Servicing

Fairbanks Capital Corp., Salt Lake City, has announced an agreement in principle under which its committed financing for servicing advances and working capital would be extended through Sept. 30, 2004.The agreement in principle was executed May 24 between Fairbanks and a majority of its lenders and shareholders, the company said. Beyond the financing extension, Fairbanks said its primary shareholders have agreed to provide an additional $35 million of financing. "This agreement will provide financial stability for Fairbanks as it moves forward with its multipoint plan and work already initiated to address the concerns recently raised by the rating agencies and other parties," said Jim Ozanne, chief executive officer of Fairbanks. "The company will continue to cooperate fully with the Federal Trade Commission, the Department of Housing and Urban Development, and state regulators on their reviews of the company, and is taking a positive, proactive approach to making borrower-sensitive loan servicing improvements."

Class B-3 of Salomon Brothers Mortgage Securities VII Inc.'s series 1998-AQ1 mortgage pass-through certificates has been downgraded from BB to B by Standard & Poor's.The rating agency also raised its ratings on 12 classes from five Salomon Brothers deals and affirmed its ratings on 158 classes from 48 deals. S&P said the downgrade resulted from the erosion of the class's credit support. "This transaction has been realizing net losses, averaging approximately $334,000 per month during the most recent 12 months, while total delinquencies averaged approximately 14.20% per month during the same period," S&P said.

Five classes in three CWMBS (Countrywide Home Loans) Inc. mortgage pass-through deals have been downgraded by Fitch Ratings and five classes in three other deals have been placed on Rating Watch Negative.The downgrades were as follows: series 2000-1, class B-3, from BB to B, and class B-4, from B to C; series 2000-2, class B-3, from BB to B, and class B-4, from CCC to C; and series 2000-4 ALT 2000-1, class B-3, from B to B-minus and removed from Rating Watch Negative. Classes placed on Rating Watch Negative were as follows: series 2001-3 ALT 2001-2, classes B-3 and B-4; series 2001-10 ALT 2001-6, classes B-3 and B-4; and series 2001-14 ALT 2001-7, class B-2. In addition, five classes out of the six deals were upgraded and the ratings on 12 other classes were affirmed. The actions were based on the number of delinquencies in relation to the applicable credit support, the rating agency said.

Eight classes in three CWMBS (IndyMac) Inc. mortgage pass-through deals have been downgraded by Fitch Ratings.The downgrades were as follows: series 2000-F, class B3, from BB to CCC and removed from Rating Watch Negative, and class B4, from C to D; series 2000-G, class B-3, from BBB to BB, class B-4, from B to CC and removed from Rating Watch Negative, and class B-5, from C to D; and series 2000-H, class B-3, from BBB to BB, class B4, from B to CC and removed from Rating Watch Negative, and class B5, from C to D. In addition, Fitch placed class B-2 of series 2000-F on Rating Watch Negative and affirmed its ratings on five other classes from the three deals. The rating agency said the downgrades stemmed from loss levels and high delinquencies relative to the applicable credit support. Fitch can be found online at http://www.fitchratings.com.

Freddie Mac acquired $64.3 billion worth of mortgages in April, its second-best purchase month of the year, but its retained portfolio continued to suffer from the refinancing boom.At the end of April, Freddie Mac held $568.98 billion in mortgages and others assets, compared with $569.52 billion at the end of March. Compared with the same period a year ago, the company's portfolio is up 9%. But over the past 13 months Freddie Mac has suffered from four sequential declines in its portfolio balance. In April its purchase commitments were a moderately strong $25.2 billion, but down from March's $32.2 billion. Its loan purchases grew 44% in April compared with those of a year earlier, but its chief competitor, Fannie Mae, saw its purchases grow by 140%. The company is in the midst of restating its earnings and will release results for the first and second quarters in July. At noon May 22, its shares were trading down $1.72 to $59.02.

Classes G and H of Morgan Stanley Capital I Inc.'s commercial mortgage pass-through certificates series 1997-XL1 have been placed on Rating Watch Negative by Fitch Ratings.The ratings on nine other classes in the deal were affirmed. The rating agency attributed the Rating Watch placement to the transfer to special servicing of the Westgate Mall loan, secured by a regional mall in Fairview Park, Ohio, and the deterioration in performance of the Grand Kempinski loan, secured by a luxury hotel in Dallas.

Class A-6 of Asset Securitization Corp.'s commercial mortgage pass-through certificates series 1996-MDVI has been placed on CreditWatch with negative implications by Standard & Poor's.S&P also affirmed the ratings on six other classes from the same deal. The action "reflects the refinancing risk associated with the Prime Retail II portfolio loan, which has an outstanding principal balance of $337.1 million (42% of the mortgage pool balance)," S&P said. The loan is collateralized by 13 factory outlet centers in 10 states, the rating agency said.

Fitch Ratings has removed the senior unsecured debt ratings of Countrywide Financial Corp. and Countrywide Home Loans Inc. from Rating Watch Negative.However, the rating outlook is negative, Fitch said. The rating agency placed Countrywide's debt, rated A, on review in February, saying that falling interest rates can substantially reduce the value of assets such as mortgage servicing rights. Fitch attributed the affirmation of the ratings to "the company's additional capital support, strong origination and servicing platforms, declining capitalization of mortgage servicing rights in relation to capital, and continued strength in operating results." On the other hand, the negative outlook "reflects CFC's relatively more aggressive MSR valuations compared to industry peers and the need for improvement in the processes and procedures to effectively manage the complex process of hedging the MSR asset," the rating agency said. Fitch can be found online at http://www.fitchratings.com.

Timothy Howard, Fannie Mae's chief financial officer, has been named vice chairman of the government-sponsored enterprise, replacing the departing Jamie Gorelick.Mr. Howard's appointment followed his election to Fannie Mae's board of directors at the company's annual meeting of shareholders, the GSE said. He will continue to serve as company CFO. Mr. Howard joined Fannie Mae in 1982 as vice president and chief economist. He later served as senior vice president for economics and planning, executive vice president of economics, strategic planning, and financial analysis, and EVP of asset management. Ms. Gorelick announced in January that she would leave Fannie Mae to become a member of the National Commission on Terrorist Attacks. She recently announced that she will become a partner in Wilmer, Cutler & Pickering, a Washington law firm, as of July 1.

Foreclosure activity is increasing in the New York City metropolitan area due to "dismal" economic conditions, according to Foreclosures.com, a property investment advisory firm based in Sacramento, Calif."New York City is one of the five most troubled housing markets in the nation," said Alexis McGee, president of Foreclosures.com. "The employment picture is getting worse." The city has lost 176,000 jobs in the past two years, and the number of people out of work more than six months is increasing, she said. The city's economic woes stem from weaknesses in tourism and the financial sector, and New York state Comptroller Alan Hevesi is predicting further shrinkage in the city's economic this year, Ms. McGee said. The firm can be found on the Web at http://www.foreclosures.com.