Servicing

Home loan applications decreased slightly in the week ending November 22, according to the Mortgage Bankers Association of America.The trade group's index of all mortgage loan applications fell 5.8% to 1131 during the week. However, the lending index was still up 79.8% from the same week a year earlier. The MBA's home purchase index actually increased during the week, while the refinancing index fell to 5672. It was the eighteenth consecutive week that the refinance index was above 4000, and refinancing still accounted for nearly 77% of all loan applications. The MBA's website is at www.mbaa.org.

Fannie Mae and Freddie Mac will reach a little deeper into the mortgage market next year when they raise the ceiling on single-family home loans they can purchase or securitize to $322,700.The 7.33% increase from $300,700 this year isn't as great as expected. "Prices bounce around from month to month," said Tim Forsberg of the Federal Housing Finance Board. "I guess we got 'em on the downside." Increases in the conforming loan limit are based on the board's survey of housing costs from one October to the next in 31 major markets. The average this October was $235,700, compared with $219,600 a year ago. But just a month earlier, the change was even more dramatic, with prices rising 8% -- from $219,900 to $237,600 -- over the 12-month period. Nevertheless, the two government-sponsored enterprises say as many as 250,000 higher-end home buyers and owners will reap the rewards of somewhat lower interest rates starting Jan. 1. Currently, Fannie's and Freddie's combined loan purchases represent an estimated 64% of total industry production, according to the Quarterly Data Report, a MortgageWire affiliate. In addition, the Federal Housing Administration is expected to raise the limit on loans it can insure to $280,749 in high-cost markets and $154,896 is most other places.

Oakwood Homes Corp., the bankrupt Greensboro, N.C.-based builder and financier of manufactured homes, has received $415 million in various lines of credit.This includes $215 million of debtor-in-possession financing from Berkshire Hathaway Inc., Greenwich Capital Financial Products Inc., and Ranch Capital LLC. The DIP includes a $75 million loan servicing advance line. In addition, the company has negotiated an agreement for continued access to its $200 million loan-purchase facility, allowing it to continue to originate as usual. An agreement has been reached with Berkshire Hathaway, its largest senior unsecured creditor, for the Warren Buffett-controlled firm to become the largest shareholder in Oakwood when it emerges from bankruptcy.

The ratings on 42 classes of 33 home equity loan deals by Conseco Finance Corp. (formerly Green Tree Financial Corp.) have been placed on Rating Watch Negative by Fitch Ratings.The actions reflect concerns about certain servicing practices used by Conseco on its HEL portfolio, as well as Conseco's "extremely weak financial profile," Fitch said. While the home equity deals' performance has largely met Fitch's expectations, the servicing practices -- such as loan extensions and deferrals -- "may have portrayed more favorable performance than is actually the case," the rating agency said. The practices have been used to modify about 36% of the company's home equity portfolio, and "may only be a way of delaying losses," Fitch opined. The rating agency can be found online at http://www.fitchratings.com.

Charter Municipal Mortgage Acceptance Co., New York, has reported the private placement of 575,705 Series A Convertible Community Reinvestment Act Preferred Shares with an unnamed financial institution at $17.37 per share.Net proceeds of the offering will be used mainly to buy additional tax-exempt revenue bonds secured by multifamily housing properties. CharterMac said it believes, based on a legal opinion, that an investment in CRA Preferred Shares allows financial institutions to "receive positive consideration" under the CRA investment test. "Through a proprietary allocation methodology developed by CharterMac, these financial institutions are able to trace their investment to specific affordable housing properties financed by CharterMac that are located in the financial institutions' self-defined geographic CRA assessment area," the company said. CharterMac, which invests in and services multifamily housing debt, can be found online at http://www.chartermac.com.

Proposed guidelines for quotation and trading of U.S. government agency debt securities that contain a "European-style" call option have been released by The Bond Market Association.The association said the draft guidelines were designed to allow market participants to more quickly quote and trade the securities and "compare securities offered on different trading platforms using a single yardstick." The European-style call option, which is used globally, is generally a one-time option to call in and retire a security on a specific date.

The issuance of mortgage-related securities appears poised to surpass the annual record of $1.67 trillion set in 2001, according to The Bond Market Association.Real estate finance securities -- including agency and private-label pass-throughs and collateralized mortgage obligations -- were up 39.4% between Jan. 1 and Sept. 30. A total of $1.54 trillion worth of such securities were issued in the first three quarters of 2002, compared with $1.10 trillion in the same period of last year. The association's website address is http://www.bondmarkets.com.

Ginnie Mae's mortgage-backed securities program has hit the $2 trillion threshold, according to the Department of Housing and Urban Development.That means that more than 27 million families have accessed lower-cost mortgage financing since Ginnie Mae was launched in 1968, said Ginnie Mae president Ronald Rosenfeld. GMAC Commercial Mortgage originated the milestone security that pushed Ginnie Mae past the $2 trillion mark. The government-owned corporation can be found online at http://www.ginniemae.gov.

All classes of 18 Oakwood manufactured housing securitizations have been placed on Rating Watch Negative by Fitch Ratings in the wake of a Nov. 15 Chapter 11 bankruptcy filing by Oakwood Homes.The filing came just days after Fitch downgraded 13 classes of Oakwood's manufactured housing deals. At the time, the rating agency cited Oakwood's recent discontinuation of its Loan Assumption Program and said its defaults and its repossession inventory had increased significantly. Fitch now says it is "unclear" what the effect would be on pool performance of a disruption or potential transfer of servicing due to the bankruptcy filing. "The limited number of manufactured housing servicers, as well as the limited interest from mortgage servicers in acquiring the servicing rights to this unique asset, make these securitizations particularly vulnerable," Fitch said. The following series were placed on Rating Watch Negative: 1994-A; 1995-A and B; 1996-A, B, and C; 1997-A, B, C, and D; 1998-B and C; 1999-A, B, C, and E; and 2000-A and B. The rating agency can be found on the Web at http://www.fitchratings.com.

Fannie Mae has announced the appointment of seven executives, including three that required a vote of its board of directors.The trio elected by the board are: Peter Niculescu, executive vice president for mortgage portfolio business; Donald Remy, senior vice president and deputy general counsel; and David Flaxman, chief e-solutions technology officer for Fannie Mae's e-business. The other new appointments were: Randall Bendine, vice president and chief credit officer for multifamily; David Magidson, vice president for finance and portfolio systems; Bradford Martin, vice president for risk-based capital; and Christine Wolf, vice president for compensation and benefit. Mr. Niculescu was previously Fannie Mae's senior vice president of portfolio strategy, and he formerly worked for Goldman Sachs. Mr. Remy was vice president and deputy general counsel, and previously worked for the U.S. Department of Justice. Mr. Flaxman joins Fannie Mae from Answerthink, a systems integration and management consulting firm he co-founded. Fannie Mae can be found on the Web at http://www.fanniemae.com.