Origination

Regency Centers Corp., a Jacksonville, Fla.-based real estate investment trust said its operating partnership, Regency Centers LP, has completed the sale of $150 million of 6.0% 10-year senior unsecured notes. The notes are due June 15, 2020 and were priced at 99.299%. Interest on the notes will be payable semiannually on June 15th and December 15th of each year, beginning on Dec. 15, 2010. The net proceeds will be used to repay near-term maturing indebtedness and for general corporate purposes of the shopping center REIT. J.P. Morgan Securities Inc. and Wells Fargo Securities, LLC acted as joint book-running lead managers for the transaction. The co-managers were Banc of America Securities LLC, Capital One Southcoast Inc., Comerica Securities Inc., Daiwa Securities America Inc., Mitsubishi UFJ Securities (USA) Inc., Mizuho Securities USA Inc., Morgan Keegan & Company Inc., PNC Capital Markets LLC, RBC Capital Markets Corporation, SunTrust Robinson Humphrey Inc. and US Bancorp Investments Inc.

The Mortgage Bankers Association has hired Bill Killmer as senior vice president of legislative and political affairs, effective July 5. His appointment as chief lobbyist on Capitol Hill comes as the residential finance industry is at a crossroads, poised for the largest changes, perhaps, in its history. Killmer will be directly responsible for the development and implementation of legislative and political strategy for the trade group which has lost several hundred members during the mortgage crisis. He joins MBA from the National Association of Home Builders, where for the past 20 years he worked in a variety of senior positions including chief lobbyist.

Homebuyers in Australia soon can choose what's being called a "never-ending" mortgage in an attempt to overcome that nation's affordability crisis. According to a report in The Sunday Telegraph, ING Direct, the nation's fifth largest residential funder, will originate loans that have no fixed term and no requirement to repay any principal at all. At current rates, the interest-only loans would cut repayments on a $300,000 mortgage by $5,000 a year, the newspaper reported. Repayments would be kept to a minimum, allowing borrowers to benefit from capital growth in their property. "People are needlessly being denied the chance to buy a property while prices spiral rapidly out of their reach" said ING Direct CEO Don Koch. He added that "There is an urgent need to provide more affordable options and borrowers should be able to choose whether they want to repay the capital, or not." During the U.S. housing boom (which is now being called a bubble) American homebuyers used interest only loans in a similar fashion, but investors speculating on home values also used the product. In America IOs are still being originated but at much reduced volume levels, according to figures compiled by the Quarterly Data Report, a National Mortgage News publication.

Flagstar Bancorp, a top ranked thrift wholesale lender, late this week conducted a reverse stock split, issuing one share of common for each 10 shares held. The reverse stock split will reduce the number of shares of outstanding common stock from roughly 1.53 billion to 153 million. The number of authorized shares of common stock will be reduced from 3 billion to 300 million. Over the past year, the thrift has been recapitalized with private investor money, which in turn has diluted the value of its common. Besides being a national residential wholesale funder, the depository has 162 branches in Indiana, Michigan and Georgia. The company will keep its current ticker symbol of FBC, but the shares will have a new CUSIP number.

The condition and performance of half the Federal Home Loan Bank system is "less than adequate," according to the nation's government-sponsored enterprise regulator. Federal Housing Finance Agency acting director Edward DeMarco, who cited continuing losses on investments in private-label mortgage-backed securities at six regional GSEs, told a congressional panel that he wants to see a gradual reduction in the FHLBs' investment portfolios. "FHFA is looking for the FHLBs to return to more traditional operations and activities with a focus on advances," DeMarco said. He stressed that the FHLBs have never experienced losses on making advances to their members. The GSE regulator did not mention mortgage purchase programs that several FHLBs engaged in, which caused financial problems at the Seattle and Chicago banks. Separately, FHFA issued a proposed rule to establish affordable housing goals for the mortgage purchase programs. The comment period ends in 45 days.

Lawyers for Hudson Valley Federal Credit Union said they plan to appeal the recent New York court ruling rejecting its challenge to the state's mortgage recordation tax. "Yes, we will appeal," said Dale Lois, an attorney representing the $2.8 billion former IBM employees credit union located in nearby Poughkeepsie. The credit union's lawyer said the speedy decision by the state Supreme Court may work to their favor by getting them to the state's appeals court faster to decide the decision, which could save credit unions millions of dollars in taxes. (The case was filed in November 2009.) The state court ruled that even though federal law defines federally chartered credit unions as instrumentalities of the federal government and thus exempt from state taxes, the mortgage recordation tax is not a tax on credit unions or a tax on borrowers, but on the "privilege of recording" a mortgage, as was argued by the state's Department of Taxation and Finance. The stakes are big for credit unions which pay millions of dollars in mortgage recording taxes to the state each year. Hudson Valley has requested a rebate of $1.8 million of taxes paid over the last three years.

Investor loans guaranteed by Freddie Mac fell to just 3% of portfolio outstandings in the first quarter, the lowest reading in almost seven years, according to new company figures. In 2007, roughly 7% of Freddie's guarantees were on non-owner occupied homes, a GSE spokesman told National Mortgage News. Investor loans, in general, can differ from "pure" vacation or second homes, in that the owner is trying to cover his payments (full or in part) by renting out the property. Some owners of vacation homes do not rent out the house at all and instead can afford the monthly payments without the help of rent rolls. During the housing boom, some lenders provided low downpayment financing for investor properties and vacation homes but since the market crash of 2008, most mortgage bankers want at least 20% down or more, depending on where the home is located.

With Congress deadlocked over a jobs bill, the authority of the Federal Emergency Management Agency to issue new flood insurance policies is expected to expire early next week. This would mark the second hiatus for the National Flood Insurance Program in two months. But lenders can still approve loans on properties in flood plains, according to guidance issued by the Federal Deposit Insurance Corp., Fannie Mae, and Freddie Mac during the NFIP lapse from April 1 to April 23. However, lenders must make sure the homebuyer completes a flood insurance application and pays the premium at closing. Once Congress re-authorizes the flood insurance program, FEMA will approve the pending applications. During the April hiatus, Realtors found that some lenders were willing to make loans based on the agencies' guidance, but others would not. The Federal Housing Administration issued guidance on the matter, saying it will "continue to insure single-family mortgages on homes where flood insurance is normally required but was not secured during the lapse in flood insurance coverage authority." The jobs bill (H.R. 4213) extends unemployment benefits, several tax provisions, along with a flood insurance extension until the end of September. The House passed the bill by a 215-204 vote on Friday afternoon. The Senate has already adjourned for the Memorial Day recess and won't take up the measure until the senators return on June 7.

FHA single-family originations totaled $22.9 billion in April, basically unchanged from March and February, according to the agency. Nearly 68% of FHA loan endorsements were for borrowers purchasing a home. Of the 36,000 refinancings in April, 68% were conventional borrowers seeking low-downpayment FHA loans. The April report shows that FHA's 'Hope for Homeowners' program helped 23 underwater borrowers. Over the past seven months FHA has approved only 35 H4H refinancings where the lender has to reduce the principal amount of the loan to 97.5% of the current appraised value. Meanwhile, FHA reported that 8.5% of its insured single-family loans are 90 days or more past due, down from 8.8% in March and 9.17% in February.

The Agriculture Department has reopened the Rural Housing Service single-family program by offering lenders $2.5 billion of conditional loan commitments, according to Rep. Ruben Hinojosa, D-Tex. Agriculture secretary Tom Vilsack informed Rep. Hinojosa, D-Tex, about the decision on May 26, the day the additional loan commitments became available. The Texas lawmaker who chairs the Congressional Rural Housing Caucus said the loan commitments would be available until they are exhausted. "The decision to increase the commitment authority even conditionally will provide the guarantees needed to assist rural families, local housing markets, create jobs and general new tax revenues," Rep. Hinojosa said. The RHS exhausted its $13.1 billion of loan commitment authority for fiscal 2010 on May 17. Instead of providing additional loan commitments, Congress wants to increase RHS' 2% upfront premium to 3.5%, which will cover the costs of new loan guarantees, making the program self-funding. The Senate included the RHS premium increase in an emergency supplemental appropriations bill (H.R. 4899) that provides funding for the wars in Iraq and Afghanistan and natural disasters. The Senate passed the bill Thursday evening. The House is not expected to vote on final passage of H.R. 4899 until it returns from the Memorial Day recess on June 7.