In what market sources are characterizing as one of many recent "significant defections" from the mortgage-backed securities department of Donaldson, Lufkin & Jenrette Securities Co., market veteran James Titus, most recently senior vice president and director of ABS and MBS research at DLJ, left the company on Friday, February 26, to join GMAC Commercial Mortgage Corp.'s real estate services group as senior vice president.

Titus begins his new position at GMAC today.

"He is going to focus on commercial mortgage-backed securities surveillance and investment activities," said Scott Rombach, senior vice president of corporate communications at Richmond, Va.-based GMAC Commercial Mortgage.

A researcher at DLJ, while confirming the departure of Titus, added that "he did not take anybody with him."

Titus' move comes amid general market buzz surrounding "tremendous staffing changes" in DLJ's MBS and ABS departments. "People are leaving from their commercial real estate, ABS and mortgage business," said an MBS market source. "Their residential trading and commercial trading departments are being disintegrated. They also laid two other people off in their commercial mortgage efforts, and they're trying to hire other people."

Catherine Conroy, director of corporate communications at DLJ, declined to comment about the people moves other than to say, "This is the time of the year that one sees post-bonus departures."

Another market source concurred with Conroy, saying that he had heard that the defections were due to "bonus disappointments."

Sources said Titus' departure is likely due to the same reasons that have caused a large number of fixed-income pros to leave the shop in the last month. DLJ made a controversial decision last year to change its compensation structure by removing commissions and installing bonuses, and when bonuses came out in late January, they were reportedly low due to a poor year in fixed-income.

Titus' departure indicates that the employee departures have now spread to the research side of the fixed-income shop, as before it was mainly traders and sales staff leaving the firm. In the last month, such notables as head MBS trader John Drastal left the firm for Chase Securities. Among other departures in the last month are CMBS trader Chris Connors, pass-through trading head Bill King and head of mortgage derivatives Alan Galishoff, along with more than a half-dozen other pros, mainly in the CMBS and ABS area.

Chris Connors, a trader of asset-backed securities at DLJ, left the company to join Barclays Capital Group. Connors will start in his new position on March 13 and will report to Susan Aldworth, a director and head of asset-backed trading at Barclays.

Sources say a large number of pros are expected to leave the shop soon, causing the highest turnover in fixed-income DLJ has experienced in years.

Long History Off Street

Titus is considered a storied figure in the CMBS market, as he headed Standard & Poor's Ratings Group's real estate finance group for several years in the early 1990s. He took over the reins at S&P from Joseph Franzetti, who first moved to Duff & Phelps and now runs a commercial mortgage conduit for Salomon Smith Barney.

Titus had spent seven years at S&P when he was named group head in 1993. He held this title until late 1996, when, after having grown tired of running a near-30 person group, he jumped to Wall Street, which was in a swoon for commercial mortgage securitizations and was raiding the rating agencies for research and sales talent. Duff & Phelps, for example, was raided for talent by both Daiwa Securities and Nomura Securities International. But S&P researchers were considered an even better prize, as the agency had been most active and thorough of the four agencies in rating CMBS at the time. Titus was considered one of the top CMBS researchers in the market by his contemporaries.

At DLJ, Titus set up a research department for real estate debt securities, as DLJ was already making a name in CMBS trading, but lacked a stand-alone research department. Titus' hire immediately put it on the map, one researcher said.

Titus gained more power in late 1998, when a minor research purge and consolidation resulted in him becoming head of MBS and ABS research, replacing Bruce Alpern.

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