Origination

Three classes from First Union National Bank Commercial Mortgage Trust commercial mortgage pass-through certificates, series 2002-C1, have been downgraded by Moody's Investors Service. The downgrades were as follows: class L, from B1 to B2; class M, from B2 to Caa2; and class N, from Caa1 to Ca. Moody's also upgraded three classes in the deal and affirmed the ratings of 10 other classes. The downgrades were attributed to realized and projected losses from three specially serviced loans representing 2.3% of the pool. The certificates are collateralized by 96 mortgage loans ranging in size from less than 1% to more than 5% of the pool.

Over 150 additional classes of subprime mortgage pass-through certificates were downgraded by Fitch Ratings on April 4 as a result of changes to its subprime loss forecasting assumptions. Fitch also placed 12 classes of subprime pass-throughs on Rating Watch Negative, removed two from Rating Watch Negative, and affirmed the ratings on classes with outstanding balances of nearly $4 billion. The securities affected by the latest downgrades were: 54 classes from nine issues of Barclays Capital mortgage pass-throughs; 47 classes from seven issues of Asset Backed Securities Corp. pass-throughs; 31 classes from six issues of Bear Stearns Asset Backed Securities I Trust pass-throughs; and 30 classes from four issues of CSFB Home Equity Asset Trust pass-throughs. The rating actions were attributed to changes to Fitch's subprime loss forecasting assumptions that "better capture the deteriorating performance of pools from 2006 and late 2005 with regard to continued poor loan performance and home price weakness." Fitch can be found online at http://www.fitchratings.com.

The servicer quality rating of Fremont Investment & Loan as a primary servicer of subprime loans has been downgraded from SQ4 to SQ4-minus by Moody's Investors Service. The rating remains on review for possible further downgrade. In addition, the outlook for Fremont and its parent, Fremont General Corp., remains negative, and the company's servicing stability assessment has been revised from below average to weak, Moody's said. The rating agency said the action was prompted by continued deterioration of financial and operating conditions as well as regulatory actions affecting Fremont and its parent. The Suffolk Superior Court recently issued a preliminary injunction, sought by the Massachusetts attorney general, barring Fremont from initiating or advancing foreclosures on loans that are "presumptively unfair" without first complying with the court's order, Moody's said. The injunction was later modified to further restrict Fremont's efforts to sell mortgage servicing rights on loans serviced in Massachusetts. Moody's said the rating action also stemmed partly from management turnover at Fremont and its parent. Moody's can be found online at http://www.moodys.com.

Reverse Mortgage Solutions, Spring, Texas, has announced plans to expand its operations as a technology systems provider. A start-up just one year ago, the multifaceted company has come of age just as the leading edge of the 80 million-member baby boom generation enter their twilight years and has built a servicing portfolio of 7,500 loans. RMS says it will soon roll out a front-end reverse mortgage origination system dubbed RM Compass. "It's fully integrated with the servicing components in what we think is a better solution than what has been out there," chief operating officer Marc Helm said at the National Reverse Mortgage Lenders Association's eastern regional conference in Philadelphia. "We have had the opportunity to stand back, look at the industry, and build a state-of-the-art, integrated origination system and servicing system from scratch."

Texas Pacific Group, an investment fund managed by a former director of Washington Mutual, is talking to the Seattle thrift about injecting money into the troubled institution, industry sources have told MortgageWire. "We're trying to get it done quickly," said one source, requesting anonymity, "but there's no deal yet." It's expected that WaMu chief Kerry Killinger will stay with the organization, but there could be a wholesale restructuring of the savings-and-loan institution, the nation's largest. Other investors are involved as well, said one banker. In trading on Monday, WaMu's share price skyrocketed 25% to $12.76. News of Texas Pacific's interest in WaMu was first reported by The Wall Street Journal. David Bonderman, founding partner of Texas Pacific, served on WaMu's board but left in 2002. Mr. Bonderman used to work for the Bass Brothers, which at one point owned American Savings, a large California S&L that WaMu eventually purchased.

Forty-six tranches in seven subprime transactions issued by First Franklin Mortgage Loan Trust have been downgraded by Moody's Investors Service. The downgrades were attributed to a growing proportion of severely delinquent loans. "Timing of losses and in some cases, pending stepdown, will cause the protection available to the subordinated bonds to be diminished," Moody's said. The collateral consists primarily of first-lien subprime mortgage loans.

Huntington Bancshares, Columbus, Ohio, has been designated the "Bear of the Day" for April 4 by Zacks Equity Research, Chicago. The Bear of the Day is a stock expected to underperform the markets over the next three to six months. "The merger with Sky Financial has weighed on the share price in the current quarter, with the potential for negative implications over the next several quarters," Zacks said. "The relationship with Franklin, inherited with the aforementioned acquisition, contributed significantly to this loss." The research firm noted the weaknesses in the housing and credit environment and said they "are expected to overhang the market in 2008." Zacks can be found online at http://www.zacks.com, and Huntington can be found at http://www.huntington.com.

Radian Guaranty, a Philadelphia-based mortgage insurer, has announced the introduction of Radian FastAdvance, a program aimed at helping servicers assist distressed homeowners via loan modifications and customized repayment plans. "Since there is no single solution that will help every borrower, Radian is advancing funds to servicers so they can take the specific action required to keep borrowers in their homes rather than proceeding with a stressful and costly foreclosure process," the company said. Radian also announced a partnership with Consumer Credit Counseling Service of Delaware Valley that will provide education, customized assistance, and a method of direct communication between borrowers and servicers using the Radian FastAdvance program. Radian can be found online at http://www.radian.biz.

Bayerische Landesbank, Munich, Germany, has taken 4.3 billion euros ($6.7 billion) of writedowns between mid-2007 and the end of March 2008 on a portfolio that includes billions of dollars in U.S. subprime residential mortgage-backed securities. The company and its owners said they are working on a plan "designed to cover theoretical default risks" from asset-backed securities investments up to 4.8 billion euros ($7.5 billion). Bayerische Landesbank saw pretax earnings of 255 million euros ($400 million) during fiscal year 2007, down from 1.33 billion euros ($2.08 billion) in fiscal 2006. In fiscal 2007, it recorded its results under International Financial Reporting Standards for the first time.

The bad news for Triad Guaranty Inc., Winston-Salem, N.C., continues, as Standard & Poor's announced that it will drop the company from its SmallCap 600 Index after the markets close on April 7. As of the close of trading on April 3, when S&P made the announcement, Triad's market capitalization was approximately $39 million, ranking 600th in the index. In early trading on April 4, Triad's common stock price fell even further, crashing through what had been the 52-week low for the stock. At midday on April 4, Triad was trading at $2.05 per share. Triad's place in the index is being taken by Zoll Medical, a heath care equipment company. Separately, S&P's rating unit cut Triad's financial strength ratings from AA-minus to BBB, echoing moves by Fitch Ratings and Moody's Investors Service. Meanwhile, in a Securities and Exchange Commission filing, Triad said it has repaid the $80 million borrowed on an unsecured credit facility and has terminated its agreement with the lenders. It said it took the step to avoid violating any of the agreement's covenants, such as restrictions on Triad's ability to incur liens, merge or consolidate with another entity, or dispose of all or substantially all its assets.