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Subprime-Linked CDO Classes Downgraded
July 2, 2008
Five classes of notes in North Street 2000-2 Ltd., a subprime mortgage-related collateralized debt obligation, have been downgraded by Fitch Ratings.
The downgrades were as follows: tranche A, from AA-minus to B; tranche B, from BBB-plus to CCC; tranche C, from BBB-minus to CC; tranche D, from BB-plus to CC; and tranche E, from CCC/DR4 to CC/DR4. Fitch said the downgrades stemmed from higher loss expectations in the subprime residential mortgage-backed securities portion of the partially funded synthetic CDO portfolio. Fitch can be found online at http://www.fitchratings.com.
Nomura NIM Classes Downgraded
July 2, 2008
Seven classes from six net-interest-margin securities issued by Nomura Asset Acceptance Corp. have been downgraded by Moody's Investors Service.
The downgrades were as follows: Cayman Nomura Asset Acceptance Corp. NIM series 2005-S3, class A, from A3 to C, and series 2006-S5, class N1, from A1 to C, and class N2, from Baa1 to C; Nomura Asset Acceptance Corp. Trust NIM 2005-S4, class A, from Baa2 to C, NIM 2006-S1, class A, from Baa2 to C, NIM 2006-S3, class A, from Baa2 to C, and NIM 2007-S1 class N1, from A1 to C. The downgrades were based on "high levels of delinquency and loss in the underlying second-lien mortgage-backed transactions that [have] rendered any future residual payments to the NIM securities unlikely," Moody's said. The transactions rely on excess spread and prepayment penalties generated by the underlying residential mortgage-backed securitizations.
C-BASS Reperforming Classes Downgraded
July 2, 2008
Sixteen tranches issued from four transactions issued by C-BASS Mortgage Loan Asset-Backed Certificates have been downgraded by Moody's Investors Service.
The collateral consists primarily of first-lien adjustable-rate and fixed-rate "reperforming" and seasoned mortgage loans. Moody's said the actions are part of the rating agency's wider review of all residential mortgage-backed securities. "Many 'reperforming' pools originated since 2004 are exhibiting higher-than-expected rates of delinquency, foreclosure, and [real estate owned]," the rating agency said. Moody's can be found on the Web at http://www.moodys.com.
Housing Woes Push HELOC Delinquencies Higher
July 2, 2008
The percentage of bank home equity lines of credit that were more than 30-days past due rose 14 basis points to 1.10% during the first quarter, according to the American Bankers Association's quarterly delinquency bulletin.
That was the highest HELOC delinquency rate since 1997, although HELOC delinquencies remained lower than all other consumer credit categories. For closed-end home equity loans, the delinquency rate actually fell five basis points from the fourth quarter of last year to 2.39% in the first quarter. In addition to housing weakness, overall economic problems also weighed on consumer credit performance in the first quarter, ABA chief economist James Chessen said. "Faced with rising food and gas prices and little income growth, fewer resources have been available to manage debt."
Downey and President Part Ways
July 2, 2008
Downey Financial Corp. - which has seen its non-performing assets rise in recent months - said it has "terminated" Frederic R. McGill as president of the holding company and its thrift affiliate, Downey Savings and Loan Association.
No reason was given for his departure. Based in Newport Beach, Downey's NPAs (as a percentage of total assets) totaled 14.3% in May compared to 13.2% in April and 1.3% a year earlier. In connection with his dismissal the S&L will make a $900,000 lump sum payment to him. According to Downey, he has agreed "not to solicit any employees, consultants, customers or suppliers of the bank for a period of one year following termination of his employment." Among residential lenders Downey ranks 39th nationwide, according to the Quarterly Data Report.
Company Closes Ginnie Reverse Deal
July 1, 2008
Reverse Mortgage Solutions, Houston, has reported the completion of a $25 million Ginnie Mae fixed-rate home equity conversion mortgage-backed securitization on which it served as issuer, servicer, and master servicer.
Bob Yeary, chief executive officer of RMS, told MortgageWire that Ginnie Mae has identified the transaction as the first reverse MBS on which a single company has taken on all three of the aforementioned roles, something the Houston-based firm's automation helped it to do. World Alliance Financial, the Melville, N.Y.-based affiliate of KBC Bank, Brussels, originated the reverse mortgages in the transaction, Mr. Yeary said.
Thornburg Extends Deadline for Tender Offer
July 1, 2008
Thornburg Mortgage, Santa Fe, N.M., has received approval to extend the deadline for completing its preferred stock tender offer to Sept. 30.
Holders of approximately 93% of the contributions to an escrow agreement established as part of the conversion offer have agreed to retain their funds in escrow until the new deadline. The extension gives Thornburg more time to complete its tender offer for the preferred stock as agreed to in a March financing transaction designed to improve the company's liquidity. Under the terms of the offer, holders of four series of Thornburg's preferred stock will receive $5 in cash and 3.5 shares of common stock for each preferred share. Thornburg said that upon completion of the tender offer, the annual interest rate on its senior subordinated secured notes due in 2015 will be lowered from 18% to 12%, saving the company $69 million annually in interest payments.
Fitch Seeks Comment on New Rating Scales
July 1, 2008
Fitch Ratings is seeking comment over the next 30 days on potential new rating scales and indicators for global structured finance that would complement its existing scale.
"The additional indicators are designed to improve transparency for users of SF ratings and provide market participants with additional information regarding rated securities," said Ian Linnell, head of Fitch's EMEA [Europe, Middle East, and Africa] SF rating group. "Additionally, the proposals seek to address any perceived shortcomings of SF ratings." Among Fitch's proposals are a Loss Severity rating scale at the security level to accompany traditional ratings, and the assignment of an opinion grade for the underlying collateral alongside the transaction rating. The Collateral Quality Assessment "would draw on views already developed as part of the SF rating process, but is designed to isolate opinion on collateral from opinion on the rest of the transaction structure," Fitch said. The rating agency can be found on the Web at http://www.fitchratings.com.
RealtyTrac, Coldwell Banker Join Forces
July 1, 2008
RealtyTrac, an Irvine, Calif.-based online marketplace for foreclosure properties, and Coldwell Banker Platinum Properties, a real estate brokerage in Orange County, Calif., have announced a strategic partnership.
"Agents and brokers at Coldwell Banker Platinum Properties will have access to real-time data directly from RealtyTrac's nationwide foreclosure database, and users of Coldwell's website will also be able to access distressed properties, including properties in pre-foreclosure, auction, or bank-owned properties," said Rick Sharga, vice president of marketing at RealtyTrac. "That in turn will help drive more traffic and leads to the agent websites." The companies can be found on the Web at http://www.realtytrac.com and http://www.cbplatinumproperties.com.
TierOne Shutting Loan Production Offices
July 1, 2008
TierOne Corp., the holding company for TierOne Bank, Lincoln, Neb., has announced that it will close all nine of its loan production offices across the country.
The company said the goal of the closures is to direct its lending activity to its primary market area of Nebraska, Iowa, and Kansas. The lending offices being closed are located in Phoenix; Colorado Springs, Denver, and Fort Collins, Colo.; Orlando, Fla.; Minneapolis; Las Vegas; and Charlotte and Raleigh, N.C. Loans with existing customers will continue to be serviced by TierOne, the company said. The bank can be found on the Web at https://www.tieronebank.com.
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