Servicing

Freddie Mac purchased a record $73.6 billion in mortgages in October, doubling its volume from the same month a year ago.On a year-to-date basis, the secondary giant has acquired $476.8 billion in mortgages and is well on its way to cracking the $600 billion mark in purchases this year. Unlike its chief competitor, Fannie Mae, Freddie Mac managed to expand its portfolio in October. (Fannie's portfolio shrank by a meager 0.1% during the month. Fannie Mae is the larger of the two secondary giants.) At the end of October, Freddie's portfolio totaled $536.4 billion, a 12.9% increase from the same period a year ago. However, earlier this year Freddie did suffer from two consecutive months of portfolio contraction -- back in April and May. Thanks to the lowest mortgage rates in 40 years, both secondary agencies are due to have record years but have also been plagued by tremendous portfolio run-off. Freddie's purchase commitments slipped to $27.5 billion in October from $34.8 billion in September.

Crescent Banking Co., Jasper, Ga., has reported adjustments totaling $10.6 million in its mortgage banking operations as a result of overstatements of its gains on the sale of mortgage servicing rights and the value of mortgage loans held for sale.Crescent said the adjustments resulted from a review of its internal controls. As a result of inconsistencies between its mortgage banking software system and its MSR valuations, the gains on sale of MSRs had been overstated by approximately $3.9 million, the company said. In addition, it found a "potential overstatement" of mortgage loans held for sale totaling about $6.7 million. On an after-tax basis, the adjustments are expected to reduce the company's shareholders' equity by about $5.2 million as of Sept. 30, Crescent said. The company added that it expects to restate its previous financial statements to reflect the changes. Crescent can be found online at http://www.crescentbank.com.

Fannie Mae acquired a record-breaking $114.1 billion in mortgages during October, its best purchase month ever, although its portfolio shrank once again.(National Mortgage News/MortgageWire measures Fannie's purchases by adding its portfolio purchases and its "total lender originated MBS.") Fannie measures its monthly purchases through a data point called "business volume." The company's business volume in October also set a new record -- $95.1 billion, a $16 billion improvement from that of September, which was also a great month. Retained commitments at the secondary giant increased to a record $67.3 billion, which means November's purchase figures will be stellar as well. However, October's data set reveals that the company's mortgage portfolio actually shrank in October (by 0.1%) from September's level, and that its portfolio also shrank back in June (compared with May) by 0.5%. Fannie Mae reduced its duration gap to negative-six months in October, compared with negative-10 the previous month.

U.S. Bank Home Mortgage has announced the promotion of Michael Norris, Robert Smiley, and Maria Zoglman to various executive posts.Mr. Norris has been named executive vice president of U.S. Bank Home Mortgage and managing director of The Leader Mortgage Co., a subsidiary of U.S. Bank NA. He will relocate to Cleveland to oversee the integration of Leader into U.S. Bank. Mr. Smiley was named senior vice president and loan administration manager of U.S. Bank's Mortgage Loan Servicing Center in Owensboro, Ky. Ms. Zoglman was named vice president and cash and reconciliation manager at the loan servicing center. U.S. Bank can be found on the Web at http://www.usbank.com.

Walter "Terry" Klein, formerly president and chief executive officer of First Nationwide Mortgage Corp., has joined Ocwen Technology Xchange as its executive vice president and national sales manager.Mr. Klein has also served as chairman and CEO for both Sears Mortgage Corp. and PNC Mortgage. In his new role, Mr. Klein will be responsible for leading OTX's sales initiatives for OTX products such as REALTrans, REALServicing, and REALSynergy. Arthur Ringwald, OTX's president and CEO, said Mr. Klein's servicing experience "rounds out the mortgage origination, default management, and special servicing experiences of the OTX senior management team." OTX can be found on the Web at http://www.otx.com.

Irwin Financial Corp., Columbus, Ind., has reported a downward revision of its third-quarter and year-to-date net income to reflect an additional impairment to the mortgage servicing rights of its commercial banking business.The revision, which totaled $800,000 ($0.03 per share), brought earnings down to $8.2 million ($0.29 per share) for the third quarter and $26.1 million ($0.96 per share) for the first nine months of this year. "The additional impairment is the result of unprecedented and unexpected levels of residential mortgage loan originations in the commercial line of business over the past two years, largely driven by refinancing activity," Irwin said. The company said it had determined that the carrying value of its $328 million of conventional first mortgages should be reduced by $1.3 million to a total of $1.8 million. The earnings revision did not affect the mortgage servicing rights of Irwin's mortgage banking business, which remained unchanged, and the company reaffirmed its earnings forecasts for 2002 and 2003. Irwin can be found online at http://www.irwinfinancial.com.

The mortgage industry dodged a bullet when the Financial Accounting Standards Board decided Nov. 12 to change course in finalizing its special-purpose entity rule and essentially excluded investors and guarantors of mortgage-backed securitizations from its test for consolidation.FASB decided that no party to a securitization that qualifies under FAS 140 as a qualified special-purpose entity has to consolidate if the transferor of the assets does not have to consolidate. "This a 180-degree reversal of FASB's decision at its Oct. 30 meeting which would have resulted in non-transferor B-piece investors holding first-loss positions in a qualifying SPE being required to consolidate the QSPE," according to the Commercial Mortgage Securities Association. One B-piece investor said the Oct. 30 decision would have increased his firm's reportable assets from $3 billion to $60 billion. "We helped clarify the issues, and FASB gave us helpful guidance," said Robyn Stern, who chairs the CMSA's regulatory committee. Ms. Stern is with Ernst & Young in New York.

The residential mortgage-backed securities group of Fitch Ratings has introduced issuer securitization performance reports, citing investor interest in more comprehensive performance measures in the jumbo market.The reports focus on Fitch's view of the improvement in collateral composition and the comparative performance of an issuer's jumbo product from 1996 to 2001. They also compare the subordinate bond performance of an issuer with Fitch's rating expectations. In addition, Fitch briefly covers the issuer's securitization history -- including shelf registration designations, origination volumes, and Fitch rating history -- and provides a history of all rating changes that will support current credit enhancement levels. To date, Fitch has published two reports that cover the securitization performance of GMAC-RFC's RFMSI (dated July 30) and CitiMortgage's CMSI (dated Nov. 7).

Thirteen classes of Oakwood Manufactured Housing Transactions have been downgraded by Fitch Ratings.The rating agency also affirmed eight limited-guarantee bonds and 86 classes in Oakwood transactions. The downgrades were as follows: B-2 classes of series 1996-A, 1996-B, 1996-C, and 1998-C, from BB to CCC; B-1 classes of series 1997-D, 1998-B, 1999-E, and 2000-A, from BBB to BBB-minus; class B-2 of series 1998-C, from BB to CCC; B-1 classes of series 1999-A and 1999-B, from BBB to BB; class B-1 of series 1999-C, from BBB-minus to BB-plus; and B-2 classes of series 1999-E and 2000-D, from BB to B-minus. "The rating actions reflect the deteriorating performance of the manufactured housing pools as well as recent changes in Oakwood's servicing practices, which have caused losses to increase rapidly," Fitch said. Oakwood recently discontinued its Loan Assumption Program, under which it had avoided repossessing homes by finding other borrowers to assume monthly payments, and now its defaults and its repossession inventory have increased significantly, Fitch said. The rating agency can be found on the Web at http://www.fitchratings.com.

To celebrate the company's new name and ticker symbol, executives of Countrywide Financial Corporation rang the bell to open trading on the New York Stock Exchange Wednesday morning.The company, formerly Countrywide Credit Industries, now trades under the symbol CFC on the NYSE. Stanford Kurland, Countrywide's executive managing director and chief operating officer, told MortgageWire that the change reflects growth in Countrywide's diversification businesses, including its commercial bank, its securities operation, and the insurance segment of its business. "Certainly, we want to open the eyes of the investor community to our diversification," he said.