Origination

Two classes of Credit Suisse First Boston Mortgage Securities Corp. commercial mortgage pass-through certificates, series 2004-C3, have been downgraded by Moody's Investors Service. Class N was downgraded from B2 to Caa1, and class O was downgraded from B3 to Caa2. Moody's also affirmed the ratings on 18 other classes in the deal. The downgrades are due to expected losses of $6.8 million from five specially serviced loans and LTV dispersion, the rating agency said. The certificates are collateralized by 171 mortgage loans ranging in size from less than 1.0% to 9.4% of the pool.

Thirty tranches from five subprime mortgage deals issued by Structured Asset Investment Loan Trust in 2005 have been downgraded by Moody's Investors Service, and eight tranches have been placed under review for possible downgrade. The actions were based on the fact that the number of seriously delinquent loans in the pools continues to grow for all five transactions, Moody's said. "In addition, pending stepdown on some of the transactions may make certain securities more vulnerable to pool deterioration in the future," the rating agency said. The deals are backed by first- and second-lien subprime mortgage loans.

InsideValuation, a real estate valuation company based in Reno, Nev., has announced a partnership with International Financing Engineering Group, Rockville, Md., that has created a ZIP code-level mortgage default projection. The two companies offer combined access to millions of recent loan histories and "a large quantity" of subprime loan default information, according to InsideValuation. "This product presently allows mortgage risk managers to determine the relative safety of loans based on econometric and demographic variables relating to property location, such as median home price, median household income, affordability, unemployment, and rent-versus-price ratios," the company said. InsideValuation can be found online at http://www.insidevaluation.com.

In contrast to the downturn in the single-family residential sector, conditions in the apartment sector remain strong, according to the National Multi Housing Council's latest Market Trends report. The multifamily industry trade association reported that the number of renters in professionally managed apartments increased last year by the largest amount since 2000, and was as large as that of the previous five years combined. "While the so-called shadow rental market (unsold houses and condos that have left the for-sale market to enter the rental market) may attract some apartment renters, thus far the lowest homeownership rate in almost seven years seems to have increased demand for apartment residences, especially professionally managed apartments," said Mark Obrinsky, the association's chief economist. According to the Washington-based NMHC, the number of renters nationwide is projected to rise by nearly four million households over the next 10 years, and half are likely to rent apartments. The council can be found online at http://www.nmhc.org.

Citing a worse mortgage market than expected even two months ago, Standard & Poor's Ratings Services has lowered the long-term counterparty credit ratings of Washington Mutual Inc., Seattle, and Washington Mutual Bank. WaMu's counterparty rating was downgraded from BBB-plus to BBB, and WaMu Bank's was downgraded from A-minus to BBB-plus. S&P also placed all its WaMu ratings on CreditWatch with negative implications. "We now believe that the severity of losses on all residential mortgages will be higher that we had thought and that the weak housing market will now be a longer cycle," said S&P credit analyst Victoria Wagner. S&P said it also has a more negative view of the overall economy, which could "push loan losses and loan delinquencies much higher than we previously factored into the WaMu ratings." Despite the downgrades, S&P said WaMu "has made significant strides at shoring up bank and holding-company liquidity and has substantial liquidity at the holding company to meet all of its fixed-income and dividend obligations through the next few years."

Thornburg Mortgage Inc., a real estate investment trust, will be replaced by Ventas Inc. in the S&P U.S. REIT Composite Index because Thornburg is a mortgage REIT and only equity REITs are currently eligible for addition to the index, according to Standard & Poor's. The replacement will be made after the close of trading March 10. Ventas, based in Louisville, Ky., finances, owns, and leases health-care-related and senior housing facilities. The rating agency can be found online at http://www.standardandpoors.com.

Mortgage brokerage firms cut 4,100 employees in January, while employment at mortgage banking companies appeared to stabilize, according to a government jobs report. The U.S. Bureau of Labor Statistics reported that 3,900 full-time employees in the mortgage banker/broker sector lost their jobs in January. Total employment in the sector fell from 368,800 in December to 364,900 in January. Over the past 12 months, mortgage bankers have cut their payrolls by 25% and eliminated 86,700 jobs, while 23,900, or 17%, of the brokers counted by the BLS have lost their jobs or left the sector. But the recent uptick in refinancings along with rising defaults and workout cases that are straining servicing departments must have forced mortgage banking companies to stop cutting, at least for now. They added 200 workers to their payroll in January. Friday's job report also shows that the troubled homebuilding industry has lost 346,000 jobs since September 2006. Homebuilders laid off 14,400 employees in February, and residential specialty trade contracts cut another 16,300 employees. (There is a one-month lag in the BLS's reporting of jobs data on the mortgage industry.) The BLS can be found online at http://stats.bls.gov.

Class G of JP Morgan Chase Commercial Securities Corp. series 2001-A has been removed from Rating Watch Negative by Fitch Ratings. Fitch also affirmed the ratings on seven other classes in the transaction. The removal of class G from Rating Watch was attributed to "the pending modification of the largest loan in the transaction," which had been transferred to special servicing due to a maturity default. The borrower is negotiating with the special servicer on a loan extension, Fitch reported. A majority of the collateral (54.8%) consists of retail properties, and 9.8% consists of health care properties, the rating agency said.

More than 50 additional classes of subprime mortgage pass-through certificates were downgraded by Fitch Ratings on March 5 as a result of changes to its subprime loss forecasting assumptions. Fitch also placed 18 classes of subprime pass-throughs on Rating Watch Negative and affirmed the ratings on classes with outstanding balances of more than $200 million. The securities affected by the latest downgrades were 54 classes from four Soundview Home Loan Trust deals. Fitch also placed the following securities on Rating Watch Negative: 12 classes from one Bear Stearns Asset Backed Securities Trust deal and six classes from one Soundview Home Loan Trust deal. 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 on the Web at http://www.fitchratings.com.

Health Care REIT Inc., a Toledo, Ohio-based real estate investment trust, has priced an offering of 3 million shares of common stock at $41.44 per share. The REIT said it plans to use the net proceeds to invest in additional health care and senior-housing properties. The underwriters have been given an option to buy up to 450,000 additional shares to cover any overallotments. Deutsche Bank Securities and UBS Investment Bank are the joint book-running managers for the offering. The company can be found online at http://www.hcreit.com.