Fannie, Berkadia Reach Pact on Conseco

Fannie Mae has confirmed that it has reached an agreement with Berkadia Equity Holdings Inc. to service the manufactured housing securities the agency owns or guarantees from Conseco Finance, St. Paul, Minn.Berkadia is a venture between Berkshire Hathaway, Omaha, Neb., and Leucadia National Corp., New York, that lost the bidding war for Conseco Finance to CFN Investment Holdings LLC. A Fannie Mae spokeswoman said Berkadia has agreed to use Fannie Mae's servicing protocol. In return, Fannie Mae agreed to waive the securitization adequate protection lien, to increase the servicing fee to 125 basis points, and to designate only Berkadia as the successor servicer. Attempts to reach an agreement with CFN were not successful, she added. Fannie Mae owns or guarantees close to $10 billion in manufactured housing securities, and Conseco Finance services 70% of those, the spokeswoman said. CFN consists of J.C. Flowers & Co. LLC, Birmingham, Ala., and Fortress Investment Group LLC and Cerberus Capital Management, both of New York. The transaction still needs the approval of the Bankruptcy Court for the Northern District of Illinois in Chicago.