Origination

Standard & Poor's Ratings Services has downgraded 77 classes of mortgage pass-through certificates from 22 U.S. subprime residential mortgage-backed securities deals from various issuers. S&P also affirmed the ratings on 235 other classes from the transactions and 16 additional deals. With the exception of two classes from different transactions that experienced principal writedowns, S&P said it downgraded the securities due to credit support and projected credit enhancement, based on the dollar amount of loans in the delinquency pipelines of the affected deals. In recent months, these deals have experienced deterioration in credit support and "the delinquency pipelines indicate that the pattern of losses could continue," the rating agency said.

Standard & Poor's has announced that LaSalle Hotel Properties, a real estate investment trust based in Bethesda, Md., will replace USANA Health Sciences Inc. in S&P's SmallCap 600 Index. S&P said the move, scheduled to occur after the close of trading on July 14, was prompted by the fact that USANA is being taken private by an investor group led by its senior management.

LandAmerica Financial Group, Richmond, Va., has announced that its recently reported merger of two title insurance subsidiaries in Colorado is part of a new business model that will reduce the number of "bricks-and-mortar" locations in the state. The company recently announced that it was merging its Transnation Title Insurance Co. subsidiary into its Lawyers Title Insurance Corp. subsidiary as part of an effort to transform its independent businesses into a unified operating company. Theodore L. Chandler, chairman and chief executive officer of LandAmerica, said the company is improving its service capabilities in Colorado while reducing reliance on fixed-cost physical locations. "There are features of this approach that may well be appropriate for other markets and may facilitate further office consolidations over time," Mr. Chandler said. LandAmerica can be found online at http://www.landam.com.

FHM Mortgage Group LLC, a mortgage broker based in Parsippany, N.J., has announced that it is joining forces with collection agencies to help overextended homeowners resolve their past-due debts. FHM president Nick Mastrandrea said he established the company with the goal of serving as an ally of the collections industry. "To make that partnership a reality, we've built a state-of-the-art call center with experienced loan officers prepared to accept inbound calls from collection staff and their customers," he said. The company can be found on the Web at http://www.fhmmortgagegroup.com.

Wachovia has announced that it expects to lose between $2.6 billion and $2.8 billion in the second quarter, after reporting a $350 million loss in the first quarter. The company took a $4.2 billion loan-loss reserve provision, of which $3.3 billion is related to its now-discontinued negative amortization, payment-option, adjustable-rate "Pick-a-Pay" product. Chargeoffs for the second quarter include $500 million related to the neg-am portfolio and $280 million related to commercial real estate. The company said it expects to record a goodwill impairment charge during the quarter, but the amount is yet to be determined. (The goodwill losses are not included in the projected loss.) Wachovia added the Pick-a-Pay product when it purchased Golden West Financial Corp. The bank, which is based in Charlotte, N.C., can be found on the Web at http://www.wachovia.com.

Class L of GMAC Commercial Mortgage Securities Inc. series 1998-C2 has been downgraded from CCC/DR1 to CC/DR3 by Fitch Ratings. The downgrade is the result of an increase in specially serviced assets and loss expectations since Fitch's last rating action, the rating agency said. The pool includes nine specially serviced assets on which significant losses are expected, Fitch said. The rating agency can be found online at http://www.fitchratings.com.

Ten classes of commercial mortgage pass-through certificates from LB-UBS Commercial Mortgage Trust 2006-C7 have been downgraded by Standard & Poor's Ratings Services. S&P also affirmed the ratings on 15 classes in the transaction. The downgrades were attributed to: concerns about 12 loans that have reported debt service coverage below 1.0x, the expected erosion of credit support for the two specially serviced loans, and concerns about the eighth-largest loan. The rating agency can be found online at http://www.standardandpoors.com.

The issuer default rating and outstanding debt ratings of Sovran Self Storage Inc., a real estate investment trust based in Buffalo, N.Y., and Sovran Acquisition LP have been affirmed at BBB-minus and removed from Rating Watch Negative by Fitch Ratings. Fitch said the action was based on Sovran's entry into financing arrangements totaling $375 million that "provide Sovran renewed availability under its revolving credit facility, improve the company's liquidity, and address near-term debt maturities." Sovran can be found on the Web at http://www.sovranss.com.

Fulbright & Jaworski LLP has announced the formation of a Global Subprime and Credit Crisis Practice Group. The law firm said the group would address the needs of financial institutions, brokerage firms, title companies, corporate directors and officers, and public accounting firms. Fulbright said five co-heads from various disciplines have been designated to steer the practice group: Rodney Acker, a financial institutions litigator in Dallas; David Barrack, a bankruptcy litigator in New York; Anne Rodgers, a securities and complex commercial litigator in Houston; Richard Smith, a white collar defense and government investigations litigator in Washington, D.C.; and Chris Warren-Smith, a financial disputes and investigations lawyer in London. "Issues similar to those we now face with the subprime fallout date back to the late 1980s when many of our lawyers were handling litigation involving the failed savings-and-loan industry," said Stephen C. Dillard, the head of Fulbright's Global Litigation Department. "This is an area where we can offer our clients the advice and experience they need to successfully deal with the subprime collapse." The international law firm can be found online at http://www.fulbright.com.

Wells Fargo Home Equity is no longer accepting new applications with a combined loan-to-value ratio greater than 80%, thus reducing its equity loan-to-value ceiling by 5% across the board, according to Wells Fargo & Co., San Francisco. The bank said it would stop accepting submissions of stand-alone transactions with a CLTV greater than 80% on July 12, and advised that all simultaneous Wells Fargo transactions with a CLTV greater than 80% should be registered before July 12. "Exceptions to the 80% maximum will not be allowed," the bank said. Wells Fargo also announced guideline information tips for investors, effective July 14, "for all conventional conforming loans." It included a six-month seasoning requirement for cash-out refinances, among others.