Servicing

First National Financial Corp., Toronto, has been added to the Standard & Poor's Select Servicer List as a master, special, and primary servicer of commercial mortgages.S&P said the company is the first Canadian commercial mortgage servicer to be added to its Select Servicer List. The rating agency cited the company's "extensive history of originating, securitizing, and servicing assets, combined with an experienced management team and suitable computer systems." S&P said it admits servicers to the list based on "a comprehensive assessment of firms' operational capabilities for servicing commercial mortgage, residential mortgage, or asset-backed portfolios." S&P can be found online at http://www.standardandpoors.com/ratings.

A nonconforming mortgage specialist and investment manager has launched what it says is the first real estate-backed synthetic guaranteed investment contract in the market.Larry H. Mylnechuk, a principal at Residential Capital Management LLC, told attendees at a State Street Global Alliances roundtable in New York that the company has signed one account for the new investment product it created and is working to sign a second by the end of the first quarter. Residential Capital is one of the asset managers SSGA supports by providing strategic operating capital, managerial support, and distribution as part of its goal to increase the value of its portfolio companies and offer a wider array of investment products to its institutional client base. SSGA can be found online at http://www.ssga.com.

Ocwen Financial Corp., West Palm Beach, Fla., has reported a net loss of $66.5 million ($0.99 per share) for 2002, compared with a loss of $124.8 million ($1.86 per share) in 2001.For the fourth quarter, the company reported a net loss of $7.8 million ($0.12 per share), compared with a loss of $6.9 million ($0.10 per share) a year earlier. William C. Erbey, Ocwen's chairman and chief executive officer, said the fourth-quarter loss included nonrecurring and severance charges totaling $6.5 million that will lower the company's expense structure. "We continue to make progress in our strategy of transitioning Ocwen to a fee-based business and reducing our noncore assets," Mr. Erbey said. He cited the company's core business earnings as "especially noteworthy" because its residential loan servicing business had record pretax earnings of $9.2 million in the fourth quarter despite very low interest rates. As of Dec. 31, Ocwen serviced approximately $30.7 billion of loans, up 40% from $21.9 billion at year-end 2001, Ocwen said. The company can be found online at http://www.ocwen.com.

AmeriServ Financial Inc., Johnstown, Pa., has announced the sale of servicing rights on approximately $450 million of mortgage loans being serviced through its Standard Mortgage Corp. of Georgia subsidiary.The servicing rights represent 69% of Standard Mortgage's total servicing portfolio of $650 million, AmeriServ Financial said. "We have been clear in our intent to return to a strategic focus more suited to a community bank," said Craig G. Ford, the company's interim chairman, president, and chief executive officer. "This sale of mortgage servicing rights provides reduced exposure to interest rate risk and will accelerate AmeriServ Financial's recovery momentum." In 2002, AmeriServ Financial realized a mortgage servicing impairment charge of $3.7 million.

Prepayment rates for agency mortgage-backed securities slowed down in January for most conventional 30-year coupons and vintages, according to the Bear Stearns Prepayment Commentary.The slowdown in constant prepayment rates averaged 2-3 CPR for most coupons, while the 2002 vintages slowed even less or, in the case of the 5.5% and 6.0% coupons, speeded up slightly, said analysts Dale Westhoff and Bruce Kramer. "The numbers show little evidence of burnout in the fully refinanceable conventional coupons, even among the most seasoned vintages," the analysts said. "For example, January marked the fourth consecutive month that 1998 6.5s have paid above 60 CPR and 2000 7.0s above 70 CPR." As for Ginnie Mae MBS speeds, they held steady or rose somewhat in the January reporting period. Messrs. Westhoff and Kramer said this may represent "the leading edge of a borrower response" to the falloff in mortgage rates in late December, or a reflection of servicer buyouts. Bear Stearns can be found online at http://www.bearstearns.com.

Employment in the mortgage banking and brokerage sectors rose 1% in December from the previous month as lenders added workers to handle the tidal wave of loan applications.Compared with the same month a year ago, the two sectors (which are listed as one in government statistics) increased their employment ranks by 16.6%. At the end of December mortgage jobs totaled 412,400, according to the Bureau of Labor Statistics. A year ago the number stood at 353,500. How much longer the industry will continue to add workers remains unclear. According to preliminary survey information being compiled by National Mortgage News, the industry funded a record $940 billion in the fourth quarter alone. And residential loan volumes continued strong in January as well. "I think the first quarter is going to be very good for this industry," one investment banker told MortgageWire. The BLS can be found online at http://stats.bls.gov.

Thornburg Mortgage Inc., Santa Fe, N.M., has priced an offering of 3.2 million shares of common stock at $20 per share.Net proceeds from the transaction, which are estimated at $60.7 million, will be used mainly to fund loans originated by the company and to buy additional adjustable-rate mortgage securities, Thornburg said. UBS Warburg acted as the book-running lead manager for the transaction. A.G. Edwards & Sons Inc. was the co-lead manager, and U.S. Bancorp Piper Jaffray and Wachovia Securities Inc. acted as co-managers. The underwriters have been granted a 30-day option to buy up to an additional 480,000 shares of common stock to cover any overallotments. Thornburg can be found online at http://www.thornburg.com.

Municipal Mortgage & Equity LLC, Baltimore, has completed an offering of 2.8 million shares of common stock at $23.60 per share.Net proceeds from the transaction are estimated at $62.3 million, MuniMae said. The offering was managed by RBC Capital Markets, Merrill Lynch & Co., UBS Warburg, Legg Mason Wood Walker Inc. and Wachovia Securities. The underwriters have been granted an option to buy up to an additional 420,000 shares of common stock to cover any overallotments. MuniMae can be found on the Web at http://www.munimaemidland.com.

More community banks and thrifts sold residential mortgage loans into the secondary market last year, but the sales still represented only 45% of their loan production, according to an annual survey by America's Community Bankers.The ACB survey found that 72% of the respondents sold loans to secondary market agencies and private wholesalers in the first nine months of 2002, up from 55% in 2001. The 315 respondents sold $22.5 billion in residential mortgage loans, including $9.5 billion to Fannie Mae, $7.6 billion to private wholesalers/conduits, and $3.2 billion to Freddie Mac. However, they still retained $22.5 billion in originations on their books. The author of the survey, ACB senior financial economist Steven Davidson, pointed out that the smaller community banks tend to do more business with Freddie Mac, while the larger banks (with more than $1 billion in assets) tend to do more business with Fannie Mae. Only 9% of the banks and thrifts in the survey participate in the Federal Home Loan Banks' Mortgage Partnership Finance program and the Mortgage Purchase Program, and they sold $888,000 in loans to the FHLBanks. ACB can be found online at http://www.acbankers.org.

Freddie Mac has priced $3 billion of 2.375% three-year Reference Notes due April 15, 2006.The issue (CUSIP 3134A4SX3) was priced at 99.673 to yield 2.483%, 81 basis points over that of two-year Treasury notes. The issue is scheduled to settle Feb. 7. Freddie Mac's website address is http://www.freddiemac.com.