Origination

Investment bank Greenhill & Co. Inc. is building a real estate placement advisory business. The company has hired four managing directors to focus on the effort: Bill Thompson, Fredrik Elwing, Walter Stackler and Pamela Wright. All four previously were senior members of Credit Suisse's real estate private fund group. The new effort's real estate related advisory activities are slated to focus on capital raising for funds, joint ventures and recapitalizations, as well as advice for real estate fund investors seeking to sell interests in the secondary market.

The global Commercial Mortgage Securities Association has changed its name to the Commercial Real Estate Finance Council to reflect the changed market and its aim to serve a broader range of constituencies. The New York-based council will start with five forums representing major market participants with the global CRE industry: investment-grade bondholders, multifamily lenders, portfolio lenders, servicers, and securities and loan investors. Its aim will be to achieve a consensus among these parties and advocate on their behalf. The council, like the CMSA, plans to continue to have a presence in Europe and Japan as well as North America.

Bank of America Merrill Lynch has hired Wall Street veteran Steve Harris as managing director in charge of mortgage sales for its Americas division. Harris will report to Michael Hokin, head of America's mortgages and securitized product sales at the bank. According to StructuredFinanceNews.com, Hokin-who was formerly head of global securitized markets sales at Citigroup-joined Bank of America Merrill last September. Prior to his hiring, Harris had a six-month stint at Rafferty Capital as a manager in structured products. From 1987 to 2009 he worked for Goldman Sachs as a manager in mortgage sales.

CitiFinancial, a nonbank that was once a powerhouse in subprime lending, Wednesday agreed to pay a $1.25 million fine for not correctly reporting its residential origination data to the Federal Reserve via the Home Mortgage Disclosure Act. The settlement, however, was not between the Fed and CitiFinancial but instead was worked out by state banking supervisors who discovered the reporting problems as part of a probe into compliance with consumer protection laws. The deal was worked out between CitiFinancial, an affiliate of Citigroup, and The Conference of State Bank Supervisors/American Association of Residential Mortgage Regulators. (Roughly 35 states were party to the agreement.) The reporting violations occurred on 91,127 loans between 2004 and 2007. Prior to that, the lender was in compliance, regulators said. According to CSBS, CitiFinancial of Baltimore, failed to report the loans in its HMDA filings. The lapse was caused by "internal system errors" at the nonbank, said CSBS. CitiFinancial eventually submitted HMDA reports on the loans in question. Regulators said that even though the loans were omitted by CitiFinancial the lender's behavior "does not in any way demonstrate a pattern or practice of discriminatory lending." The loans accounted for about 10% of CitiFinancial's production volume during the time in question.

Applications to refinance mortgages hit their lowest market share since the end of October, according to the Mortgage Bankers Association's Market Composite Index for the week of March 19. The MCI, a measure of mortgage loan application volume, decreased 4.2% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index decreased 3.9% compared with the previous week. The Refinance Index decreased 7.1% from the previous week and the seasonally adjusted Purchase Index increased 2.7% from one week earlier. The market share of refi applications fell to 65% for the survey period, down from 67.3% during the previous week. On the other hand, the market share of adjustable-rate mortgage applications is back at 4.8%, up from 4.6% for the previous week. The average contract interest rate for the 30-year fixed-rate mortgage has been bouncing back and forth around the 5% mark in recent weeks. For the most recent week, the index is again at 5.01%, up 10 basis points from the previous week's 4.91%, with points declining to 0.76 from 1.30 (including the origination fee) for loans with an 80% percent loan-to-value ratio, the association reported. The average contract interest rate for 15-year FRMs increased by 9 bps to 4.33%. The average contract interest rate for one-year ARMs was unchanged at 6.75%.

New government figures show that home prices fell 0.6% in January after a 2% drop in December, a sign that the housing market is far from being on a steady road to recovery. According to a home price index compiled by the Federal Housing Finance Agency, prices fell in six geographic regions but rose in two: a 2% gain for the Mountain region, and a 0.4% improvement in the West North Central. Prices in the Pacific region remained unchanged. Over a 12 month-period ending in January, home prices are down 3.3% based on residential loans purchased in the secondary market by Fannie Mae and Freddie Mac. The December drop was revised downward from 1.6%, the GSE regulator said. Since January 2009, prices have dropped 3.3% to a seasonally adjusted 194 index value. The FHFA HPI is down 13.2% from the peak in April 2007.

New home sales fell for the fourth consecutive month in February but sales were down by only 2.2%, despite severe winter weather in many parts of the country. The U.S. Census Bureau reported that sales of newly constructed homes fell to a seasonally adjusted annual rate of 308,000 in February from a 315,000 rate in January. The January rate was revised upward from 309,000, which means the drop in sales from December to January was 8.9%, as opposed to 11% as originally reported. The Census Bureau report shows that sales in February fell 20% in the Northeast and 18% in the Midwest. Sales were up 20% in the West. New home sales have slumped to the lowest level since 1963, according to Weiss Research analyst Mike Larson. "The market remains stuck in the doldrums," he said. But he expects some pick up in sales in March and April with the homebuyer tax credit due to expire at the end of April. "The credit-fueled pop won't be anything like what we saw the first time around, however," Larson said.

I received a very good question recently via e-mail and I thought I'd share it with you. You may have heard me comment on this topic before but it bears repeating. The question went something like this: "Sue, I'm an experienced loan officer thinking about getting into the reverse mortgage business, but I'm only 31 years old. I am concerned that my senior clients will not want to work with me because I am so much younger than they are. Should I even try?"

General Growth Properties, Chicago, one of the largest commercial REITs in the nation, said director Glen Rufrano has resigned from its board. In a new SEC filing, the company said his departure "is not due to any disagreement between Mr. Rufrano" and the company. General Growth is a real estate investment trust that invests and owns shopping malls, master planned communities, and other CRE assets.

Architects are the first to feel the pain of a sagging housing market and the first to see the beginnings of an upswing. So if the recent uptick in project inquiries received by the Dallas- based Humphries and Partners is any indication, the apartment business is starting to look up. The highly-regarded design firm, which last year submitted the largest number of new FHA 221(d)(4) financed market rate projects of any architect in the country, hasn't been overwhelmed by requests from multi-family developers, but "we are encouraged by positive signs in the market," said Mark Humphries. "Not a deluge, but strong," Humphries said of the inquiries. "The wise apartment developers recognize that interest rates will never be this low, construction volume will never be this low, construction costs will never be this low, and the pending demand is going to be the largest growth in apartments ever seen."