Servicing

Jordan Paul has been named senior managing director of the recently established Related Investment Fund, which was formed to buy distressed mortgages and property from other developers, lenders, and property owners. Mr. Paul joins the Miami-based fund from Aquila Property Co., a commercial real estate investment, management, and advisory firm he founded in 2000, according to The Related Group, a private multifamily developer that formed the fund in March with Lubert-Adler, a Philadelphia-based real estate private equity firm.

The National Consumers League has announced the launch of MortgageTown, a website aimed at helping prospective buyers understand the risks and benefits of homeownership. MortgageTown explains "nine essential steps" to financing a home, advising consumers on choosing the right loan, closing on a home, protecting themselves from fraud and predatory lenders, and preventing foreclosure. "MortgageTown is a user-friendly and reliable source where consumers can become better versed in the process of getting a mortgage and what pitfalls to avoid as they head down that road," said NCL executive director Sally Greenberg. The new website can be found online at http://www.mortgaetown.org.

The Laborers' International Union of North America has announced that it will kick off a "Pigs at the Trough" tour April 3 in Los Angeles outside the annual meeting of KB Home to highlight the role of corporate homebuilders in creating the subprime crisis. LIUNA said homebuilders are seeking as much as $33 billion in tax breaks through the Foreclosure Prevention Act. "Corporate homebuilders helped create the current housing and mortgage crisis -- contributing to the loss of 232,000 construction jobs in 2007 alone -- by pushing buyers to subprime and high-risk loans through their own mortgage subsidiaries," the construction workers' union said. ".... At KB Home, for example, subprime lending increased 405% between 2005 and 2006. In the tax breaks homebuilders are seeking through the Foreclosure Prevention Act, KB could gain as much as $683 million." The union can be found online at http://www.liuna.org.

The Senate voted 94-1 Tuesday to begin debate on a foreclosure prevention bill after Republican leaders agreed to stop a filibuster and work with Senate Majority Leader Harry Reid, D-Nev., on a consensus bill. The consensus bill was scheduled to be introduced on Wednesday (April 2) and will probably include tax-exempt revenue bonds for refinancing subprime borrowers, Community Development Block Grants for cities to purchase and rehab foreclosed properties, additional funding for housing counseling, and a net-operating-loss carry-back provision for homebuilders. "I think industry can get behind that," said American Financial Services top lobbyist Bill Himpler. He noted that there is also a lot of support for a homebuyer tax credit, which might be included in the package or offered as an amendment. The AFSA lobbyist is wary, however, that Sen. Richard Durbin, D-Ill., might offer a controversial amendment that allows bankruptcy judges to modify mortgages. There are also discussions about attaching a Federal Housing Administration modernization bill to the foreclosure package.

Zacks Equity Research, Chicago, announced April 1 that Liberty Property Trust, Malvern, Pa., had been designated its "Bear of the Day," a stock expected to underperform the markets over the next three to six months. Zacks said the commercial real estate investment trust is still rated a Sell "despite a low comparative valuation" and recent price declines. "We expect rental rates to remain flat through 2008, as the company has assets in office markets that have high vacancies," Zacks said. "Additionally, Liberty continues to run a deficit to cash flow -- that is, the dividend is not being covered with operating cash. We expect this to continue in 2008, as competition for tenants will become worse in a faltering economy." Zacks can be found online at http://www.zacks.com, and Liberty Property Trust can be found at http://www.libertyproperty.com.

Impac Mortgage Holdings Inc., a real estate investment trust based in Irvine, Calif., has announced the settlement of "a majority" of its outstanding repurchase claims. The mortgage REIT said it is continuing to negotiate its remaining warehouse borrowings and, as a result, will be required to add disclosures and make changes to its financial statements for Dec. 31, 2007. Therefore, Impac said, it was unable to file its Form 10-K for 2007 during the 15-day extension period, but intends to file the form "as soon as practical." The company can be found online at http://www.impaccompanies.com.

Luminent Mortgage Capital Inc., Philadelphia, has announced a proposed restructuring under which it would convert from a real estate investment trust into a publicly traded partnership. Luminent said maintaining its REIT status is no longer beneficial to the company or its stockholders, and that freeing itself from the REIT income and asset tests will "significantly enhance its flexibility for investment diversification and cash management." After the restructuring, the company says it plans to offer fee-based services such as credit risk management, asset management advisory services, and sub-manager services for investment funds. Luminent can be found online at http://www.luminentcapital.com.

FirstPlus Financial Group, Irving, Texas, has announced a $1 million debenture agreement with its subsidiary Rutgers Investment Group to enable Rutgers to expand its mortgage banking operations "more aggressively." Under the agreement, FirstPlus issued to Rutgers 10 million shares of common stock secured by a $1 million subordinate debenture issued by Rutgers. "This infusion permits Rutgers to more aggressively pursue its plans for licensing and expansion as a mortgage banking firm in selected areas of the United States," FirstPlus said. The parent company can be found on the Web at http://www.firstplusgroup.com.

In order to address the claims of commercial paper investors, KKR Financial Holdings LLC, San Francisco, has agreed to give them triple-A rated residential mortgage-backed securities supporting CP issued by asset-backed conduits. "This agreement and the sale of our REIT subsidiary mark a constructive resolution to an issue created by the unprecedented disruption in the credit markets," said Saturnio Fanlo, KKR Financial's chief executive officer. "Reflecting these conditions, our board of directors has approved an incremental charge of approximately $5.5 million, which we believe is an appropriate amount to resolve both the refinancing issues relating to the [commercial paper] notes issued by the REIT's two asset-backed conduits and complete the exit of our mortgage-related businesses."

Thornburg Mortgage Inc., Santa Fe, N.M., says it has completed a key $1.35 billion private-placement capital raise from the sale of senior subordinated secured notes, warrants to purchase common stock, and a participation in certain mortgage-related assets. The company said it has received $1.15 billion of the proceeds from the offering and that the remaining $200 million is being held in escrow, to be delivered to the company upon the successful completion of a tender offer for its preferred stock. Thornburg had said it had to raise at least $948 million in capital within seven days to keep in place a key 364-day agreement with some counterparties involved in potentially "material" margin calls it has been facing. The company had to extend the deadline twice before the capital raise was completed. Thornburg can be found online at http://www.thornburg.com.