Origination

Stewart Title of California, San Diego, has announced the creation of the Stewart Title Absolute Rate, which represents a reduction in its base title insurance rates. "The S.T.A.R. is lower and simpler than the previous bundled and short-term rates and offers significant savings for refinance transactions that meet specific criteria," the company said. The new rate is available only when all title-related documents are conveyed electronically to all the parties. Stewart said it has also reduced its residential title insurance rate and its basic rate for commercial, agricultural, industrial, and other related properties. Stewart Title of California is a wholly owned subsidiary of Stewart Information Services Corp., which can be found online at http://www.stewart.com.

North River Investment Management LLC, New York, has announced the launch of its first commercial real estate private equity fund with $100 million of committed capital. The fund, North River Opportunity Partners I LP, will initially buy discounted pools of commercial mortgage debt and originate first-mortgage and mezzanine loans on high-quality commercial real estate properties, the company said. "The fund will pursue investment strategies designed to capitalize on opportunities created by turmoil in the global credit markets," North River Investment said.

Anthony Hsieh, an entrepreneur and veteran of the financial services industry, has announced the formation of Grander Financial, Irvine, Calif., which he says is the first full-service consumer finance company to offer a variety of alternatives to mortgages. Grander's flagship product, My Equity Freedom, allows homeowners to receive cash based on the equity they have built without making monthly payments. The company said the product enables Grander to "share in the appreciation (or depreciation) of the home" while providing cash to the homeowner. "We have created a new financial model for homeowners, eliminating the costly need of a traditional mortgage," Mr. Hsieh said. ".... The option of maximizing one's equity with a cash advance without having to incur mounting interest or monthly payments is truly revolutionary to the housing and lending market."

A forward-looking indicator of existing-home sales rose 6.3% in April, its highest level since October, according to the National Association of Realtors. The NAR's Pending Home Sales Index, which is based on sales contracts signed in April, rose to 88.2 in April from 83.0 in March. On a year-over-year basis, the index was down 13.1%. "Bargain hunters have entered the market en masse, especially in areas that have experienced double-digit price declines, but it's unclear if they are investors or owner-occupants," NAR senior economist Lawrence Yun said. "Sharp price reductions are leading to a quicker discovery of price equilibrium points. The West is already seeing year-over-year gains in pending contracts." The NAR can be found online at http://www.realtor.org.

Jeff Walton has been named chief executive officer of Accredited Home Lenders Holding Co., a troubled San Diego-based subprime lender that recently confirmed an undisclosed number of layoffs. Mr. Walton replaces Jim Moran, who has served as interim CEO since February 2008. A veteran of 25 years in the mortgage industry, Mr. Walton was previously president, CEO, and senior managing director of Bear Stearns Residential Mortgage Corp., Accredited said. Before launching BSRMC, he served as president of the mortgage division for First National Bank of Arizona and First National Bank of Nevada. Accredited, once a top-ranked publicly traded subprime lender, was sold last fall to Lone Star, a private equity fund. Accredited can be found on the Web at http://www.accredhome.com, and Lone Star can be found at http://www.lonestarfunds.com.

Nearly 100 classes of subprime mortgage pass-through certificates from seven issuers have been downgraded by Fitch Ratings. The affected securities were as follows: 31 classes from 10 Lehman-related deals; 25 classes from eight Credit Based Asset Servicing and Securitization LLC deals; 11 classes from three Asset Back Funding Corp. deals; 10 classes from three Residential Funding Mortgage Securities II deals; nine classes from four GE Capital home equity deals; seven classes from five Saxon deals; and three classes from one Fremont Home Loan Trust deal. Fitch also placed four classes on Rating Watch Negative and affirmed the ratings on over 130 classes from more than 60 subprime transactions.

The ratings of 259 certificates from 50 subprime mortgage-backed securities deals backed by Ameriquest collateral have been downgraded by Moody's Investors Service. The downgrades were based on "recent and expected pool losses and the resulting erosion of credit support," the rating agency said. "Moreover, increasing delinquencies along with step-down, or the possibility thereof, is likely to cause further erosion of credit enhancement levels." The transactions are backed primarily by first-lien subprime mortgage loans originated through Ameriquest's retail and wholesale channels. Moody's can be found on the Web at http://www.moodys.com.

The PMI Group Inc. responded to downgrades by Fitch Ratings with an assurance that it has "significant financial resources" to pay claims. The company also issued a reminder that it is still an approved mortgage insurer for Fannie Mae and Freddie Mac. Besides the two-notch cut in the insurer financial strength of the U.S. operations [see above item], Fitch dropped the IFS rating on PMI's international businesses from AA to A-plus and the parent company's long-term issuer rating was cut from A to BBB-plus. After Standard & Poor's cut its ratings in April, PMI was ordered to create a remediation plan. The plan, which has been submitted to Fannie and Freddie, details its strategy on how to return to profitability as well as its financial forecast and capital plan, among other things. Options being considered by PMI include capital markets transactions, utilization of excess capital at its wholly owned financial guaranty subsidiary, reinsurance, and asset sales.

Fitch Ratings has reduced the insurer financial strength ratings of PMI Mortgage Insurance Co., Walnut Creek, Calif., and Republic Mortgage Insurance Co., Winston-Salem, N.C. PMI's IFS rating was downgraded from AA to A-plus, a drop of two notches, while RMIC's was cut from AA to AA-minus. The changes echo downgrades made by Standard & Poor's in April. At that time, Freddie Mac ordered PMI to come up with a remediation plan, but did not require one of RMIC or its parent, Old Republic Corp., Chicago. The changes were announced in a Fitch news release about the whole mortgage insurance industry. Since late February, Fitch said it "has grown considerably more pessimistic on the outlook for the sector." It added that 2007 will likely turn out to be one of the worst underwriting years in MI history, with that year's book of business turning delinquent significantly faster than the 2005 or 2006 vintages. In addition, Fitch placed the IFS rating of Genworth Mortgage Insurance Co., Raleigh, N.C., on Rating Watch Negative and cut the long-term issuer rating for MGIC Investment Corp., Milwaukee, from A to BBB-plus.

Although falling house prices and credit losses continue to be a problem, Freddie Mac chairman and chief executive Richard Syron has told investors that the mortgage giant is on the right track and that they will not see a repeat of the $3.1 billion loss the company suffered last year. "We believe our 2008 results will be significantly better than [those of] 2007," Mr. Syron said at Freddie's annual shareholder meeting. The CEO reported that Freddie will probably increase its provisions for loan losses by $5 billion to $6 billion this year. However, he said he expects to achieve 15% to 20% growth in the mortgage guarantee business and "very strong growth" in net interest income from the investment portfolio. "The bottom line is that while our credit costs are increasing in this tough environment, we believe they are manageable in any realistic scenario and mitigated by our revenue growth going forward," Mr. Syron said. The CEO also reported that Freddie is close to completing the stock registration process with the Securities and Exchange Commission. Freddie can be found online at http://www.freddiemac.com.