Fannie Fishing for C-BASS

Congressionally chartered mortgage giant Fannie Mae has expressed interest in buying C-BASS LLC and its "scratch-and-dent" servicing affiliate, Litton Loan Servicing, Houston, industry sources have confirmed to MortgageWire."They've been working on this for at least two months," said one source familiar with the matter. The source, requesting anonymity, described Fannie's motivations as "charter creep." According to the Quarterly Data Report, Litton Loan Servicing ranks 12th among subprime servicers, with $46 billion in receivables. Two weeks ago, when Fannie Mae chief executive Daniel Mudd was asked by reporters about Litton, he declined to comment. In early August C-BASS was hit by margin calls from its lenders, forcing its two mortgage insurance company owners to write down its value by more than $1 billion. Earlier this year, C-BASS bought Fieldstone Mortgage, Columbia, Md., a nondepository, nonprime lender that has suspended originations.