Origination

Credit Suisse Group, Zurich, took another sizable commercial mortgage-backed securities writedown during the first quarter but fared well in several other areas including secondary trading of U.S. residential mortgage-backed securities. The company said it took 1.4 billion Swiss francs ($1.2 billion) in commercial mortgage-backed securities writedowns during the period. Strong results in secondary trading of U.S. RMBS and other areas allowed the company as a whole to generate 2.0 billion Swiss francs ($1.7 billion) in net profit during the quarter.

The average weekly 30-year mortgage rate is near its record low but lower than the average short-term mortgage rate for the second week in a row, something Freddie Mac said has not happened since it began tracking adjustable-rate mortgages in 1984. The average rate for a 30-year fixed-rate mortgage was 4.80%, down from 4.82% the previous week and 6.03% a year ago; the average rate for a 15-year FRM was 4.48%, unchanged from the previous week's 1991 survey-record low and down from 5.62% a year ago; the average rate for a hybrid five-year Treasury-indexed adjustable-rate mortgage was 4.85%, down from the previous week's 4.88% and 5.68% a year ago; and the average one-year Treasury ARM rate was 4.82%, down from the previous week's 4.91% and 5.29% a year ago. Average points were as follows: 0.7 for 30- and 15-year FRMs, 0.6 for five-year Treasury hybrids and 0.5 for one-year Treasury ARMs.

StoneWater Mortgage Corp., Tucson, Ariz., is "restructuring" its management team in the wake of a lawsuit filed against several members who had been part of the officers and directors of First Magnus Corp. Karl F.W. Young, president of StoneWater, in a statement said he and the others named in the suit would be stepping aside to focus their attention on defending themselves against the allegations while allowing StoneWater to continue without the distractions associated with it. The changes are effective on May 1. First Magnus Litigation Trust trustee Larry Lattig filed the suit. Among the 40 defendants named besides Mr. Young are Gurpreet Jaggi, former president and chief executive of First Magnus; Thomas Sullivan Sr., former chairman of First Magnus; Thomas Sullivan Jr., former vice president of First Magnus; Bill Gaylord, a former officer of First Magnus; Gary Malis, former chief financial officer of First Magnus and currently managing director of capital markets for StoneWater; and Dominick Marchetti, former First Magnus chief technology officer and current managing direct of loan production at StoneWater. Mr. Lattig alleges the seven men stripped $300 million from First Magnus to start StoneWater. The person answering a call at StoneWater for further details about the management change responded that the company was not answering media inquiries at this time.

Fitch Ratings, Chicago, has dropped Republic Mortgage Insurance Co.'s issuer financial strength rating from "A+" down to "BBB". The rating agency said it feels there is a reduction in the level of commitment at RMIC's parent company Old Republic Corp. to provide additional capital to the mortgage insurer; as a result RMIC is now being rated on a "stand alone" basis. The title insurance subsidiary, Old Republic Title Group, kept its IFS of "A+" but the rating was placed on Ratings Watch Negative in part because of operating results that continued to be challenged by the current operating environment. ORI lost $53.9 million ($0.23 per share) in the first quarter 2009, compared with a loss of $19.0 million ($0.08 per share) one year prior. RMIC had an operating loss of $144.6 million, compared with a loss of $122.3 million one year prior, while Old Republic Title had an operating loss of $9.0 million, an improvement over a loss of $12.6 million one year prior. ORI had previously purchased stock in MGIC Investment Group and The PMI Group as a long-term investment. As of March 31, 2009, those investments had an original cost of $416.4 million; an impaired cost of $106.8 million and a market value of $32.1 million.

Sales of single-family existing homes fell 2.5% in March after a bump up in February, but The National Association of Realtors is noticing more first-time homebuyers entering the market. The group reported that sales of existing single-family homes fell from a seasonally adjusted annual rate of 4.22 million in February to 4.1 million in March. "The share of lower priced home sales has trended up, indicating a return of many first-time homebuyers, which we also see in a parallel member survey," said NAR chief economist Lawrence Yun. "Sales in the upper price ranges remained stalled because of higher interest rates on jumbo loans," he added. The median price of a home sold in March was $174,900, down 11.5% from a year ago. IHS Global Insight economist Patrick Newport expects sales will pick up in the third quarter after house prices drop further, lending increases and first-time homeowners "jump into the market in great numbers to take advantage of the tax credit (worth up to $8,000) that expires Dec. 31.

An increase in a Federal Housing Finance Agency housing price index during February marks the first time it has risen two consecutive months since early 2007. The HPI that tracks Fannie Mae and Freddie Mac purchase mortgage transactions rose 0.7% in February and 1% in January. It last saw two consecutive months of increases in March and April of 2007. Prices in the Pacific Coast states rose 3.8% in February where a large proportion of sales involve foreclosed properties and short sales, particularly in California. FHFA senior economist Andrew Leventis said the agency's HPI is picking up a large proportion of distressed sales — contrary to the belief among some economists that the GSE-based index does not include REO sales. In the fourth quarter, "about 50% of our sample for California involved distressed sales," Mr. Leventis said. For the 12 months ending in February, the FHFA HPI was down 6.5%. "The U.S. index is 9.5% below its April 2007 peak," the government-sponsored enterprise regulator said.

An increase in a Federal Housing Finance Agency housing price index during February marks the first time it has risen two consecutive months since early 2007. The HPI that tracks Fannie Mae and Freddie Mac purchase mortgage transactions rose 0.7% in February and 1% in January. It last saw two consecutive months of increases in March and April of 2007. Prices in the Pacific Coast states rose 3.8% in February where a large proportion of sales involve foreclosed properties and short sales, particularly in California. FHFA senior economist Andrew Leventis said the agency's HPI is picking up a large proportion of distressed sales — contrary to the belief among some economists that the GSE-based index does not include REO sales. In the fourth quarter, "about 50% of our sample for California involved distressed sales," Mr. Leventis said. For the 12 months ending in February, the FHFA HPI was down 6.5%. "The U.S. index is 9.5% below its April 2007 peak," the government-sponsored enterprise regulator said.

Despite an overall decline in year-to-year sales and prices in March, the Houston housing market is entering the traditionally strong spring buying season on an upbeat note, according to the Houston Association of Realtors. While single-family home sales in March dropped 16.1% from the same period a year ago, they were up 27.8% from February, HAR reported. The median selling price for Houston area houses fell 4.4% in March to $145,000, but even at that, it was the highest monthly median so far this year. And when foreclosure sales are removed from the analysis, HAR said the median was flat at $168,000. Unfortunately, foreclosures still accounted for one in every four sales in the area in March. But that figure also is lower than the 34% share reported in January and the 28% share noted in February. The median price of repossessed houses that were sold in March was $84,000, an 11.3% dip from $94,700 a year ago. "It's too soon to predict exactly when the Houston real estate market will be in healthier territory, but the recent moderation in sales and pricing trends is an encouraging sign," said Vicki Fullerton, HAR chair and broker of record at RE/MAX of The Woodlands & Spring.

Refinancings are still driving gains in the Mortgage Bankers Association's Market Composite Index. The overall measure of mortgage applications increased 5.3% on a seasonally adjusted basis to 1172.2 from 1113.2 during the week ended April 17, according to the MBA's Weekly Mortgage Applications Survey. The increase in refis happened even though there was a slight increase in the average contract interest rate for 30-year fixed-rate mortgages. The rate inched up to 4.73% from 4.70% but points (including the origination fee) decreased to 1.12 from 1.23 for loans with 80% loan-to-value ratios, according to the association. On an unadjusted basis, the index increased 5.3% compared with the previous week and increased 76.9% compared with the same week one year earlier. The Purchase Index decreased 4.2% to 253.0 from 264.1 one week earlier on a seasonally adjusted basis, while the Refinance Index increased 7.7% to 6540.7 from 6071.7 the week prior. Refinancings increased to 79.7% of total applications from 77.8% the previous week, while adjustable-rate mortgages accounted for 1.4% of applications, down from 1.5% the week prior, the MBA said. The MBA can be found online at http://www.mortgagebankers.org.

PNC Financial Services plans to close Capstone Realty Advisors, its commercial mortgage banking unit, as part of an ongoing reorganization plan, National Mortgage News has learned. According to Fred Solomon, a spokesman for PNC, the decision to close Capstone was due in part to the current economic landscape. "We determined Capstone did not align with PNC's core business model," he said. Capstone's existing loans in its portfolio will be reassigned to various departments and subsidiary companies of PNC that are the most well-equipped to handle the loans. Mr. Solomon could not specify when the closing will go into effect. About a month ago PNC decided to pull the plug on the warehouse lending operation of National City, a troubled bank it bought at yearend.