Origination

American Advisors Group, a reverse mortgage lender based in Irvine, Calif., will remove Peter Graves' image from its national television advertising following the actor's passing. Since October 2009, Mr. Graves had been the celebrity spokesman for the company. In a statement, AAG chief executive Reza Jahangiri said, "We will talk with his family and representatives at a later date about the future. Peter Graves was selected as AAG's spokesperson because of the man he was on and off the camera. He represented everything AAG aspires to be-trustworthy, respectful, intelligent and positive. We felt his values reflected ours, and our professional relationship was always positive for both parties." In an AAG press release earlier this year, Mr. Graves commented about why he was selected as a celebrity spokesman for reverse mortgages. "Well, it's a compliment certainly and I am humbled by the trust seniors have placed in me." Mr. Graves is best known for his role as Jim Phelps in the television series "Mission Impossible" and for his comedic turn as Captain Clarence Oveur in the movie "Airplane!"

Securitizers of mortgages and other assets would have to retain at least 5% of the credit risk with some exceptions for loans that meet certain regulatory standards, according to a bill introduced by Senate Banking Committee chairman Christopher Dodd, D-Conn. The financial services regulatory reform bill that chairman Dodd plans to mark up next week allows federal banking regulators and the Securities and Exchange Commission to reduce the risk retention on loans that exhibit high quality underwriting. However, the direction given the regulators seems to be very vague when clarity is needed, one source said. Industry groups were urging the lawmakers to create an exemption for 30-year fixed rate mortgages and other "qualified" mortgages. But the Dodd bill does not provide such a blanket exemption. The regulators also have the discretion to require originators to retain a portion of the credit risk.

Weighted average delinquencies in nonconforming United Kingdom mortgage-backed securities were stable in January, according to Moody's Investors Service. Weighted average delinquencies during the month were 19.3%. This is stable in the short-term and compared to June 2009's high of 21%. "In total, the performance of the UK nonconforming transactions has stabilized in recent months. However, the delinquency levels remain very high, and the prepayment rates remain low," says Georgij Ludmirskij, a Moody's senior associate.

The level of U.S. commercial real estate loan delinquencies in collateralized debt obligations has decreased slightly, according to Fitch Ratings. The CREL CDO delinquency rate in January dropped to 12.5% from 13% as a result of asset managers extending loans and disposing of troubled assets, according to Fitch. But Fitch continues to forecast an increase in delinquencies that will reach 25% by the end of the year. "The credit characteristics of many restructured loans remains questionable," said Fitch senior director Karen Trebach. Fitch's statistics reflect its CREL CDO delinquency index, which includes loans and assets that are 60 days or more delinquent, matured balloon loans and the current month's repurchased assets.

It was a productive year for special servicers in 2009, but there's a lot more where that came from, according to a new Fitch Ratings report. Special servicers resolved $8.7 billion in distressed loans last year, or 50% more than the previous year, but there is $74 billion still left in special servicing, Fitch said. In addition, "Recoveries on loans with losses are down markedly compared to prior years," said Fitch managing director Stephanie Petosa.

Moody's Investors Service has placed 40 RMBS resecuritization tranches with a current outstanding balance of $500 million on watch for possible downgrade. The ratings changes affecting these resecuritizations of mortgage-backed securities originally issued from 2005 to 2008 stem from a reconsideration of loss projections on the underlying MBS whose collateral includes: payment option ARMs, alt-A, jumbo and subprime-related loans. Moody's believes the increased loss projections on the underlying certificates are likely to affect not only principal recovery on junior resecuritization bonds but probably on senior resecuritization bonds as well. In December and January, thousands of resecuritized RMBS tranches from the 2005-2008 vintages were placed on watch for possible downgrade as a result of the loss projections.

The Granite Companies, Denver, Colo., are launching a new division to administer and develop new core business opportunities in public and private commercial construction lending markets. Granite Excell Management will be positioned to provide consulting and other professional services to lenders under the Granite umbrella. "Granite is strategizing for the changes lying ahead," said Bill Cobb, president and co-founder of The Granite Companies. The company said it expects to be in growth mode this year and beyond. Granite's other affiliates include Granite Loan Management, Granite Commercial Management and Granite Construction Inspections. GCM and GLM offer risk mitigation services, including construction REO and workout services, property condition assessment reports, and contractor acceptance. GCI provides residential and commercial property inspection services including construction draw, status/audit, damage assessment, tenant improvement, acquisition and development.

Lured by less competition for jobs, more and more immigrants are putting down permanent roots outside the major gateway cities of Los Angeles, Chicago and New York, according to a new paper by the University of Southern California's Lusk Center for Real Estate. The study of 60 mid-sized cities found an average rise in their immigrant populations of 27%, while the gateways are losing residents. "The anticipated rapid growth of U.S. immigrant populations in the coming decades coupled with their movement into mid-size metro areas has the potential to transform communities," said one of the paper's authors, director of research Gary Painter. "Our data suggest that immigrants are attracted to homes near active support networks of fellow immigrants and in places with lower rates of immigrant growth resulting in less competition for entry-level jobs." The study found that immigrants continue to have a lower ownership rate than native-born Americans with the same income and education levels, a finding that Mr. Painter said indicates that many may be waiting for other family members to join them. He suggested that cities trying to lure immigrants with employment opportunities also start developing networks of real estate agents and lenders with the same ethnic backgrounds and a willingness to build strong ties to the new arrivals. "Nurturing links within the immigrant community are key to building a new rank of homeowners," he said. The researcher pointed out that areas with declining home values could see prices stabilize thanks to a wave of first-time buyers who speak English as a second language.

One third of the streamlined refinanced loans that the Federal Housing Administration insured in 2009 are probably underwater, according to a New York University economics professor. Professor Andrew Caplin and his colleagues at the National Bureau of Economic Research estimate that 33.4% of the 330,000 FHA loans refinanced through the streamlined process during the first nine months of 2009 started out with negative equity. The professor told a congressional panel that the federal mortgage insurance agency and its auditors are underestimating the number of FHA underwater mortgages and the default risk of those loans. FHA doesn't require new appraisals when an existing FHA loan is refinanced, provided borrowers are current on their payments. FHA simply records the value of the property on a streamlined refinancing at the original purchase price, which ignores any decline in home values. In addition, the auditors treat streamlined refinancings as new loans instead of loan modifications. "Misclassification of streamlined refinances not only compromises the [FHA] loss model, but also results in underestimation of underwater mortgages," the professor testified. The NBER economists used the Federal Housing Finance Agency housing price index to estimate the number of underwater loans. "With all other house price indexes, the proportion in negative equity is even higher," Mr. Caplin told the House Financial Services housing subcommittee.

Sales of homes priced above $750,000 are starting to pick up after being frozen at a very low level last year. For most of last year, first time homebuyers were driving sales and they were focused "almost exclusively" on foreclosed properties and other bargains priced under $250,000, according to Walter Moloney, economics spokesman for the National Association of Realtors. "Beginning in October for the first time we started seeing increases in other sales categories," Mr. Maloney said. Sales of homes priced from $750,000 to $1 million jumped 40% in January from a year ago, yet accounted for only 1.3% of total sales. Over 70% of sales in January involved properties priced under $250,000. Sales in all price classes rose in January. "The trade-up market is now beginning to benefit," Mr. Moloney said. Despite this movement in the top tier, foreclosure and short sales are expected to remain at a very high level. Last year, distressed sales comprised 36% of existing home sales. "Maybe it will come down to 33% this year," said NAR chief economist Lawrence Yun. In a normal market, distressed sales make up 15% of sales. "By historical standards, we have never seen anything like this before," Mr. Yun said.