Servicing

Class A of Nomura Asset Capital Corp.'s mortgage pass-through certificates, series 1994-1, has been downgraded from Aa2 to Caa1 by Moody's Investors Service.Moody's said the downgrade was the result of writedowns being experienced by the class A certificates. The rating agency can be found on the Web at http://www.moodys.com.

Residential Funding Corp., Minneapolis, has reported a record $25.3 billion issuance of mortgage- and asset-backed securities in the first half of this year.GMAC-RFC said the total included: $6.2 billion in residential subprime securities; $6.0 billion in jumbo A-quality loan securities; $4.6 billion of alternative-A securities; $1.7 billion in securities backed by second-lien products, such as home equity lines of credit, closed-end home equity loans, and loans with high loan-to-value ratios; and $6.6 billion in "program exceptions," seasoned product, and HLTV first-lien product. The company can be found online at http://www.gmacrfc.com.

The collapse of Treasury bond prices has had mixed effects on the returns of U.S. mortgage market participants, with mortgage banks -- especially those that are "more pure origination shops" -- seeing "the most stress," according to Moody's Investors Service.While production-only mortgage companies are suffering, most other industry businesses are seeing their returns affected "both positively and negatively, and sometimes at the same time," Moody's said. The rating agency said it does not expect the effects to result in "material negative credit implications." Moody's can be found online at http://www.moodys.com.

The Federal Home Loans Banks are doing a fairly good job of retaining their mortgage customers and building their mortgage portfolios, despite the record-setting pace of refinancings during the first half of this year.The FHLBank System's second-quarter financial report shows that mortgage purchases by the banks totaled $46.3 billion for the first half, while prepayments totaled $16.3 billion. As a result, the FHLBanks held $90.4 billion in residential mortgage loans on their books as of June 30, up from $60.6 billion at the beginning of the year. Residential mortgage loans constitute 11.2% of total system assets. The financial report also shows that FHLBanks' earnings and lending activity (advances) were flat when comparing the first and second quarters. Earnings declined by $5 million to $451.0 million in the second quarter and advances rose by $7 billion to $506.3 billion.

Community organizers with National Peoples Action have created a "Fairbanks Hot Spot Initiative" to identify and remedy consumer disputes with the troubled subprime servicer, Fairbanks Capital Corp., Salt Lake City.In the past four weeks, NPA has helped over 100 homeowners in five cities file complaints against the servicer. "Fairbanks has already waived thousands of dollars of fees and drastically reduced interest rates for many of these borrowers," NPA said. Fairbanks has instituted a policy whereby it temporarily halts the foreclosure process when it receives a qualified written dispute. Fairbanks has completed a management reorganization, and it has stopped accepting new business since it came under investigation by the federal government for its servicing practices. A company spokeswoman said Fairbanks is willing to work with community groups, but she maintained that the number of consumer complaints has been going down significantly.

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.