Origination

Vornado Realty Trust has submitted a bid to buy CW Financial Services, the parent of the second-largest manager of delinquent commercial real estate loans, according to a report by Bloomberg. A winner for New York-based CW Financial could be selected by next week, the news organization reported, quoting a source familiar with the deal. Buyout firms Apollo Global Management LP and Centerbridge Capital Partners LLC, which had made competing offers, are no longer seeking to buy the company, according to two people familiar with the auction. CWCapital Asset Management, a unit of CW Financial, is the special servicer of $144 billion of securitized real estate loans, including more than $18 billion that are delinquent, according to data compiled by Bloomberg. Ben Thypin, an analyst at Real Capital Analytics Inc. in New York, said CWCapital has access to valuable pricing and payment information. "Owning a firm like CW gives access to information on a lot of troubled loans as well as an established platform for originating new ones," Thypin said. "That puts the owner in the driver's seat and in control of distressed real estate that they may want for themselves." Vornado is the third-largest U.S. real estate investment trust by market value.

The National Credit Union Administration approved a $1 billion charge Thursday to pay for the corporate credit union bailout. The corporate assessment comes after last year's charge of $1.1 billion, which included $337 million for the first year of the corporate bailout and the remainder to replenish reserves for the National Credit Union Share Insurance Fund. This year's corporate assessment amounts to 13.4 basis points and must be accrued by credit unions for the second quarter, and paid by Aug. 30. The corporate assessment is expected to drive as many as 1,068 credit unions into the red for the second quarter and as many as 552 into the red for the year, while pushing about 60 credit unions into undercapitalized territory, according to NCUA. Almost half of the nation's 7,800 credit unions, 49.5%, reported losses for fiscal 2009, many of them because of the NCUA assessments.

CWCapital, Boston, a national multifamily and healthcare real estate lender, has named David Lundin senior vice president and production manager for its Northeast FHA lending unit. Lundin is a 20 year industry veteran who has underwritten in excess of $500 million of HUD insured loans, the company said. Lundin, who began his career at the Department of Housing and Urban Development in Boston, is an approved underwriter for refinance and construction financing of multifamily properties under the MAP program. CWCapital has closed over $11.5 billion in loans since 2002, and currently services a portfolio of $11.6 billion in loans in 48 states.

Freddie Mac is telling its servicers they can grant forbearance to mortgagors affected economically by the oil spill in the Gulf Coast region. Under Freddie's policy, servicers have the discretion to suspend a borrower's payments for three months if necessary-or reduce them for up to six months. Servicers may recommend forbearance for up to 12 months based on the borrower's circumstances, the GSE said. Under Freddie's requirements, servicers must not accrue or collect late fees from the borrower during short-term forbearance or any subsequent repayment plan period if the borrower is paying according to the agreement. Freddie senior vice president of default asset management Ingrid Beckles said, "We are instructing our servicers to work with borrowers with Freddie Mac-owned mortgages to extend forbearance of mortgage payments where appropriate to help them stay in their homes as they navigate through this financial hardship."

Investors believe financing and buyer interest in "second-tier" commercial real estate markets remains limited, according to a new survey from PricewaterhouseCoopers. Respondents told the accounting firm that until they see signs of "uniform patterns of stability" in the market, investment opportunities will be highly bifurcated with little attention paid to offerings with vacancy issues that don't deliver sought after gains in value. But there was some good news in the survey: commercial investors said financing for properties has become more readily available for the right borrower seeking quality assets. The economy is blamed for the lack of quality buying opportunities that many CRE investors feel should have materialized by now. Among the concerns is the large amount of CRE debt that comes due in 2011 and 2012. Troubled sales accounted for just 25% to 30% of the market with lenders more willing to extend existing loans than take back assets along with special servicers providing greater flexibility in modifying loans in lieu of forcing defaults. But, the low percentage of distressed asset deals is also being attributed to buyers steering clear of what they consider to be "junk" and focusing only on core assets.

Lenders living off of refinancings will be sorely disappointed by a new forecast from Fannie Mae. The GSE sees refinancings falling to just 34% of total production in fourth quarter, the lowest reading in almost a decade. (The third quarter of 2008 was a near disaster for refinancings with a reading of 38%, according to figures compiled by the Quarterly Data Report. In 3Q08 the stock market was about to begin a freefall with Fannie being taken over by the government and several other large financial firms failing or teetering.) In the first quarter of this year, refis accounted for 65% of residential fundings. Last year refis accounted for 67% of production.

California's Franchise Tax Board is warning consumers that nearly 80% of the state's $100 million first-time buyer credit has been claimed. As of June 15, the agency has received more than 15,000 applications from consumers. However, since many are duplicates or invalid, FTB will accept at least 28,000 applications to ensure the entire $100 million allocation is spent. It will announce a cut-off date for the program on its website, giving at least 24 hours notice for applicants to fax in their documentation. However, submission before the deadline does not guarantee consumers being approved for the credit. FTB will stop allocating credits once the $100 million is exhausted. A separate program, the $100 million tax credit for the purchase of a newly constructed home, is still operational. Consumers need to enter into contract before Jan. 1, 2011 and complete the purchase before Aug. 1, 2011.

Title insurance firms wrote $2.07 billion of new premiums in the first quarter, a 4% gain from the same period last year as the federal home buyer tax credit gave the business a boost. According to figures compiled by the American Land Title Association, Fidelity National Financial wrote more title policies than any other company, $763 million, giving it a 1Q market share of 37%. (FNF ended 2009 with a market share of 42%.) First American Title Insurance Group ranked second with $585 million (market share, 28%), followed by Stewart Title ($283 million/14% MS), and Old Republic ($217 million/11%). The states generating the most title insurance premiums during the first quarter of 2010 were California, Texas, Florida, New York and Pennsylvania. ALTA said title insurers which do business in Canada saw a 57% increase in premiums written in the most recent quarter over the same period in 2009.

Some nonbank mortgage lenders that pass the state LO tests required under the SAFE Act plan to market their expertise and use it as a competitive advantage against commercial banks. "It's definitely a plus in our favor," said Marc Savitt, a former past president of the National Association of Mortgage Brokers. "We can wave that piece of paper around and say, 'Hey, we're certified.'" Bodhi Kraus, for one, said his company, Priority Lending Mortgage Corp. in Santa Rosa, Calif., plans to highlight the fact that its loan officers are licensed on its business cards and mailings, and may even tout the licensing in its radio advertisements. "We advertise and make the phones ring," said Kraus, Priority's vice president. "We just don't have the employees to take" the calls. Under the Secure and Fair Enforcement Licensing Act, part of the Housing and Economic Recovery Act of 2008, loan officers working for state-supervised mortgage firms must now meet minimum standards for licensing and registration, including several hours of education and passing a test. Nonbanks say the requirements can be costly and time consuming, which puts them at a disadvantage to depositories, which are exempt from the SAFE Act. But Glen Corso, managing director of the Community Mortgage Banking Project, a trade group for independent lenders, said a number of companies he works with plan to use the licensing as a competitive tool, as a way to tell consumers that their loan officers are well qualified.

What goes down and also goes up? Answer: California new home sales. The latest count among new home projects of 10 or more units in the Golden State shows that just 2,203 units were sold in April. That's a 32% decline from April 2009, when 3,218 units were sold, according to the monthly report compiled by the California Building Industry Association and Hanley Wood Market Intelligence. At the same time, the median base price of the houses and condos that were sold was a bit higher than the previous April, rising 2%, from $342,783 to $349,736. In March, though, the median was 4.9% higher at $367,933. Jonathan Dienhart, director of published research for HWMI, said the latest figures don't bode well, at least for the short-term. "With the federal tax credit expiring in April and persistently high unemployment throughout most of the state, we could be in for a rough summer," Dienhart said. "Some areas will fare better than others, however. The long recovery process will be uneven, with the coastal areas faring better than the inland areas where there are still bigger problems with oversupply." But CBIA's president Liz Snow took a more optimistic stance. Noting that California's $10,000 tax credit went into effect on May 1, she said her members are hoping to see a pickup in sales when the May figures are tabulated.