Servicing

C-BASS has entered the seller-financed mortgage market by acquiring Wynwood Inc. and South Plains Mortgage Inc. C-BASS said the Tacoma, Wash.-based Wynwood is the nation's largest servicer of seller-financed mortgages and South Plains, located in Midland, Texas, is a leading buyer.Seller-financed mortgages are loans originated when the seller of a property accepts a mortgage note directly from the buyer. "C-BASS will combine our existing capabilities in servicing and securitizing residential mortgage loans with the data and customer relationships of Wynwood and the purchasing expertise of South Plains Mortgage," said C-BASS CEO Bruce Williams. C-BASS's specialty servicing company, Litton Loan Servicing, will provide collection and loss mitigation services for owners of seller-financed notes, Mr. Williams said.

Standard & Poor's has affirmed its ratings on Ocwen Financial Corp., West Palm Beach, Fla., in the wake of Ocwen's announcement that it had taken a prepayment-linked $77.6 million writedown in the second quarter, resulting in a net loss of $37.9 million.Ocwen reported that "unprecedented" prepayment levels and "a continued inversion in the shape of the yield curve" had caused it to write down the book value of its interest-only and inverse IO securities and to "discontinue this investment activity." S&P attributed its rating action to Ocwen's continued strength. "Although the realized loss in the IO portfolio represented nearly 15% of consolidated capital, capital levels remain commensurate with the company's rating and credit profile," S&P said, citing high internal capital generation and strong financial performance from core operations. S&P also noted Ocwen's announcement that it has engaged an investment bank to identify strategic partners for further expansion of its core business lines. S&P's website address is http://www.ratings.standardpoor.com.

The triple-A ratings on two series of mortgage revenue bonds issued by the Prince Georges County [Md.] Housing Authority have been placed on CreditWatch with negative implications by Standard & Poor's.The affected bonds are the authority's mortgage revenue refunding bonds (GNMA collateralized; Regent Street Station), Series 1993A and its taxable mortgage revenue refunding bonds (GNMA collateralized; Regent Street Station), Series 1993B. The actions stemmed from the fact that the successor trustee, the Bank of New York, did not have sufficient funds set aside to carry out the July 29 scheduled redemption of all outstanding bonds, S&P said. "Although the trustee does not currently have the funds, the bank expects to be able to provide the funds or obtain the monies through another source," the rating agency said. The redemption is the result of a mortgagor default on the mortgage note, which caused a prepayment of the Ginnie Mae security. S&P said the proceeds from the Ginnie Mae security were not used to redeem bonds, as provided for in the trust indenture, but were reinvested at a rate below the bonds' true interest cost. S&P's website address is http://www.ratings.standardpoor.com.

Midland Loan Services Inc., Kansas City, Mo., has closed a $1.2 billion securitization of commercial mortgages, the first joint deal with its new parent company, PNC Bank Corp. Midland said the deal is important because "it is one of the first times an issuer has successfully combined loan origination, servicing, and subordinate CMBS investing under one roof."In the transaction, Commercial Mortgage Acceptance Corp. Series 1998-C1, Midland and PNC Bank pooled their loans, with Midland acting as depositor and PNC Capital Markets Inc. as selling agent. In addition, Anthracite Capital -- a real estate investment trust sponsored by BlackRock, an affiliate of the bank -- agreed to acquire the subordinate bonds. The securities were backed by 322 fixed-rate commercial and multifamily mortgages secured by properties in 39 states, with the highest concentrations in California, Pennsylvania, and New Jersey. Midland will be the master and special servicer on the transaction. Morgan Stanley Dean Witter was the lead underwriter.

IMC Mortgage Co., Tampa, Fla., has reported earnings of $16.3 million ($0.47 per share) for the second quarter, up 52% from $10.7 million ($0.36 per share) a year ago.Loan originations totaled $1.9 billion, up 39% from $1.4 billion a year ago. IMC delivered $1.6 billion of loans into securitizations and $274 million into whole loan sales for the quarter, the company said. The serviced loan portfolio totaled approximately $9.4 billion as of June 30, up from $4.0 billion a year earlier. Loans delinquent more than 30 days (including those in foreclosure or bankruptcy) represented 7.43% of the portfolio as of June 30, compared with 7.29% on March 31, IMC said.

United Companies Financial Corp., Baton Rouge, La., has reported net income of $4.3 million ($0.13 per share) for the second quarter, down 82% from $23.8 million ($0.73 per share) a year ago.Home equity loan production totaled $802.5 million for the quarter, up 14% from $703.4 million a year ago, while total loan production was $968.6 million, up from $756.9 million, UCFC said. The earnings figure fell within the $3-5 million range the company predicted July 21 when it announced the retention of Salomon Smith Barney to assist in seeking a "strategic partnership." The falloff in earnings was attributed partly to a prepayment-related $10 million charge to the value of UCFC's interest-only and residual certificates. As a result of the July 21 announcement, UCFC's ratings were placed under review by Standard & Poor's and Duff & Phelps Credit Rating Co. UCFC's website address is http://www.unitedcompanies.com.

Mortgage refinancings and debt consolidation loans will help stop the rise in personal bankruptcies this year, according to SMR Research Corp., Hackettstown, N.J. SMR projects that the number of personal bankruptcy filings will be flat this year after hitting a record 1.33 million in 1997 and decline slightly in 1999, largely because of low interest rates that make refinancing possible."Refinancing reduces their debt service payments and it frees up that money for other uses -- auto loans and credit cards," said Leigh Smith, SMR vice president for data products. Lower interest rates also help consumers with adjustable-rate mortgages, he said. However, the consumer finance research group believes that bankruptcies will hit record levels again once interest rates go up. "Other than interest rates, all the other basic drivers behind bankruptcy look worse," SMR president Stuart Feldstein said.

Standard & Poor's, New York, has placed seven tranches of Merrill Lynch Mortgage Investors Inc. Commercial Mortgage Pass-Through Certificates, Series 1998-C1-CTL on CreditWatch with negative implications.Classes A-1, A-2, A-3, B, C, D, and E are affected by the action. (Moody's Investors Service has placed nine classes from the series under review for possible downgrade.) The action followed the downgrade of Allegheny General Hospital in Pennsylvania from A to B and Graduate Health Systems Obligated Group (now Allegheny Centennial Hospital) from BB to CCC, both of which remain on CreditWatch with negative implications. The affected pass-through certificates total $570.3 million and are secured by credit tenant leases from 105 mortgage loans, S&P said. Allegheny General is a lease guarantor for two mortgages totaling $102.5 million, about 15.9% of the pool. S&P said it is evaluating the status of the construction, the escrow account balance, the implication of the credit downgrades, and the possibility of a lease default. S&P's website address is http://www.ratings.standardpoor.com.

New Century Mortgage Corp., Irvine, Calif., has completed the assumption of all servicing functions previously performed by Comerica, New Century Financial Corp. has announced.As of June 30, New Century Mortgage's servicing portfolio totaled $2.3 billion, including $281 million in interim servicing and $581 million in loans that continue to be serviced by Advanta. New Century Financial, a subprime lender and servicer, is the parent of New Century Mortgage. Brad Morrice, vice chairman and president of New Century Financial, said the company believes the conversion "will enable us to better control the performance of our residual assets as well as improve servicing profitability in future periods."

Moody's Investors Service, New York, has placed nine tranches of Merrill Lynch Mortgage Investors Inc. Commercial Mortgage Pass-Through Certificates, Series 1998-C1-CTL under review for possible downgrade.Classes A-1, A-2, A-3, A-PO, B, C, D, E, and IO are affected by the action. Two mortgage loans in the pool totaling approximately $102.5 million are secured by properties leased to Allegheny General Hospital, whose debt rating was lowered from Baa2 to B1 on July 21. That action was prompted by the decision of Allegheny Health and Education Research Foundation, the hospital's parent, to seek Chapter 11 bankruptcy protection, Moody's said. The rating agency's website address is http://www.moodys.com.