Origination

Five classes of notes issued by Trainer Wortham First Republic CBO V Ltd., a collateralized bond obligation linked to subprime residential mortgage-backed securities, have been downgraded by Fitch Ratings. The downgrades were as follows: class A-1, from AA to A-minus; class A-2, from A-plus to BBB-minus; class B, from A to B; class C, from BBB-plus to CC; and class D, from BB-plus to C. All the downgraded classes were removed from Rating Watch Negative. The downgrades were attributed to collateral deterioration in the portfolio and underlying exposure to RMBS, of which 35.6% are subprime.

Five classes of notes issued by Commodore CDO II Ltd./Corp., a collateralized debt obligation linked to subprime residential mortgage-backed securities, have been downgraded by Fitch Ratings. The downgrades were as follows: class A-1MM, from A-minus/F1-plus to BBB/F2; class A-2(a), from BBB-minus to BB; class A-2(b), from BBB-minus to BB; class B, from CCC to CC; and class C, from CCC to C. All the downgraded classes were removed from Rating Watch Negative. The downgrades were attributed to "significant collateral deterioration" in subprime RMBS, which constitute nearly half of the portfolio. Fitch can be found online at http://www.fitchratings.com.

Standard & Poor's Ratings Services has downgraded the counterparty credit ratings of three of the country's largest mortgage insurers. The outlook for all three is negative. S&P downgraded Republic International Corp. from A to A-minus, while its counterparty and financial strength ratings on Republic's core subsidiaries were downgraded from AA-minus to A-plus. The rating agency downgraded PMI Group Inc. from BBB-plus to BBB-minus and its U.S. and European MI subsidiaries from A-plus to A-minus. The ratings were placed on CreditWatch with negative implications. S&P also lowered its counterparty rating on Radian Group Inc. from BBB to BB-plus and its ratings on Radian's MI subsidiaries from A to BBB-plus, while removing them from CreditWatch negative. In addition, S&P affirmed its AA ratings on Genworth Financial Inc.'s core mortgage insurance subsidiaries (outlook negative) and its BBB counterparty rating on MGIC Investment Corp. and its A counterparty and financial strength ratings on MGIC's MI subsidiaries (outlook negative). S&P attributed the downgrades to "expectations for further deterioration in key variables that influence claims, our reassessment of the long-term fundamentals of the mortgage insurance industry, our concerns about the profitability of insured mortgages originated in 2008, and our comparisons of firms' actual results for the first half of 2008 with our forecasts." S&P can be found online at http://www.standardandpoors.com.

PBG Financial Services Ltd., an accounting firm based in Northbrook, Ill., has announced the relaunch of Home123 Mortgage in partnership with Central States Mortgage Inc., a credit union service organization based in Wauwatosa, Wis. "Home123 is the first of the national mortgage brands to re-emerge after falling into bankruptcy related to the subprime credit crisis," the companies said. PBG purchased the rights to Home123 Mortgage and related brands from Home123's former parent company, New Century Financial Corp. Central States Mortgage will provide all financial services, including fixed- and adjustable-rate mortgages, refinancing, Federal Housing Administration and Department of Veterans Affairs loans, interest-only loans, reverse mortgages, and others. Central States Mortgage can be found on the Web at http://centralstatesmortgage.com.

National Association of Mortgage Brokers president Marc Savitt says the industry needs to take its message right to consumers about the state of the market to counteract the news media's focus. Speaking on a panel with regional leaders at the NAMB/Southeast conference in New Orleans, Mr. Savitt said the mainstream media are concentrating on "gloom and doom" and are not hearing that housing affordability is back and rates are still low. Brokers need to tell consumers right now that they have a "window of opportunity," he said. Jeff Farnham, president of the Mississippi Association of Mortgage Brokers, said brokers provide "a great service to our communities as well as to our wholesale partners." The president of the Georgia Association of Mortgage Brokers, Walter Moody, added that "every industry goes through a cleansing period" and the mortgage industry is in one now. But those that make it through will be stronger, he said. Sal Berndas, president of the Louisiana Mortgage Lenders Association, said he wished the industry could convey the same message as the Democratic Party, one of hope and change.

The Hope Now alliance says it modified or entered into new payment plans on 192,034 residential loans during July. The group -- which includes mortgage servicers, investors, and credit counselors -- maintains that it has prevented 2.07 million foreclosures since its inception last summer. Of the 192,034 loans worked out, 58% were subprime and the balance were prime. Meanwhile, the alliance -- basing its information on a survey of nine firms controlling 60% of the subprime servicing market -- estimated that 1.1 million subprime mortgages were scheduled to reset between January and July of this year. At deadline time, the group was holding a news conference about its results.

Starting Oct. 1, the Federal Housing Administration says it will charge homebuyers a 1.75% upfront mortgage insurance premium on single-family loans and a 3% upfront premium on FHA Secure loans for delinquent borrowers. Borrowers with loan-to-value ratios above 95% will pay a 55-basis-point annual premium. Borrowers with LTVs of 95% or less will pay a 50-bp annual premium. A recently passed housing bill requires the FHA to abandon risk-based pricing for 12 months. So the agency has notified lenders that it is temporarily returning to standard pricing. Before July 14, the FHA charged a 1.5% upfront premium and a 50-bp annual premium on all single-family loans. The agency is raising the premiums to reflect higher loss rates and higher risks of refinancing delinquent borrowers. The upfront premium for existing FHA borrowers to refinance will remain at 1.5%.

Carteret Mortgage Corp. of Virginia, a large net branch operator that caters to loan brokers, is closing its doors, sources have told MortgageWire. At deadline time, Carteret chief executive Eric Weinstein could not be reached for comment. Officers listed in Carteret's company directory, and some of its net branch managers, did not respond to telephone calls from MW. According to the Mortgage Industry Directory, Carteret originated $2.84 billion of loans in 2006 and $3.4 billion the year before. No figures were available for 2007 and 2008. Carteret also facilitated the origination of reverse mortgages. Its telephone switchboard was reverting to an automated directory Wednesday, and its operator was not picking up. The company, based in Centreville, Va., can be found online at https://www2.carteretmortgage.com.

Fitch Ratings has downgraded two classes of notes from two collateralized debt obligations issued by Blue Heron Funding and backed partly by subprime residential mortgage-backed securities. The class B notes of Blue Heron Funding V Ltd. and Blue Heron Funding IX Ltd. were downgraded from A-minus to C and removed from Rating Watch Negative. Fitch also affirmed the ratings on the certificates issued by the two transactions. The rating agency attributed the downgrades to "significant collateral deterioration" in the portfolios' subprime RMBS, structured finance CDOs with underlying exposure to subprime RMBS, and (in the case of Blue Heron IX) alternative-A RMBS.

Franklin Credit Management Corp., a New York-based company that buys, manages, and sells subprime residential mortgage assets, says it has received a notice of delisting from the NASDAQ Stock Market. The company said trading of its common stock will be suspended at the opening of business on Aug. 29 unless it requests an appeal of NASDAQ's determination, which it said it "expects" to do. The delisting would be based on the failure of Franklin's stock to maintain a minimum bid price of $1 per share. The company said it was notified on Feb. 20 that the stock had failed to maintain the minimum bid price for the preceding 30 business days, and it was given 180 calendar days to regain compliance for at least 10 consecutive trading days. Franklin Credit can be found on the Web at http://www.franklincredit.com.