Servicing

Two classes of IndyMac Inc. mortgage-backed securities have been downgraded by Fitch IBCA Inc. The rating on IndyMac Inc.(CWMBS) Series 1994-L, Class B3 was lowered from BBB to BB and remains on RatingAlert with negative implications. The rating on Class B5 of the same series was lowered from CCC to D. Class B4 was downgraded to CCC on June 2. The actions stemmed from loss levels and high delinquencies in relation to available credit support, Fitch IBCA said. As of June 25, 1.10% of the pool was more than 90 days past due, and losses totaled $915,543, 0.46% of the initial 1994-L pool. Classes B3 and B4 have 0.75% and 0.01% of credit support, respectively, the rating agency said. Fitch IBCA's website address is http://www.fitchibca.com.

Amresco Inc., Dallas, has announced that it does not expect to make writedowns in the value of its retained interests from securitizations in the foreseeable future.Citing its "conservative" valuation and accounting practices, Amresco "reiterated its confidence" in the value of its retained interests despite increased prepayments in its securitized residential pools in the second quarter. A similar pre-earnings statement on prepayments has been issued by Southern Pacific Funding Corp., Oswego, Ore.

New Century Mortgage Corp., Irvine, Calif., has completed a $474 million securitization, its largest to date.New Century Fixed-Rate Certificates, Series 1998-NC3, consisted of nine classes with pass-through rates ranging from 6.00% to 6.93%, according to the company's parent, New Century Financial Corp. Mortgage properties are located in 46 states, with the heaviest concentrations in California, Texas, and Florida. The deal was underwritten by Salomon Smith Barney. New Century Mortgage will act as master servicer, with Comerica Mortgage Corp. as subservicer.

Southern Pacific Funding Corp., Lake Oswego, Ore., has reported that loan prepayments in the second quarter were "in line with management expectations."SPFC, which also reported "strong growth" in loan originations, said it made the unusual pre-earnings announcement in view of industry concerns about prepayments. "Management does not anticipate any significant adjustments to assets relative to recent loan prepayment experience," the company said. SPFC also announced the signing of a $50 million subordinate and residual financing facility with Nomura Asset Capital Corp. and Nomura Securities (Bermuda) Ltd. SPFC's website address is http://www.sp-funding.com.

Community First Bancshares Inc., Fargo, N.D., has agreed to sell the operating assets of its subprime mortgage lending subsidiary, Equity Lending Inc., to FirstPlus Financial Group Inc., Dallas.The terms of the cash transaction, and another involving the sale of the assets of the company's subprime auto lending subsidiary, were not disclosed. Community First said it will retain approximately $50 million in loans originated by Equity Lending as well as the servicing rights on another $100 million of Equity Lending loans that have been sold. Equity Lending was acquired via Community First's merger with Mountain Parks Financial Corp. in December 1996 and had been classified as a discontinued operation on the company's 1997 financial statements.

Meanwhile, prepayment rates for Fannie Mae non-discount MBS showed little change in the July reporting period, including those for 7%-8% coupons, according to the Bear Stearns Prepayment Commentary.[Click here to see the table.] The Bear Stearns analysts termed the Fannie Mae speeds "extremely muted" in comparison to Ginnie Mae's, increasing only 1.4% for 30-year 7.5s and a mere 0.4% for 30-year 8.0s. "Why the tepid response in these cuspy coupons?" the analysts asked. "Most likely, this is largely noise, a result of minor reporting differences between the agencies." They added, however, that the Fannie Mae 7.5 is "somewhat less burned out" than the Ginnie Mae 7.5. Prepayment rates for discount Fannie Mae MBS showed "solid gains," rising about 20% for 30-year 6.5s. The analysts warned that the calm in the latest Fannie Mae report "masks the potential for higher speeds, particularly in the cusp coupons, and we expect more pressure on conventional 7.5% speeds next month."

Prepayment rates for certain Ginnie Mae mortgage-backed securities have responded quickly to declining interest rates, and "prepayment surprises" may lie ahead, according to the Bear Stearns Prepayment Commentary.Though speeds for Ginnie Mae MBS with coupons of 8% or higher were generally slower or flat, those for lower coupons "show strength across the vintage spectrum," said Bear Stearns analysts Dale Westhoff and Bruce Kramer. [Click here to see the table.] They noted that speeds for the 7.5s have not exceeded their March peaks, but said the quick response to early May's rate declines indicates "substantial pent-up demand" in the 7.5% coupon. "Despite the general downward trend in most prepayment reports since March/April, borrowers are obviously quick to take advantage of refinancing opportunities, however brief they may be," the analysts said. "As we hover at the bottom of the January-July trading range, this suggests that prepayment surprises, particularly in the cusp coupons, may be on the agenda for a few more months."

United Financial Inc., Denver, is brokering the sale of servicing rights on a $219 million portfolio of Fannie Mae/Freddie Mac home loans.The average loan balance is $89,000. The weighted average interest rate is 8.78%. Bids are due July 21.

A national loan servicing portfolio totaling $3 billion in Fannie Mae/Freddie Mac home loans is being brokered by Countrywide Servicing Exchange, Pasadena, Calif. The average loan balance is $127,093 and the weighted average note rate is 7.198%.Bids are due July 16.

Stephen J. Rotella has been named to the newly created position of chief operating officer of Chase Home Finance, a unit of Chase Manhattan Corp. based in Edison, N.J., that deals with mortgages, home equity loans, and manufactured housing.Mr. Rotella, 45, will be responsible for post-production, servicing, technology, and underwriting and will report to Tom Jacob, the chairman and chief executive officer of Chase Home Finance. Mr. Rotella joined the company in 1987 and, over the past seven years, has directed its servicing business. Chase originated $40 billion in residential mortgages in 1997 and has a servicing portfolio of $178 billion.