Servicing

Nearly 450 members of America's Community Bankers are selling mortgages to Fannie Mae, Freddie Mac, and private wholesalers participating in the trade group's Mortgage Solutions program.Those institutions, which represent nearly 40% of ACB's membership, have sold $10 billion in loans to the wholesalers so far this year. Last year, loan volume totaled $22 billion. The Mortgage Solutions program, which was started in early 2001, offers thrifts and savings banks special deals as well as access to technology. Countrywide Home Loans, Principal Residential Mortgage, and Financial Freedom Senior Funding Corp. also participate in the conduit program. "Collectively, our members have accrued bottom-line value of more than $60 million through the unprecedented member-advantaged features of these programs," ACB spokesman Robert Schmermund said. ACB can be found online at http://www.acbankers.org.

CBC Cos., Columbus, Ohio, has announced an expansion of its mortgage and real estate services with the acquisition of Nationwide Document Service, Scottsdale, Ariz., and Denali Ventures Inc., Cheyenne, Wyo.The terms of the transactions were not disclosed. CBC said the acquisition of Nationwide Document Service enables it to offer mortgage lenders the services of more than 6,000 trained notaries who can deliver closing documents to the borrower's home or office for signature. With the acquisition of Denali Ventures, CBC said it now offers nationwide property preservation, clean-up service, winterization, and maintenance to lenders with residential real estate owned properties. "With the acquisition of these companies, CBC Companies will be able to offer a comprehensive group of mortgage and real estate services to customers nationwide, saving them both time and money," said Richard Alexander, CBC's director of business development. The companies can be found on the Web at http://www.cbc-companies.com, http://www.nationdocs.com, and http://www.denaliventures.com.

Fannie Mae has priced an offering of $300 million of 5.125% noncumulative preferred stock.The 6.0 million shares of Series L stock have a stated value of $50 per share, the government-sponsored enterprise said. Lehman Brothers Inc. and Goldman, Sachs & Co. are the co-lead managers for the issue. Fannie Mae can be found online at http://www.fanniemae.com.

Significant growth in residential mortgage-backed securities volume is being accompanied by regulatory changes and technological advances that will have "a lasting, monumental effect" on the future of that market, according to Standard & Poor's Ratings Services.In a recent commentary, S&P analysts cited the following developments: predatory lending legislation at the state and city levels; advances in alternative valuation modeling; continued standardization of collateral quality characteristics; and the effect of successful modeling in the United States on the advent of global RMBS risk models. "All in all, the explosion of volumes in the residential market has provided opportunities for increased profitability as well as accelerating a number of very positive technological innovations," said Frank Raiter, a managing director in S&P's Structured Finance group in New York. The title of the report is: "As RMBS Issuance Growth Persists, Regulatory Changes and Technological Advances Emerge." S&P can be found online at http://www.standardandpoors.com.

Flagstar Bancorp, Troy, Mich., the holding company for mortgage lender Flagstar Bank, has declared a 2-for-1 split of its common stock in the form of a stock dividend.The dividend will be paid May 15 to stockholders of record at the close of business on April 30, the company said. Cash will be paid in lieu of fractional shares. Flagstar operates 92 bank branches in Michigan and Indiana, 101 loan origination centers in 21 states, and 14 regional correspondent lending offices across the United States. It can be found online at http://www.flagstar.com.

Class B2 of Impac SAC mortgage pass-through certificates, series 1999-2, has been downgraded from B to CCC by Fitch Ratings, and class B1 has been placed on Rating Watch Negative.The rating actions were attributed to high delinquencies relative to the applicable credit support. Fitch can be found on the Web at http://www.fitchratings.com.

Upgrades continued to represent the bulk of rating activity involving U.S. residential mortgage-backed securities in the first quarter, according to Standard & Poor's Ratings Services.S&P's latest Structured Finance Global Ratings Roundup quarterly report indicated that there were 128 performance-related upgrades, six performance-related downgrades, and 21 guarantor-related downgrades in that market in the first quarter. The affected collateral types included prime, home equity, and home improvement mortgage loans. Transactions backed by prime residential mortgage collateral recorded the highest number of upgrades, followed by deals backed by home equity loans, S&P said. In contrast, the only rating actions on home improvement loan deals were negative. "The prime sector's strong performance continues to showcase the stability of prime collateral, evidenced by the consistency of rating activity over the course of the past few years," said Ernestine Warner, a director in S&P's Structured Finance Surveillance group.

Freddie Mac has reported that its total market share (vis-a-vis that of Fannie Mae) fell from 41% to 32% in the first quarter and its total mortgage portfolio declined at a 1% annualized rate.The report was made in lieu of a first-quarter earnings report, which is being delayed pending previously announced restatements of annual financial results for 2000, 2001, and 2002 and quarterly financial results for 2001 and 2002. The government-sponsored enterprise attributed its loss of market share primarily to "the implementation of higher fees and weak PC security price performance early in the quarter" and predicted that its market share would return to "more typical levels" over the remainder of the year. The GSE's retained portfolio grew by $1 billion during the quarter (a 1% annualized rate), while its total PC portfolio declined by $9 billion (a 3% annualized rate). Freddie Mac also reported that its non-credit-enhanced single-family delinquency rate stood at 0.30% at the end of February, and its multifamily delinquency rate was 0.01%. The pending financial restatements stem from the GSE's re-evaluation, in conjunction with its new auditor, PricewaterhouseCoopers, of certain former accounting policies. Freddie Mac can be found online at http://www.freddiemac.com.

Class B-5 of Bear Stearns Mortgage Securities Inc. mortgage pass-through certificates, series 1996-3, has been downgraded from B to CCC by Fitch Ratings.The rating agency said the action was due to high delinquency levels in the deal relative to applicable credit support. Fitch can be found online at http://www.fitchratings.com.

The delinquency rate on securities backed by home equity loans declined by 25 basis points in the fourth quarter, according to Moody's Investors Service.The delinquency rate on Moody's Home Equity Index Composite was 8.79% at the end of last year, down from 9.04% in the third quarter. However, the chargeoff rate rose slightly, from 1.22% in the third quarter to 1.28%. Moody's analyst Julia Tung said strong issuance helped boost performance, since the average seasoning on home equity deals has fallen to 19 months. Delinquency rates tend to rise rapidly through the first 24 months of a deal's life, Moody's said. Despite the rise in chargeoffs, Moody's said both the delinquency and chargeoff rates remain strong by historical standards. The rating agency can be found on the Web at http://www.moodys.com.