Origination

Freddie Mac said chief executive David Moffett — who took the helm of the GSE when it was placed into conservatorship in early September — has resigned from the company effective March 13. The mortgage investing giant said its board is working with the Federal Housing Finance Agency to appoint a successor and hopes to name an interim CEO before the 13th. Freddie said Mr. Moffett is leaving "to return to a role in the financial services sector." Mr. Moffett retired as vice chairman and chief financial officer of U.S. Bancorp in 2007. After his retirement, and before joining Freddie, he was a senior advisor to The Carlyle Group, working on financial service matters. Freddie Mac is supposed to report earnings soon. Last week Fannie Mae reported an annual loss of $58.7 billion.

HSBC said it plans to cease all new real estate secured originations through the HFC and Beneficial brands only, but will continue its prime bank and HSBC Mortgage Corp. business. The company also said its pretax profit in 2008 was about $9.3 billion, 62% down from about $14.9 billion in 2007 and it said it has a "difficult outlook" for 2009. About 6,100 positions will be impacted.

Freddie Mac said chief executive David Moffett — who took the helm of the GSE when it was placed into conservatorship in early September — has resigned from the company effective March 13. The mortgage investing giant said its board is working with the Federal Housing Finance Agency to appoint a successor and hopes to name an interim CEO before the 13th. Freddie said Mr. Moffett is leaving "to return to a role in the financial services sector." Mr. Moffett retired as vice chairman and chief financial officer of U.S. Bancorp in 2007. After his retirement, and before joining Freddie, he was a senior advisor to The Carlyle Group, working on financial service matters. Freddie Mac is supposed to report earnings soon. Last week Fannie Mae reported an annual loss of $58.7 billion.

PHH Corp., Mt. Laurel, N.J., said its mortgage production segment was profitable in December, allowing that unit to break even for the fourth quarter; but its mortgage servicing segment lost $382 million in the three-month period due to $445 million of valuation adjustments on mortgage servicing rights, contributing to a 4Q loss for the company as a whole. For the fourth quarter, the company lost $216 million ($3.98 per share), compared with net income of $12 million ($0.21 per share) for the same quarter of 2007. For the full year, PHH lost $254 million ($4.68 per share), vs. a net loss of $12 million ($0.23 per share) in 2007. The servicing adjustment consists of a $390 million writedown of the mortgage servicing asset and $55 million reduction in MSR value due to prepayments and portfolio decay. There also were foreclosure-related charges of $16 million and a net reinsurance loss of $13 million. PHH serviced just under $150 billion at the end of last year. The production segment's break-even results included $12 million of writedowns for scratch-and-dent and second-lien mortgage loans plus $4 million of reorganization costs. PHH originated $5.4 billion during the quarter, down from $8.3 billion in the same period in 2007. However, because of cost savings initiatives, the company said it believes it has lowered the break-even point for the production segment from $39 billion in annual volume to $27 billion.

Five of the 10 Federal Home Loan Banks that have thus far released unaudited 2008 financial results have taken fourth-quarter net losses and at least four of those have recorded "other than temporary impairments" for the year linked to private-label mortgage-backed securities market deterioration that the FHLBanks Office of Finance's warns could continue. The fourth-quarter net losses for these FHLBanks are as follows: Boston, $232 million; Pittsburgh, $188 million; San Francisco, $103 million; Dallas, $68 million, and Topeka, $63 million, according to the FHLBanks office in Reston, Va. Of these, FHLBanks that said they have recorded the OTTIs for 2008 as follows are: San Francisco, $590 million; Boston, $339 million; Pittsburgh, $266 million and Topeka, $5 million.

The FBI is investigating claims of a massive fraud at U.S. Mortgage Corp., Pinebrook, N.J., the privately held owner of Credit Union National Mortgage, which has filed for bankruptcy. More than three dozen credit unions allege the failed mortgage company owes them more than $110 million of loan proceeds it had collected for them as a servicer. The company's attorney said he is working with the U.S. Justice Department, the National Credit Union Administration, and regulators in several states in investigating the case. Lawyers for U.S. Mortgage could not be reached for comment. In documents filed earlier this week with the U.S. Bankruptcy Court, Picatinny FCU claims CU Mortgage sold more than $14 million worth of its mortgages to Fannie Mae without its knowledge and without paying the Dover, N.J.-based credit union the proceeds of the sale. Picatinny is one of more than three-dozen credit unions that have filed claims against the troubled lender. The largest unsecured claim is by Fannie Mae for $99.2 million, but the next 19 largest unsecured claims are all credit unions -- including the Treasury Department's CU.

Operating as a ward of the federal government, Fannie Mae posted a massive $25.2 billion loss in the fourth quarter, blaming its abysmal performance on asset- and derivative-related writedowns. For the year the GSE lost an eye popping $58.7 billion. The Congressionally chartered mortgage investing giant declared that it had a negative net worth of $15.2 billion at year-end - a gap that must be filled with taxpayer money. FHFA director James Lockhart already has requested that the Treasury Department cover the financial hole by increasing its preferred stock ownership stake in the company. In 2007, Fannie lost just $2.1 billion. It was taken over by the Federal Housing Finance Agency in early September of 2008. Its common stock continues to trade on the NYSE but at just 40 cents a share. Its main competitor, Freddie Mac, also is a ward of the government.

A number of real estate-related stocks have been affected by changes to several Standard & Poor's indices that are scheduled to go into effect after the close of trading on March 3. Being removed from the S&P MidCap 400 are Hovnanian Enterprises Inc., Red Bank, N.J., and The PMI Group Inc., Walnut Creek, Calif. At the close of trading on Feb. 24, S&P said, "Hovnanian and PMI Group had market capitalizations of $74 million and $64 million, respectively, whereas the minimum market cap needed to be admitted to the S&P MidCap 400 index is currently $750 million." Ventas, a health care real estate investment trust headquartered in Chicago, will be added to the S&P 500 in the GICS Specialized REITs Sub-Industry index. Trustmark Corp., a Jackson, Miss.-based financial services company, will replace Hormel Foods in the S&P MidCap 400, as Hormel is being moved to the S&P 500. Anchor BanCorp Wisconsin Inc., Madison, Wis., is being dropped from the S&P SmallCap 600, because it had a $19 million market cap, whereas the minimum market cap for this index is currently $200 million.

Capmark Financial Group Inc., Horsham, Pa., has a preliminary pre-tax loss of $800 million in the fourth quarter of 2008. The company said it is still reviewing certain accounts, including deferred tax assets, intangibles and certain investment securities for recoverability or impairment. Depending upon the outcome of this review, the fourth quarter net loss could be higher than the pre-tax loss mentioned above, which could cause its leverage ratio to exceed the maximum level permitted which, absent an amendment or waiver, would constitute an event of default. Capmark has already borrowed substantially all of the amounts available under its revolving credit facility; as of Feb. 24 it has $1.4 billion on hand to fund its operations. The commercial real estate company has commenced discussions with the lenders under its senior credit facility, and has hired Lazard Frères & Co. LLC as its financial adviser. Capmark is withdrawing its application with the Federal Reserve Board to become a bank holding company after evaluating the financial and other requirements for becoming a bank holding company. Fitch Ratings, New York, cut Capmark's long-term issuer default rating to 'B-' from 'BBB-' in reaction to the statement. "If these additional impairments are required, these could put the company in violation of its leverage covenant in the company's bank credit facility. Fitch is concerned that should this occur, and the company does not successfully obtain a waiver or amendment, Capmark's auditors may not give the company a 'going concern' opinion," the rating agency said.

The average rate for a 30-year fixed-rate mortgage inched up to 5.07% during the week ended Feb. 26 from 5.04% but remained well below where it was a year ago when it was 6.24%, according to Freddie Mac. Mortgage rates in general saw little change week-to-week because economic indicators have been mixed, said Freddie chief economist Frank Nothaft, noting that while consumer confidence in February dropped to the lowest level seen since records began in 1967, both producer and consumer price indices rose in January to levels higher than the market consensus. The average rate for 15-year FRMs during the latest week was 4.68%, the same as the previous week but down from 5.72% a year ago. The average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages was 5.06%, up from 5.04% the previous week but down from 5.43% a year ago. The average one-year Treasury-indexed ARM rate was 4.81%, up from 4.80% the previous week but down from 5.11% a year ago. Average points were as follows: 0.7 for 30- and 15-year FRMs and five-year Treasury-indexed hybrids, and 0.6 for one-year ARMs.