Servicing

Fannie Mae vice chairman Jamie Gorelick has been named to serve on an independent panel investigating the Sept. 11 terrorist attacks on the United States.Ms. Gorelick, a Democratic appointee to the panel, served as deputy attorney general in the Clinton administration. She joined Fannie Mae in 1997 as vice chair. The commission was established in the recently enacted law that created the Department of Homeland Security. A spokeswoman for Fannie Mae confirmed that Ms. Gorelick has been named to the panel, but had no other details by MortgageWire's deadline. All appointments to the panel must be named by Dec. 15.

Thornburg Mortgage Inc., Santa Fe, N.M., has priced a follow-on offering of 1.0 million shares of common stock at $19.35 per share.The estimated net proceeds of $18.4 million will be used chiefly to fund loans originated by the company and to purchase additional adjustable-rate mortgage securities, Thornburg said. A. G. Edwards, the sole managing underwriter for the offering, has been granted a 30-day option to buy up to an additional 150,000 shares of common stock to cover any overallotments. Thornburg can be found online at http://www.thornburg.com.

Countrywide Financial Corp., Calabasas, Calif., has reported that its average daily fundings grew 7% in November to a record $1.6 billion, while daily applications averaged a record $2.2 billion.In addition, the mortgage pipeline rose 6% to a record $55 billion. Stanford L. Kurland, Countrywide's chief operating officer, said the broker division achieved a new milestone in November as the company's business-to-business e-commerce site, Countrywide Wholesale Business Channel, topped $100 billion in fundings originated since its inception. Mr. Kurland also pointed to the $14 billion increase in Countrywide's servicing portfolio to $435 billion as testimony to the success of the company's macro-hedge business model. "The servicing portfolio grew by $104 billion over last year," he said. "It is notable that this portfolio growth was attained in the midst of one of the most challenging prepayment environments in the history of our industry." Countrywide can be found online at http://www.countrywide.com.

Eleven classes of GE Home Equity mortgage pass-through certificates have been downgraded by Fitch Ratings, and one class has been placed on Rating Watch Negative.The downgrades were as follows: GE Home Equity 1996-HE4, class B-1, from CCC to D; series 1997-HE2, class B-1, from BB to CCC; series 1997-HE3, class B-1, from A to A-minus, and class B-2, from BB to B; 1997-HE4, class B-1, from A to BBB, class B-2, from BB to B, and class B-3, from CCC to D; series 1999-HE1, class B-2, from BBB to BBB-minus, class B-3, from BB to B-minus, and class B-4, from CCC to D; and series 1999-HE3, class B-4, from B to CCC. Class B-3 of series 1999-HE3 was placed on Rating Watch Negative, and class M of series 1996-HE4 remains on Rating Watch Negative. In addition, the ratings on 13 classes of the six deals were affirmed. The rating agency attributed the actions to loss levels and high delinquencies in relation to applicable credit support levels. Fitch can be found online at http://www.fitchratings.com.

Freddie Mac plans to take a $225 million ($0.21 a share) pretax charge in the fourth quarter for a donation to its charitable foundation and other causes. The charge reflects operating earnings, not net earnings.The company, which is having a spectacular year, will release fourth-quarter earnings by the end of January. In the third quarter, Freddie Mac posted net earnings of $1.37 billion. It's quite likely that even with the $225 million charge, the company will earn well over $1 billion in the fourth quarter. Of the $225 million, $205 million is going to the Freddie Mac Foundation (which focuses solely on "children at risk" issues), while the balance is going to charitable causes in the greater Washington metropolitan area. In the fourth quarter of last year, Freddie Mac's chief competitor, Fannie Mae, took a similar charge ($300 million/$0.21 a share) to fund its charitable arm. Freddie Mac's chairman and chief executive officer, Leland Brendsel, serves as chairman of the foundation's board. Freddie Mac can be found on the Web at http://www.freddiemac.com.

Prepayment rates for agency mortgage-backed securities were mixed in the November reporting period, suggesting that speeds have peaked and should begin to slow broadly in December, according to the Bear Stearns Prepayment Commentary.Speeds of 30-year 6.0% coupons and 2002 vintage 6.5% coupons rose by 5%-10%, while those of other coupons either held steady or slowed modestly, said analysts Dale Westhoff and Bruce Kramer. "Given that a top in the numbers is established with today's report, we anticipate a positive reaction by MBS investors as they gain a much clearer perspective as to the timing and magnitude of future cashflows," the analysts said. The fastest-paying cohort continued to be the 2000 vintage Freddie Mac 7.0% coupon, which peaked in October at a constant prepayment rate of 77 CPR and slipped to 73 CPR in November, they reported. The Bear Stearns analysts said the lag time between peak application flow and peak prepayments apparently increased from four weeks to five weeks in this cycle, a little less than expected. But they predicted that prepayments may decline more gradually than in the past "as lenders increase their commitment periods to handle the massive application volume." Bear Stearns can be found online at http://www.bearstearns.com.

First Republic Bank, San Francisco, has completed the sale of approximately $374 million of asset-backed securities supported chiefly by adjustable-rate residential mortgage loans.The securitization was managed by RBS Greenwich Capital. The co-managers were Salomon Smith Barney; Keefe, Bruyette & Woods; Sandler O'Neill & Partners; and First Republic Securities Co. The bank can be found on the Web at http://www.firstrepublic.com.

Martin F. Leibowitz, vice chairman and chief investment officer of TIAA-CREF, has been elected to the board of directors of Freddie Mac.Before joining TIAA-CREF in 1995, Mr. Leibowitz was employed by Salomon Brothers for 26 years. His last position there was managing director and director of research. TIAA-CREF is an investor in equity and fixed-income securities, including Freddie Mac's. The government-sponsored enterprise also reported the resignation from the board of James F. Montgomery, one of Freddie Mac's original board members. Freddie Mac can be found on the Web at http://www.freddiemac.com.

The limited-guarantee B-2 classes of 45 securitizations of manufactured housing contracts by Conseco Finance Corp. and Green Tree Financial Corp. have been downgraded to C by Fitch Ratings.One of the classes (from CFC 2000-1) was downgraded from CCC to C, and the other 44 (from various GTFC deals) were downgraded from CC to C, the rating agency said. Conseco Finance was downgraded from CC to D (default) by Fitch on Dec. 4. "The rating action follows Conseco Finance's failure to make required guarantee payments to 10 of its MH transactions on Dec. 2, 2002," Fitch said. "Conseco Finance has indicated that it intends to suspend all such future guarantee payments relating to MH trusts until there is resolution to the restructuring of its MH business." The rating agency can be found online at http://www.fitchratings.com.

Fairbanks Capital Corp., Salt Lake City, and Consumer Credit Counseling Service of San Francisco have announced an agreement to provide free counseling to homeowners whose loans are serviced by Fairbanks and have become delinquent.Fairbanks, a leading subprime mortgage servicer, will refer the homeowners to CCCS's Housing Education Program for a financial assessment, debt and income analysis, and a budgeting and payment plan, Fairbanks said. The PMI Group Inc., which holds a majority interest in Fairbanks, will support the arrangement with a two-year, $100,000 grant to CCCS to cover start-up and other expenses. "Because Fairbanks frequently handles loans that have a higher risk of default or a history of delinquency, we wanted to find an innovative way to not only get these loans on track, but provide a real benefit to our homeowners," said Tom Basmajian, chairman and chief executive officer of Fairbanks. Fairbanks can be found on the Web at http://www.fairbankscapital.com.