Fitch Ratings said today that it has dropped its servicer ratings on troubled subprime mortgage outfit Option One Mortgage Company, whose pending sale to private equity investor Cerberus Capital is in serious doubt. Option One saw both its primary servicer ratings for prime and special products dropped to ‘RPS2+’ from ‘RPS1,’ Fitch said. The downgrade brings [...]

Catching up on a press release from last week, Irwin Financial Corporation warned that it will lose a consolidated $15 to $20 million dollars when it reports its third quarter results on October 31. The company said it expects to break even on continuing operations, while absorbing losses in it discontinued operations: “The sustained disruptions in the [...]

Reps. Brad Miller (D-NC), Mel Watt (D-NC) and Barney Frank (D-MA) today introduced new legislation intended to “combat abuses in the mortgage lending market,” according to a joint press statement issued today by the House Financial Services Commitee. The Mortgage Reform and Anti-Predatory Lending Act of 2007, among other proposed changes, would make “secondary market securitizers” [...]

Reuters is reporting this morning that Lehman Brothers Inc. analyst Bruce Harting has officially entered the “bearish” camp on the mortgage sector: Harting downgraded the mortgage finance sector to “negative” from “neutral,” and the specialty finance sector to “neutral” from “positive. He cut Countrywide and IndyMac Bancorp Inc to “underweight” from “equal weight,” and Washington Mutual [...]

Fitch Ratings said today that it has raised the servicer rating for Branch Banking and Trust Company’s (BB&T) residential mortgage primary servicing operation to ‘RPS3+’ from its previous rating as ‘RPS3.’ From the press statement: Through slow steady growth the portfolio has grown and as of June 30, 2007, BB&T’s mortgage servicing center serviced a portfolio of [...]

U.S. Senator Norm Coleman (R-MN) today introduced the Home Ownership Mortgage Emergency Act (cleverly, the HOME Act), which would allow troubled borrowers under certain conditions to make penalty-free withdrawals from their 401K or other retirement accounts in order to bring their mortgages current. From the press statement: The HOME Act would allow homeowners who are 60 days [...]

Most HW readers are familiar with the ABX Indices – the indices reference asset-backed bonds, and are commonly used by bond investors to speculate on or hedge against the risk of the underlying security (in this case, subprime mortgages and home equity loans). An email I received from one bond trader characterized certain parts of the [...]

Capital One Financial reported earnings on late Thursday, and the results were anything but pretty — the bank said it swung to its first quarterly loss ever, reporting a net loss of $81.6 million, or $0.21 per diluted share. Driving the loss was a $898.0 million charge associated with the company’s shutdown of GreenPoint Mortgage [...]

Standard and Poor’s Rating Services followed up yesterday’s downgrade of $23.35 billion of 2007-vintage RMBS with another massive downgrade of subprime RMBS backed by 2005-6 vintage first liens. The current cuts hit 1,413 classes, representing an original par amount of approximately $22.02 billion — 4 percent of the $554.4 billion par amount of U.S. RMBS [...]

Wachovia Corp. reported its third quarter earnings today, and the song-and-dance is pretty much what has become common this earnings season: increasing loan loss reserves and write-downs in the value of mortgage-backed portfolio securities holdings, resulting in earnings below what analysts had expected. Wachovia said it took a $1.3 billion hit on products and leveraged [...]