Servicing

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.

Eight classes in five CWMBS Countrywide Home Loans mortgage pass-through deals have been downgraded by Fitch Ratings, and five have been placed on Rating Watch Negative.The downgrades were as follows: class B-4 of CWMBS 2000-2, from B to CCC; class B-3 of CWMBS 2000-4 (Alt 2000-1), from BB to BB-minus and placed on Rating Watch Negative; class B-4 of CWMBS 2000-4 (Alt 2000-1), from B to C; class B-3 of CWMBS 2001-4 (Alt 2001-3), from BB to B and placed on Rating Watch Negative; class B-4 of CWMBS 2001-4 (Alt 2001-3), from B to D; class B-4 of CWMBS 2001-8 (Alt 2001-5), from B to CC; class B-3 of CWMBS 2001-14, from BB to B and placed on Rating Watch Negative; and class B-4 of CWMBS 2001-14, from B to C. In addition, the B-3 classes of CWMBS 2000-2 and 2001-8 (Alt 2001-5) were placed on Rating Watch Negative. The rating agency said the actions stemmed from loss levels and high delinquencies relative to the applicable credit support levels. Fitch's website address is http://www.fitchratings.com.

The National Association of Professional Insurance Agents has asked the Federal Insurance and Mitigation Administration to seek an executive order from President Bush to keep the National Flood Insurance Program operating after Dec. 31.Because Congress adjourned without reauthorizing the program, the NFIP may not be able to issue new policies, which are required for a mortgage loan for homes located within designated flood hazard areas, after the end of the year. The insurance agents and other groups are seeking ways to keep the flood program operating without interruption.

Fitch Ratings has raised Bank of America Mortgage's residential mortgage servicing ratings.BofA's residential primary servicer rating has been upgraded to RPS1 from RPS1-minus for prime quality loans. Fitch also assigned BofA an RPS1-minus rating for servicing alternative-A loans. Bank of America Mortgage has integrated a Greensboro, N.C., consumer loan platform into its Buffalo, N.Y., and Louisville, Ky., servicing centers to promote cross-selling opportunities and increase its focus on customer service and retention, Fitch said. As of Aug. 31, the company serviced $274.4 billion of home loans for more than 2.5 million customers.

Freddie Mac, the Credit Union National Association, and CUNA Mutual Mortgage Corp. have announced an agreement that gives credit unions and their members "unprecedented access" to the secondary mortgage market and the latest mortgage technology.Under the agreement, qualified credit unions will have access to capital markets and portfolio management expertise, "simplified seasoned mortgage sale execution," a secondary market execution with only a single mortgage loan, and a private-label servicing option, the alliance members said. "The great thing about this alliance is that it marries Wall Street money to credit union philosophy," said Daniel A. Mica, CUNA's president and chief executive officer. "It will allow credit unions to use their mortgage portfolios to, in effect, access the capital markets. This is an enormous breakthrough at a time when mortgages have become the fastest-growing area of credit union lending."

The special servicer rating of InterBay Funding LLC, Miami, has been raised from RSS2-minus to RSS2 by Fitch Ratings.The rating agency said the upgrade "reflects InterBay's ability to manage and liquidate nonperforming residential mortgage loans and real estate owned assets utilizing its solid default management expertise and advanced default technology, which are integral components of special servicing." Fitch also cited the company's "experienced management and staff, enhanced loan administration procedures, and strengthened management structure." InterBay's special servicing is performed on portfolios acquired by its parent company, BayView Financial Trading Group. Fitch rates residential servicers on a scale of 1 to 5, with 1 being the highest rating. It can be found online at http://www.fitchratings.com.

Fannie Mae has announced refinements to its Benchmark Securities programs for 2003 and named the members of its core dealer group for Benchmark Notes.The government-sponsored enterprise said it will adopt a flexible syndicate structure for Benchmark Bills auctions under which it will select a core syndicate of 6-10 dealers monthly, while reserving the right to go outside that range. Fannie Mae said it will occasionally engage in buybacks of noncallable Benchmark Securities (except for on-the-run securities in two-, three-, five-, and 10-year maturities), but will limit the buybacks to ensure that a minimum of $4 billion of a specific Benchmark Note and $2 billion of a specific Benchmark Bond will remain outstanding. The members of the GSE's core Benchmark Notes dealer group are: Bear, Stearns & Co. Inc.; Credit Suisse First Boston Corp.; Deutsche Bank Securities; FTN Financial Capital Markets; Goldman, Sachs & Co.; HSBC Securities (USA) Inc.; J.P. Morgan Securities Inc.; Lehman Brothers Inc.; Merrill Lynch & Co.; Morgan Stanley & Co. Inc.; Salomon Smith Barney Inc.; and UBS Warburg LLC. Fannie Mae can be found on the Web at http://www.fanniemae.com.

Conseco has announced that the company and its senior lenders have extended a forbearance agreement that originally was to have expired on Nov. 27.The agreement has now been extended to Jan. 11, 2004 "provided that other customary terms of the agreement are met," Conseco said. Conseco, the parent company of manufactured housing and home equity company Conseco Finance, has been struggling with various financial woes and been trying to sell its mortgage-related subsidiary. Conseco can be found online at www.conseco.com.

Despite the busy home purchase and refinancing market, mortgage insurance volume dropped 3.4% in October from the month before.The Mortgage Insurance Companies of America reported that 186,361 borrowers used private mortgage insurance to buy or refinance a home in October. Insurance-in-force declined 1.09% to $724.7 billion industrywide, according to MICA. On a positive note for the industry, the number of applications for MI policies increased 4.4% in October. The association's website is www.micadc.org.