Servicing

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.

Thirty-one minority professionals have been awarded scholarships to the Mortgage Bankers Association of America's School of Mortgage Banking under a joint MBA/Freddie Mac diversity program.The program, Path to Diversity, was developed two years ago to increase cultural diversity in the real estate finance industry. In addition to providing scholarships, the program supports the internship programs of the 17 participating member firms by offering MBA distance-learning courses to interns free of charge, the sponsoring organizations said. The member firms are: American First FCU, Bank of America, Cenlar, Chase Manhattan Mortgage, CitiMortgage, CTX Mortgage, Countrywide, Ditech, GMAC, Irwin Mortgage, Magnet Portfolio Services, Peninsula Mortgage Bankers, Peoples Choice Mortgage, R-G Financial Republic Bank, SunTrust Mortgage, United Guaranty, and Wells Fargo Home Mortgage. The MBA can be found online at http://www.mbaa.org.

Two classes from two Conseco Finance Corp.-related securitizations by Home Improvement & Home Equity Loan Trust have been downgraded to default status by Standard & Poor's.The downgrades were as follows: class HI:B-2 of series 1996-F, from CCC-minus to D; and class HE:B-2 of series 1997-E, from CCC-minus to D. S&P said Conseco Finance did not make any payments under its limited guarantee of the deals on the May 15 distribution date, resulting in interest shortfalls on the two classes. Both classes have credit support from the limited guarantee and from monthly excess spread, the rating agency said.

The ratings on 27 classes of Oakwood Mortgage Investors Inc. and OMI Trust manufactured housing transactions have been lowered and removed from CreditWatch with negative implications by Standard & Poor's.The affected deals are: Oakwood Mortgage Investors series 1998-A and 1998-B; and OMI Trust series 1999-C, 1999-D, 1999-E, 2000-C, and 2001-E. In addition, S&P raised its ratings on 10 classes of Oakwood-related MH deals and removed them from CreditWatch, and affirmed its ratings on 24 other Oakwood-related MH classes and removed them from CreditWatch, the rating agency reported. "The lowered ratings reflect the continued poor performance of the underlying pools of manufactured housing contracts and the resulting deterioration of credit enhancement, with series issued in recent vintages displaying greater signs of stress relative to series issued in previous vintages," S&P said. Oakwood announced last November that it was filing for Chapter 11 bankruptcy protection.

The PMI Group Inc., Walnut Creek, Calif., has announced a consent solicitation regarding certain debentures that would exclude the beleaguered Fairbanks Capital Holding Corp. as a "designated subsidiary" of PMI.The company is seeking consents to a proposal to change the definition of a designated subsidiary in the indenture for its 2.50% senior convertible debentures due 2021 by excluding Fairbanks Capital Holding, its subsidiaries, and any of their successors. It would also increase from 15% to 25% the percentage of consolidated assets a subsidiary would have to represent in order to constitute a designated subsidiary. "As a result of the proposed amendment, any failure to pay indebtedness at maturity or default with respect to indebtedness for borrowed money by Fairbanks or any of its subsidiaries would not constitute events of default under the indenture," PMI said. Standard & Poor's recently revised its rating outlook for PMI from stable to negative after S&P lowered the residential subprime and special servicer rankings of the Salt Lake City-based Fairbanks Capital Corp., a subsidiary of Fairbanks Capital Holding. PMI owns 57% of the servicer, which has been the target of lawsuits regarding its servicing practices and of reviews by the Department of Housing and Urban Development and the Federal Trade Commission.

The 24 classes of PNC Mortgage Securities Corp. mortgage pass-through certificates that were recently downgraded by Fitch Ratings are not affiliated with PNC Financial Services Group, Fitch has reportedPNC's residential mortgage banking platform was acquired by Washington Mutual on Feb. 1, 2001, the rating agency said. The downgraded classes are from 20 securitizations issued in 1998, 1999, and 2000.

Mortgage-backed securities issuance continued to climb in the first quarter, increasing 44% to $786.7 billion from $547.0 billion a year earlier, according to The Bond Market Association."The surge reflects the continuing appeal of historically low interest rates; however, the increase in activity is much more modest when compared to [that of] the previous quarter," the association reported. MBS issuance was up only 4.6% from the fourth quarter, when volumes totaled $773.8 billion. TBMA can be found online at http://www.bondmarkets.com.

Commenting on an observation that Fannie Mae's mortgage-related growth has been slow relative to that of banks, Fannie Mae chairman Franklin Raines said he considers the company's growth strong enough and thinks banks are exposing themselves to some risk by investing so heavily in mortgage products.Mr. Raines told listeners to the Morgan Stanley Financial Services' webcast CEOs Unplugged Conference 2003 that he believes when interest rates rise and the yield curve flattens, banks will exit the mortgage investment market simultaneously in a way that will be disadvantageous to the financial institutions but advantageous to Fannie Mae. Wall Street observers, whose firms sell mortgage investments to banks, have acknowledged that sudden and sharp changes in interest rate and yield-curve conditions could hurt the investments that banks favor, but said they consider such changes unlikely.

Countrywide Financial Corp., Calabasas, Calif., has announced the sale of approximately 2.2 million newly issued shares of its common stock.The lead underwriter of the offering is J.P. Morgan Securities Inc. Countrywide said the net proceeds will be used for general corporate purposes. The company can be found on the Web at http://www.countrywide.com.