Origination

Rust Consulting Inc., Minneapolis, has announced the formation of a task force to deal with developments related to the subprime mortgage crisis. Rust said the task force is composed of experts from the company's antitrust, consumer finance, labor and employment, and securities practice areas. Jim Parks, a principal consultant with Rust, said the company's clients have been forming internal task groups to deal with the "many nuances" of subprime market litigation. This prompted Rust to form the task force "to work alongside those clients in tracking and monitoring case development in this area," he said. The company, which is part of the class action settlement administration industry, can be found online at http://www.rustconsulting.com.

Credit Suisse took a loss of 2.1 billion Swiss francs ($2.0 billion) in the first quarter and 5.3 billion Swiss francs ($5.1 billion) in net writedowns, about 3.6 billion Swiss francs ($3.5 billion) of which appear to be mortgage-related. The mortgage-related writedowns stem from collateralized debt obligations (2.7 billion Swiss francs, or $2.6 billion), commercial mortgage-backed securities (848 million Swiss francs, or $819 million), and residential MBS (96 million Swiss francs, or $93 million). The remaining writedowns reflect leveraged-finance concerns. While the writedowns remain sizable, the company said it has made progress reducing exposures in problem areas like commercial mortgage, which has been cut by 25%. Credit Suisse also said it has reduced leveraged-finance exposures by 41%. Credit Suisse can be found on the Web at http://www.creditsuisse.com.

In response to strong criticism from fair-lending groups, Fannie Mae has indicated that it is reconsidering recent moves to tighten underwriting standards on affordable housing mortgages and impose new fees. "We have met extensively with advocates, listened to their concerns, and are considering making some changes to our methodologies," Fannie spokesman Brian Faith said. Freddie Mac has also met with the fair-housing and civil rights organizations that have accused the two government-sponsored enterprises of abandoning their affordable housing mission. "While we disagree with their conclusions, we have had helpful discussions with the housing groups and take their concerns very seriously," a Freddie spokesman said. The GSEs can be found online at http://www.fanniemae.com and http://www.freddiemac.com.

New-homes sales fell 8.5% in March to the lowest level since October 1991, and it appears that homebuyers are taking advantage of lower prices on existing homes. The U.S. Census Bureau reported that sales of new single-family homes fell from a seasonally adjusted annual rate of 575,000 in February to 526,000 in March. (The February sales number was revised downward from 590,000.) The March decline was the steepest since November and has "erased" any perception that new-home sales are bottoming, according to Adam York, an economic analyst at Wachovia Corp. "Look for further declines into the summer months," he said. Stephen Stanley, chief economist of RBS Greenwich Capital, noted that builders were quick to cut prices on their inventories last year, but he said existing homes are catching up and it is reflected in the sales numbers. "Over the past six months or so, existing-home sales are down 3.5%, while new-home sales have plummeted by 24%," Mr. Stanley said. The Census Bureau, an agency of the Commerce Department, can be found online at http://www.doc.gov.

Classes B-3 and B-4 of CAPCO American Securitization Corp. commercial mortgage pass-through certificates, series 1998-D7, have been placed on Rating Watch Negative by Fitch Ratings. Fitch also lowered the Distressed Recovery rating of class B-5 from C/DR5 to C/DR6 and affirmed the ratings on eight other classes in the transaction. The ratings watch placement was attributed to the recent transfer to the special servicer of the Eastland Mall loan, the third-largest nondefeased loan in the pool.

Two classes of Anthracite 2004-HY1 Ltd., a commercial real estate collateralized debt obligation, have been downgraded by Fitch Ratings and removed from Rating Watch Negative. Class E was downgraded from BBB to BB, and class F was downgraded from BBB-minus to BB. Fitch also affirmed the ratings on four other classes in the deal, which is primarily backed by B-pieces of commercial mortgage-backed securities. The downgrades were based on losses and projected losses to the collateral, Fitch said. The rating agency said it believes investment-grade CMBS "will perform well even in a heightened stress environment," but that the risks facing first-loss and junior-rated bonds in CMBS have risen along with expectations of an increase in commercial real estate defaults.

Two classes of Morgan Stanley Capital I Inc. series 2006-XLF commercial mortgage-backed securities have been downgraded by Fitch Ratings and removed from Rating Watch Negative. Class M was downgraded from BBB-minus to BB-plus, and class N-RQK was downgraded from BBB-minus to BB-minus. Fitch also upgraded one class and affirmed the ratings on 12 other classes in the transaction. The downgrades were attributed to the transfer of the Holiday Inn-Columbus loan to special servicing and the declining performance of the ResortQuest Kauai and Laurel Mall loans.

Six classes of ARCap Resecuritization Inc. series 2004-RR3 commercial mortgage-backed securities have been downgraded by Fitch Ratings. The downgrades were as follows: class G, from BBB-minus to BB; class H, from BB-plus to B; class J, from BB to B-minus; class K, from BB-minus to B-minus; class L, from B-plus to B-minus; and class M, from B to B-minus. Fitch also affirmed the ratings on eight other classes in the deal. "In reviewing CMBS Re-REMICs, Fitch has targeted expected losses in different rating stresses based on the quality of the underlying CMBS collateral," the rating agency said. "The overall expected losses reflect the single-sector exposure, the concentrated nature of these portfolios, and the low expected recoveries upon bond default, especially for more junior and thinner classes of CMBS tranches." The rating agency can be found on the Web at http://www.fitchratings.com.

Sales of existing single-family homes in Florida totaled 9,142 in March, an increase of 10% from the level recorded in February but a 26% decline from that of a year earlier, according to the Florida Association of Realtors. The median sales price of homes sold in March rose to $205,600, up from $198,900 in February but down 15% from $242,800 a year earlier, FAR reported. Among the state's larger markets, resales decreased 56% in the Miami metropolitan statistical area and 28% in the Orlando MSA, while median resale prices fell to $337,900 in Miami, down 12% from $382,600 a year earlier, and to $222,600 in Orlando, down 11% from $250,100 a year earlier.

Cohen & Steers Inc., New York, has announced the hiring of a team to manage a private global real estate fund of funds. Stephen M. Coyle, who has 19 years of experience in commercial real estate investing, will head the team, which also includes Dev Subhash as a vice president and assistant portfolio manager. Mr. Coyle was previously chief investment strategist and fund of funds portfolio manager with Citigroup Property Investors. Cohen & Steers said its global real estate fund of funds will invest in commercial real estate through institutional, value-added, and opportunistic private real estate funds. The company can be found online at http://www.cohenandsteers.com.