Servicing

Martin F. Baumann, a 30-year veteran of PricewaterhouseCoopers, has been named executive vice president for finance at Freddie Mac.Mr. Baumann will be responsible for accounting, corporate planning, taxation, shareholder relations, and the oversight of market and operating risk at the government-sponsored enterprise, Freddie Mac said. He will report to David W. Glenn, Freddie Mac's vice chairman and president. During his career at PwC, Mr. Baumann was a partner, deputy chairman of its World Financial Services practice, and its global banking leader.

Standard & Poor's Ratings Services has announced that it will not rate structured finance transactions that include Georgia loans originated between Oct. 1, 2002 and March 7, 2003.S&P said its decision followed a review of the repeal provision of the recently enacted amendment to the Georgia Fair Lending Act. The review was aimed at determining whether the amended act applies retroactively to loans originated between Oct. 1, 2002 and March 7, 2003. "There is a presumption in Georgia law, as with federal law, that a law is not retroactive unless it clearly states otherwise," the rating agency said. "The amended act does not explicitly provide for retroactivity. In addition, Georgia case law has interpreted that a repealing act will not be given retroactive operation with respect to rights and obligations under the repealed act." S&P had already announced that it would resume rating transactions that include Georgia loans originated on or after March 7, 2003, the date the amendment to GFLA was signed into law.

Household International Inc. has announced a consent decree with the Securities and Exchange Commission under which the company agreed to end violations of certain federal securities laws but will not be required to pay fines or restate earnings."The SEC's findings in the order, which Household does not admit or deny, include findings that certain prior descriptions of Household's restructuring and other account management policies were incomplete or inaccurate in violation of provisions of the federal securities laws," the Prospect Heights, Ill.-based company said. "Under the order, Household has agreed to cease and desist from any further violations of these provisions." The company said it expects to complete its planned merger with HSBC Holdings plc after receiving shareholder approvals at meetings scheduled for March 28. "We have agreed to the entry of the consent order to resolve the SEC's disclosure concerns relating to Household," said William F. Aldinger, the company's chairman and chief executive officer. Household can be found online at http://www.household.com.

Citing "increased regulatory scrutiny" of Fairbanks Capital Corp.'s servicing practices, Standard and Poor's Ratings Services has placed the company's residential subprime servicer and residential special servicer rankings on CreditWatch with negative implications.S&P cited a recent meeting between the company's management and Maryland regulators to address borrowers' concerns, as well as a request by U.S. Sen. Barbara Mikulski, D-Md., that the Department of Housing and Urban Development consider initiating a wider investigation. The Salt Lake City-based Fairbanks said S&P's action "underscores the challenging atmosphere in which the non-prime servicing industry, and Fairbanks as one of the largest non-prime servicers, operates." Fairbanks pointed to the fact that its Strong servicer rankings are the highest given by S&P, and it said Moody's and Fitch Ratings "have made similar assessments of Fairbanks’ performance." The company pledged "continued cooperation with regulators" and said it remains "committed to industry best practices." S&P can be found online at http://www.standardandpoors.com.

Four classes from various Conseco Finance Corp.-related securitizations have been downgraded from CCC-minus to D (default) by Standard & Poor's Ratings Services.The downgrades were as follows: Home Improvement & Home Equity Loan Trust, series 1996-D, class HE:B-2, and series 1997-A, class HE:B-2; Home Improvement Loan Trust, series 1996-E, single class; and Home Equity Loan Trust, series 1997-B, class B-2. Conseco Finance did not make any payments under a limited guarantee on the March 17 distribution date, resulting in principal distribution shortfalls on series 1996-E and interest shortfalls on the remaining three classes, the rating agency said. S&P can be found online at http://www.standardandpoors.com.

Fannie Mae has completed two-thirds of its 10-year pledge to give $2 trillion in financing to historically underserved families in less than a third of the time, the big secondary market company says in its annual progress report.To date, Fannie Mae has provided more than $1.3 trillion for nearly 12 million targeted families. Half of that amount came last year when, pushed by record-low interest rates, Fannie Mae provided $670 billion for almost 5.5 million families. While rates "dramatically advantage the refi market," Fannie Mae chairman Franklin Raines said growth in purchase-money mortgages was even more spectacular, especially among minorities. Since 1993, when Fannie Mae set its original $1 trillion lending commitment, the number of purchase-money mortgages has increased 93%. But purchase-money mortgages to all minorities are up 177%. While purchase loans to whites were up 64% over the last 10 years, they were up 226% to African-Americans and 243% to Hispanics. Fannie Mae can be found online at http://www.fanniemae.com.

Fitch Ratings has announced the addition of manufactured housing-related transactions to its RMBS Deal Tracker, a Web-based product that identifies original collateral attributes for Fitch-rated residential mortgage-backed securities and mortgage-related asset-backed securities.RMBS Deal Tracker, a downloadable Excel-based spreadsheet, is now available for Fitch-rated subprime, manufactured housing, prime jumbo A, and select alternative-A deals, the rating agency said. Data points provided by the product include average balance, loan-to-value and FICO distributions, property type, occupancy type, documentation type, geographic distribution, and credit enhancement levels. Fitch said it is the first rating agency to offer such a product.

Countrywide Financial Corp., Fannie Mae, Freddie Mac, American Home Mortgage Holdings Inc., and New Century Financial Corp. have snagged the top stock recommendations in the mortgage and real estate industry from Zacks.com, Chicago.Zacks cited Countrywide's $2.2 billion in average daily applications in February, more than double its level of a year earlier, as well as a 121% rise in loan fundings. It pointed to Fannie Mae's rising earnings estimates and said the company "has met or surpassed Wall Street's expectations" in recent quarters. Zacks cited the 15% growth in Freddie Mac's mortgage portfolio last year and the 27% rise in its diluted earnings in the fourth quarter, compared with its earnings a year earlier. Regarding American Home, Zacks said the company's recent deal to acquire the retail lending branches of Principal Residential Mortgage will create the nation's 14th-largest retail mortgage lender. Finally, Zacks cited New Century's 73% increase in loan production in January and February. Further information on the stock recommendations can be found online at http://allstartoppicks.zacks.com.

Four classes of Structured Asset Securities Corp. mortgage pass-through certificates, series 1997-2, have been downgraded by Fitch Ratings.The downgrades were as follows: group 1, class 1B3, from BBB to C; class 1B4, from BB to D; and class 1B5, from B to D; and group 2, class 2B5, from B to C. In addition, class 2B4 of group 2 was placed on Rating Watch Negative. Fitch attributed the actions to loss levels and "future loss expectations on the current severely delinquent loans in the pipeline" relative to the applicable credit support. Fitch can be found online at http://www.fitchratings.com.

Standard & Poor's has announced that it will "closely monitor" S&P-rated securitizations that contain reverse mortgage loans as a result of the pending settlement of a class action lawsuit.The suit against Transamerica Corp. (the originator), Financial Freedom Senior Funding Corp. (the servicer), and Metropolitan Life Insurance Co. (the annuity provider) alleged that excessive fees and shared-appreciation costs were charged to borrowers or their heirs in connection with reverse mortgages, the rating agency said. Some reverse mortgages contain a shared-appreciation provision under which originators receive a share of any home value appreciation that occurs over the term of the mortgage, S&P noted. Moreover, the rating agency said, reverse mortgage originators "typically charge relatively high origination fees" because the period of expected repayment may be long and the origination process is usually "lengthy" compared with that for traditional mortgages. S&P said bond ratings are "not in jeopardy" because of the settlement, but that it will monitor further developments for "potential ratings implications." S&P can be found online at http://www.standardandpoors.com.