Origination

LaSalle Hotel Properties, a real estate investment trust based in Bethesda, Md., has priced a public offering of 10.75 million common shares at a price of $10.10 per share. Merrill Lynch & Co. is acting as sole book-running manager for the offering. Raymond James, Wachovia Securities and BMO Capital Markets are acting as co-lead managers. The underwriters have been granted a 30-day option to purchase up to over 1.6 million additional common shares to cover over-allotments if any. LaSalle intends to use the $103.8 million net proceeds of this offering to reduce amounts outstanding under its senior unsecured credit facility and under the unsecured credit facility of its taxable REIT subsidiary, LaSalle Hotel Lessee Inc., and for general corporate purposes.

Freddie Mac priced a new $4.5 billion five-year Reference Notes security at 99.781 to yield 2.547%, or 65 basis points more than five-year U.S. Treasury notes. The company had delayed the deal (CUSIP number 3137EACB3) a day in response to the death of its chief financial officer. The transaction was offered via a syndicate of dealers headed by Deutsche Bank Securities Inc., Goldman Sachs Group and Morgan Stanley.

The reverse mortgage business was a money loser in the most recent period for WSFS Financial Corp., which holds a majority stake in 1st Reverse Financial Services LLC. During the first quarter of 2009, 1st Reverse reported a pre-tax loss of $586,000, compared to a pre-tax loss of $832,000 for the fourth quarter of 2008. 1st Reverse, Westmont, Ill. recorded $556,000 in fee income during the first quarter, an increase of $107,000, over the fourth quarter of 2008. Expenses were $1.1 million during the first quarter, $142,000 below the fourth quarter of 2008. According to WSFS, 1st Reverse has modified its business plan to rely more heavily on retail loan originations, and also during the first quarter implemented cost reductions to improve expected breakeven origination volumes. It was approximately one year ago that WSFS, Wilmington, Del., acquired its stake in 1st Reverse.

Over the past three months there has been a small but noticeable acceleration in home price declines, reversing what appeared to be a stabilizing trend in the fall of 2008, the First American CoreLogic LoanPerformance Home Price Index found. The index for February 2009 marked the 24th consecutive month of home price declines. National housing prices fell 12.2% in February from a year ago. More than 700 Core Based Statistical Areas (were experiencing home price depreciation, up from 402 CBSAs experiencing depreciation just six months ago. More than 100 CBSAs were experiencing double digit declines, compared to 83 six months ago. Nevada (-26.7%) was the top ranked state for price depreciation, followed very closely by California (-26.5%), Arizona (-21.1%), Florida (-19.7%) and Rhode Island (-19.5%). The silver lining for these high depreciation states is that the rate of price declines has been decelerating the last few months. "Given that home prices are generally a lagging indicator of market health, we believe the largest declines have already taken place, but we expect home prices to continue to decline into 2010 as economic conditions and excess housing inventories dampen prices," said Mark Fleming, chief economist for First American CoreLogic.

New homes sales edged down 0.6% in March as an upward revision in the February report by 21,000 sales points to a market that may be finally bottoming out.The U.S. Census Bureau reported that sales of new single-family homes fell from a seasonally adjusted annual rate of 358,000 in February to 356,000 in March. The bureau originally reported 337,000 sales in February. Economists are expecting to see a bottom in home sales soon. In a speech on Monday (April 20) Federal Reserve governor Donald Kohn said "recent data suggest that the multi-year contraction in home sales and new construction may be nearing an end." He noted, however, that house prices will continue to fall for a while due to the large inventory of unsold homes on the market. Builders have an inventory of 311,000 unsold homes, which translates into a 10.7-month supply at the current sales pace, according to Census Bureau report.

Former chief executive David Moffett is returning to Freddie Mac to run the finance division in the wake of the apparent suicide of the company's acting chief financial officer David Kellermann.Freddie interim chief executive John Koskinen welcomed Mr. Moffett's offer to temporarily return as a consultant while Freddie searches for a permanent CFO. "He knows the company well from his time as the chief executive, and has built an impressive career in finance and accounting...with other leading public companies," Mr. Koskinen said.

Freddie Mac's issuance of mortgage-backed securities totaled $57.7 billion in March — nearly double its activity in February as a result of the surge in refinancings. The mortgage giant purchased $52 billion in refinanced mortgages in March, its largest refinance purchase month since 2003. The company also said it added $45.1 billion in mortgage assets to its investment portfolio, including $19.1 billion of its own MBS. And the mortgage investment portfolio grew to $867.1 billion as of March 31. Meanwhile, delinquencies continue to creep up. In March, the percentage of Freddie single-family loans that are 90 days or more past due or in foreclosure rose to 2.29%, up 16 basis points from the previous month, and up from 0.77% in March of 2008.

DebtX, Boston, will sell more than $269 million in commercial real estate, commercial & industrial and consumer loans from two Federal Deposit Insurance Corp. receiverships on May 12. The first sale consists of $190 million in loans from the Bank of Clark County, Vancouver, Wash., and consists of performing and non-performing loans secured by office, industrial, retail, healthcare, autos, and business assets. The second sale is of $79 million in loans from FirstBank Financial Services, McDonough, Ga., including performing and non-performing loans secured by retail, office, industrial, auto/consumer, and business assets. Due diligence materials for both transactions are now available at http://www.debtx.com.

Parkway Properties Inc., Jackson, Miss., has priced the sale of 6.25 million shares of its common stock in a public offering at $13.71 per share. In addition, Parkway has granted to the underwriter for the public offering an option for 30 days to purchase up to 937,500 additional shares of common stock to cover overallotments, if any. UBS Investment Bank is the sole underwriter for the offering. Subject to customary closing conditions, the offering is expected to close on April 27, 2009. Parkway intends to use the net proceeds from the offering to reduce outstanding borrowings under its line of credit and for general corporate purposes.

The residential mortgage banking business at PNC Bank of Pittsburgh earned $226 million for the first quarter of 2009 driven by strong loan origination activity and favorable income from servicing rights. The company has started reporting this as a separate line of business in the wake of its acquisition of National City Corp. Total loan originations were $6.9 billion for the first quarter, primarily originated under agency guidelines. Residential mortgage loans serviced for others totaled $168 billion at March 31, 2009 compared to $173 billion at Jan. 1, 2009. The decrease was due to payoffs exceeding new direct production during the quarter. Noninterest income at PNC was $440 million in the first quarter of 2009 driven by mortgage servicing rights net hedging gains of $202 million and loan sale revenue of $175 million that resulted from strong loan origination refinance volume. Meanwhile at Cincinnati's Fifth Third Bancorp, mortgage banking net revenue was $134 million in the first quarter of 2009, an increase of $163 million from the fourth quarter 2008 and a $37 million increase from the first quarter of 2008. First quarter originations were $4.9 billion, up from $2.1 billion the previous quarter. Net servicing revenue, before mortgage servicing rights valuation adjustments, totaled $2 million in the first quarter, compared with $22 million last quarter and $8 million a year ago. MSR valuation adjustments represented a net gain of $1 million in the first quarter of 2009, compared with a net loss of $96 million last quarter and a net loss of $3 million a year ago. Including gains in MSR balance sheet hedges reported in securities gains and losses, total mortgage banking revenue increased by $83 million from the previous quarter.