Servicing

Fitch Ratings has announced that it "does not currently expect" to change its servicer ratings of Fairbanks Capital Corp. as a result of federal regulatory reviews of Fairbanks' subprime servicing practices or potential liability from existing lawsuits.Fitch said many lawsuits have been filed against Fairbanks alleging predatory and deceptive business practices, which the rating agency said it takes very seriously. "However, Fairbanks has been the specific target of groups who have formed a combined effort to bring their issues to the attention of the media, regulators, and the rating agencies," Fitch said. The reviews cited by Fitch have been announced by the Department of Housing and Urban Development and the Federal Trade Commission. Fairbanks' residential primary servicer ratings by Fitch are RPS1 for subprime loans and RPS1-minus for alternative-A and home equity loans, and its residential special servicer rating is RSS1, the rating agency said. "If at any time Fitch determines that Fairbanks has not fully met the requirements of a servicer at its current rating level, or if there is any legal or regulatory finding that Fairbanks has engaged in practices that violate federal or state laws, Fitch will take immediate and definitive action with regard to their servicer rating," Fitch said.

Fitch Ratings has introduced a new set of indexes for residential mortgage-backed securities designed to offer performance analysis based on loan-level data.The RMBS Market Sector Performance Indices will present delinquency and foreclosure statistics on the prime, alternative-A, and subprime market sectors, although only the subprime indexes were available as of March 31, Fitch said. The indexes will offer a short commentary on each market sector's performance, and the statistics and commentary will be updated monthly, the rating agency said. "The new Fitch RMBS Market Sector Indices offer high-quality mortgage loan data, flexibility in data analysis, and static mortgage pools," said Susan Kulakowski, a senior director at Fitch. She said Fitch standardizes monthly performance data, grouping mortgages into appropriate pools that are then linked to the appropriate RMBS. Subscribers to Fitch's website can access the indexes at http://www.fitchratings.com.

AmeriServ Financial Inc., Johnstown, Pa., has announced a move to consolidate the management of its mortgage servicing operation in Atlanta with that of its mortgage lending operations in Western Pennsylvania.As part of the consolidation, William D. Adams of AmeriServ Financial Bank has been appointed president and chief executive officer of Standard Mortgage Corp. of Georgia and will direct the restructuring of that Atlanta-based mortgage servicing affiliate from Johnstown, AmeriServ said. The company noted that it recently sold the servicing rights on approximately $450 million of mortgage loans serviced through SMCG. Gary McKeown, AmeriServ's chief lending officer, said the Atlanta operation "does not fit our long-term vision to return to more of a community banking focus." In a related announcement, AmeriServ said its local mortgage lending subsidiary, AmeriServ Mortgage Co., will become the residential lending division of AmeriServ Financial Bank. AmeriServ can be found online at http://www.ameriservfinancial.com.

Class B4 of Chase Mortgage Finance Trust mortgage pass-through certificates series 1999-S12 has been downgraded from B to B-minus by Fitch Ratings and removed from Rating Watch Negative.The rating agency attributed the action to loss levels and high delinquencies relative to applicable credit support. As of March 25, 2.81% of the pool was over 90 days delinquent, and class B4 had 0.70% credit support remaining, Fitch said. The rating agency can be found online at http://www.fitchratings.com.

A subsidiary of Capital Automotive REIT, McLean, Va., has issued $228 million of triple-net-lease mortgage notes, series 2003-1.CARS, a real estate investment trust that acquires real property and improvements used by operators of multifranchised automotive dealerships, said the fixed-rate notes are collateralized by 50 automotive retail properties subject to long-term, triple-net leases. The $109 million of class A-1 notes mature on Sept. 25, 2015 and are fully amortizing, while the $119 million of class A-2 notes mature on March 25, 2019 and are based on a 20-year amortization schedule, the REIT said. Credit Suisse First Boston acted as the lead manager of the transaction, which was privately placed, and Salomon Smith Barney was co-manager. The REIT can be found online at http://www.capitalautomotive.com.

Standard & Poor's Ratings Services has announced that it will rate structured finance transactions that include New York loans governed by the state's predatory lending law (which takes effect April 1), provided that any potential assignee liability is covered in full under S&P criteria.S&P said the law sets forth calculations and thresholds for determining what constitutes a high-cost loan, so lenders who wish to avoid making them should be able to do so. "For lenders that choose to make high-cost loans, the law prohibits certain practices and sets forth certain tests that must be adhered to," S&P said. ".... [V]iolations could result in liability for the originator of the high-cost loans as well as for purchasers and assignees." The liability -- in the form of a set-off or counterclaim to foreclosure actions or other actions to collect on delinquent loans -- is capped, but it may exceed the unpaid principal balance of the loan, S&P said. For deals that do not include high-cost loans, S&P will require the issuer to provide a representation and warranty to that effect. For other deals, the issuer must warrant that the high-cost loans comply with the law. S&P can be found online at http://www.standardandpoors.com.

The delinquency rate on credit card and home equity loans rose late last year, suggesting that consumer debt remains soft, according to the American Bankers Association.The ABA's quarterly Consumer Credit Delinquency Bulletin showed that the delinquency rate on closed-end home equity loans rose to 1.64% in the fourth quarter from 1.38% in the third. However, the delinquency rate on home equity lines of credit inched down 2 basis points to 0.56%. Home equity lines have the lowest delinquency rate of any consumer loan category tracked by the ABA. Meanwhile, credit card delinquencies, sometimes considered a harbinger of overall consumer credit quality, rose to a record 4.07%, the ABA said. The trade group can be found online at http://www.aba.com.

Alex J. Pollock, president and chief executive officer of the Federal Home Loan Bank of Chicago, has been named to the board of directors of Allied Capital, Washington.Allied Capital noted that Mr. Pollock is the architect of the Chicago FHLBank's Mortgage Partnership Finance Program. Although he and another newly appointed independent director, consultant Ann Torre Grant, will serve on the board effective immediately, they must stand for election in May at Allied Capital's annual stockholders' meeting. Allied Capital is a business development company, and it invests in non-investment-grade commercial mortgage-backed securities. It can be found online at http://www.alliedcapital.com.

Moody's Investors Service has announced that New York State home loans originated after April 1, 2003 -- the effective date of the state's predatory lending act -- may be included in residential mortgage-backed securitizations without increasing risk to investors as long as they are not "high-cost" loans.Moody's said the inclusion of small amounts of high-cost loans in RMBS would be considered on a case-by-case basis because of increased risk. Christine Lachnicht, a Moody's vice president and senior analyst, said the New York law provides clear standards that define the threshold between home loans and high-cost loans that should enable lenders to establish effective compliance procedures. Moreover, the act limits assignee liability for noncompliant high-cost loans. The rating agency said New York home loans may be included in securitizations without adverse credit impact if the issuer demonstrates adequate procedures to ensure compliance with the act. "Generally speaking, a high-cost loan transaction could pass muster if 2% of the pool or less consists of New York high-cost loans that fit neatly within clear, objective standards for compliance," Ms. Lachnicht said. Moody's can be found online at http://www.moodys.com.

The risk to federally insured depository institutions of holding large concentrations of Fannie Mae and Freddie Mac mortgage-backed and corporate debt securities is being monitored by the Treasury Department, according to a Treasury official."Concentration is your enemy -- you want to be careful," said Wayne Abernathy, assistant secretary of the Treasury for financial institutions, in a question-and-answer session following his speech at a Ginnie Mae investor symposium. Mr. Abernathy said the department is awaiting the results of a study requested by Rep. Richard Baker, R-La., that is designed to size up GSE security concentration risk at depositories.