercapitalholdings.com.

Fannie Mae and Freddie Mac are reporting that the New York blackout has not impaired their debt operations."It is business as usual," said Fannie Mae spokeswoman Janis Smith. Although the bond market was expected to close early Friday, at 2 p.m., Fannie Mae said it was still planning to go to settlement Friday on a $1 billion five-year Subordinated Benchmark Note. It also announced a new deal, a noncallable Benchmark Note, that will be priced on Aug. 20. Meanwhile, Freddie Mac spokeswoman Sharon McHale said the blackout has "not impacted" the giant mortgage company, although trading in the bond market was light. As planned, Freddie Mac said it was going to settlement Friday on a $5 billion, three-year Reference Note.

Two classes of GE Home Equity 1997-HE4 mortgage pass-through certificates have been downgraded by Fitch Ratings.Class B-1 was downgraded from BBB to BB and removed from Rating Watch Negative, and class B-2 was downgraded from CCC to C. The rating agency said losses have depleted the credit support for class B-2, which recently took a principal writedown. "Although the transaction's structure allows for the writedown amount to be repaid from future recoveries, the structure does not allow for interest on the written-down amount to be repaid," Fitch said. The rating agency can be found on the Web at http://www.fitchratings.com.

The Seattle Federal Home Loan Bank has teamed up with a mortgage servicer to enable participants in its Mortgage Purchase Program to sell their loans on a servicing-released basis.This new MPP feature will allow participating banks and thrifts to sell their one- to four-family loans to the FHLBank and concurrently sell the servicing rights to Principal Residential Mortgage Inc., Des Moines, Iowa. "As a member-owned cooperative, we're always looking for ways to add value to our products and services," said Seattle FHLBank executive vice president David Bley. "With servicing released, our financial institution members have another choice in managing their mortgage business." In connection with the announcement, the Seattle bank is launching a marketing campaign to encourage more members to participate in the MPP. The FHLBank has funded over $10 billion loans since the MPP was started three years ago.

Two classes of Access Financial Manufactured Housing series 1996-1 have been downgraded by Fitch Ratings.Class B-1 was downgraded from BBB-minus to BB-minus, and class B-2 was downgraded from CCC to C, Fitch said. In addition, the ratings on two other classes in the deal were affirmed, as were the ratings on three classes of series 1995-1. The actions were attributed to losses and the level of delinquencies relative to the applicable credit support.

Thirteen classes from four subprime mortgage transactions issued by Metropolitan Asset Funding Inc. and Metropolitan Mortgage Funding Inc. have been placed on review for possible downgrade by Moody's Investors Service.The classes placed on review for possible downgrade were as follows: series 1998-A, classes B-1 and B-2; series 1998-B, classes M-2, B-1, and B-2; series 1999-A, classes M-2, B-1, and B-2; and series 2000-B, classes A-1A, A-1, M-1, M-2, and B-1. In addition, Moody's placed on review for possible upgrade 11 classes of mezzanine and subordinated classes from four mortgage transactions issued by Metropolitan Asset Funding. Moody's said the mortgage pools backing the classes on review for possible downgrade have experienced higher-than-expected losses -- especially the pool backing the 2000-B transaction -- and the levels of credit enhancement for those classes appear to be insufficient to maintain their current ratings.

Class M of Morgan Stanley's commercial mortgage pass-through certificates, series 1998-HF2, has been downgraded from CCC to CC by Fitch Ratings.Five other classes in the deal were upgraded and the ratings on eight other classes were affirmed. Fitch attributed the downgrade to estimates of future losses. Five loans in the deal, representing 3.7% of the pool, are currently in special servicing.

Fairbanks Capital Corp., a subprime mortgage servicer based in Salt Lake City, has announced the appointment of three new senior vice presidents and five new vice presidents.The new senior vice presidents and their areas of responsibility are: Patrick Coon, default operations; John Horak, operations; and John Pataky, Jacksonville (Fla.) site operations. The new vice presidents are: Patrick Couture, servicing and loan administration; Alicia Cox, customer service; John Lee, compensation and benefits; Debbie Lewis, corporate communications; and Juan Lorenzo, insurance service. Fairbanks said the executives have worked at such companies as Bank of America, Chase Manhattan Mortgage, First Tennessee National Corp., GMAC/RFC, GreenPoint Insurance Agency, Pacific USA Holdings Corp., and U.S. Bank. The hirings are "part of our focus on improving our loan servicing for borrowers, while continuing to help financial institutions manage the risk of nonprime residential mortgage loans," said James H. Ozanne, chief executive officer of Fairbanks. Fairbanks, which is under investigation by the Federal Trade Commission and the Department of Housing and Urban Development for its servicing practices, fired its president, Bill Garland, in May.

Freddie Mac is conducting a pilot test of a Web-based loan servicing system with one lender, the company's customer service director told the Western States Loan Servicing Conference Aug. 11 in Las Vegas.Patricia Chen said Freddie Mac will integrate the program all the way through default management functions and predicted that the initiative will reduce data entry demands on lenders. The government-sponsored enterprise plans to introduce the program to more lenders late next year and expand it further in 2005, she said. Ms. Chen declined to identify the lender with whom the GSE is doing the pilot. Freddie Mac can be found online at http://www.freddiemac.com.

Three classes of Metropolitan Mortgage Funding mortgage pass-through certificates, series 2000-A, have been downgraded by Moody's Investors Service.The downgrades were as follows: class M-1, from Aa2 to A2; class M-2, from A2 to B3; and class B-1, from Baa2 to C. The ratings on three other classes in the deal have been affirmed. The class B-1 certificates have realized "significant losses" as a result of higher-than-expected pool losses, Moody's said. The rating agency said the certificates are backed by seller-financed loans (nearly 25% of the original mortgage balance) and loans with small average balances. "Seller-financed loans are often of weaker credit quality than lender-originated loans because borrowers tend to have difficulty obtaining financing from established lending institutions, and also because property sellers who finance these loans frequently lack the underwriting skills of conventional lending institutions," Moody's said. Smaller loans also weaken the quality of the collateral because they incur higher relative fixed costs upon liquidation, the rating agency said. Moody's can be found online at http://www.moodys.com.