Servicing

Countrywide Credit Industries Inc., Calabasas, Calif., has reported unaudited earnings of $90.8 million for the fiscal first quarter ended May 31, 30% higher than its earnings of $70 million a year ago.Basic and diluted earnings per share were $0.82 and $0.78, respectively, up from $0.66 and $0.64. The company's board of directors declared a cash dividend of $0.08 per common share for the first quarter, payable July 31 to shareholders of record on July 15, 1998. Countrywide chief executive officer Angelo R. Mozilo said the highlight of the quarter was record fundings of $20.9 billion, up 123% from a year ago. "While this is predominantly a refinance market, purchase mortgage fundings also reached an all-time high of $9.0 billion during the quarter," Mr. Mozilo said. Subprime and home equity loans accounted for 23% of the production sector gain on sale for the quarter and 11% of the sector's pretax profits, he said. The servicing portfolio ended the quarter at $192 billion, and the servicing sector margin declined to "essentially a break-even level" because of an increase in the normal amortization of the servicing asset, Mr. Mozilo said. The company's website address is www.countrywide.com.

Fannie Mae, Freddie Mac, and the Mortgage Bankers Association of America will guarantee up to $8 million in loans to the Mortgage Electronic Registration Systems Inc., a McLean, Va., enterprise that is cooperatively owned by member firms.MERS is trying to jump-start an electronic registry for tracking ownership of mortgage loans and servicing rights. The recapitalization plan, which also includes support from participating lenders, was necessary because MERS backers underestimated how long it would take the industry to implement the electronic registry.

Principal Residential Mortgage Inc., Des Moines, Iowa, has agreed to buy ReliaStar Mortgage Corp., also of Des Moines, for an undisclosed price.ReliaStar currently is a subsidiary of ReliaStar Financial Corp., Minneapolis. The deal will give Principal a servicing portfolio of nearly $40 billion; ReliaStar currently services $7 billion. On a pro forma basis, Principal will become one of the top 20 servicers in the country, according to a list compiled by the Database Products Group of Faulkner & Gray. ReliaStar is a wholesaler with an 800-broker network nationwide. Principal is retail and correspondent lender, purchasing more than $6.1 billion from other lenders last year. Its retail network had production of $950 million.

Hamilton, Carter, Smith & Co., Beverly Hills Calif., is accepting bids on a $69 million servicing portfolio.The average loan balance is $135,000, with a weighted average interest rate of 7.52%. The original loan-to-value ratio is 63%. The loans are concentrated in Illinois. Bids are due June 25.

Delinquency rates on home equity loans and home equity lines of credit fell to two- and three-year lows, respectively, in the first quarter of 1998, according to data released by the American Bankers Association.The delinquency rate on HELs (closed-end seconds) in the first quarter was 1.30% -- an 8-basis-point drop compared with the first quarter of 1997 and a 19-bp decline from the fourth quarter. The last time the HEL delinquency rate was this low was the third quarter of 1996, when it stood at 1.29%. The delinquency rate on HELOCs fell to 0.76% in the first quarter, a 44-bp drop over the past 12 months and a 20-bp drop when compared with fourth quarter numbers. The delinquency rate for HELOCs has not been this low since the second quarter of 1995, when it was 0.75%. The ABA did not distinguish between 'A' credit and subprime borrowers in its quarterly survey. However, a spokesperson said a small portion of the loans were originated to 'B' credit borrowers.

Countrywide Servicing Exchange has a bid deadline of June 18 for three servicing deals.The first is an annual flow purchase agreement for $500 million to $1 billion of annual Fannie Mae, Freddie Mac, and Ginnie Mae servicing. The loans are primarily from California, with a small portion coming from Nevada. The average loan balance is expected to be $165,000 to $185,000. Countrywide is also selling a $135 million bulk package of Fannie Mae, Freddie Mac, and Ginnie Mae servicing with a weighted average note rate of 7.872% and an average loan balance of $90,831. Separately, Countrywide also has a $101 million Ginnie Mae portfolio for sale with the same bid deadline. The weighted average note rate is 8.675%, and the average loan balance is $64,683.

The first mortgage-backed securities deal by Bayview Financial Trading Group, Miami, has been rated by Moody's Investors Service.Bayview Financial Acquisition Trust Mortgage Pass-Through Certificates, Series 1998-1 is backed by performing loans, many of which have had payment problems in the past, Moody's said. All the loans in the portfolio, acquired by Bayview from a variety of originators, were less than 60 days delinquent as of the cutoff date and less than 10% have been delinquent for 90 days or more in the past year, the rating agency said. The senior certificates were rated Aaa and the mezzanine certificates were rated Aa2, A2, and Baa2. Moody's said the rating actions were based mainly on the 15.5% credit support provided to the senior certificates by the subordinate classes.

Countrywide Servicing Exchange is brokering a one-year bulk forward commitment of $300 million to $600 million of Fannie Mae, Freddie Mac, and Ginnie Mae servicing rights on loans concentrated in the Midwest.The average loan balance is about $110,000 on the conventional loans and $90,000 on the Ginnie Mae product. Bids are due June 17. Separately, United Financial Inc., Denver, is brokering a $51 million portfolio of servicing rights on Freddie Mac loans from Texas. The loans have a weighted average interest rate of 7.61% and an average balance of $66,624. Bids are due June 16.

Glen Messina has been named executive vice president and general manager of GE Capital Mortgage Services Inc., Cherry Hill, N.J., a unit of GE Capital Mortgage Corp., Raleigh, N.C. Mr. Messina has served as acting general manager of the subsidiary since January, when Jenne Britell left to serve as a group vice president of GE Capital Global Consumer Finance in Central Europe.Mr. Messina previously served as the company's vice president and chief financial officer. GE Capital Mortgage Services' $93.5 billion servicing portfolio as of March 31 ranked eighth in the U.S. in mortgage servicing volume, according to the Database Products Group, a MortgageWire affiliate.

Norwest Mortgage Corp., Des Moines, whose parent bank is merging with Wells Fargo Bank, San Francisco, will change its name to Wells Fargo Mortgage, NMC president Mark Oman has told MortgageWire.In an exclusive interview, Mr. Oman -- who manages the nation's largest lender/servicer -- called the merger a "win-win" situation for NMC even though Wells, historically, has frowned upon the residential business. Mr. Oman said even though NMC has mortgage origination branches in markets where Wells has bank branches, he does not see any danger of overlap or mortgage-related layoffs. He said that in some cases NMC mortgage employees would move into Wells branches and operate there. Some mortgage analysts expected that, although the combined banks would take the Wells name, the mortgage division would retain the NMC name because of the brand recognition it carries. But Mr. Oman said he likes the Wells name and its "stagecoach brand." Thanks to the merger, he also looks forward to cross-selling new products to "millions of new customers."