Origination

Subsidiaries controlled by BlackRock Financial have increased their stake in PHH Corp., Mt. Laurel, N.J. -- a top 10 ranked residential servicer -- to 9.67%, according to a new filing with the Securities and Exchange Commission. Previously, BlackRock affiliates controlled about 5% of PHH's outstanding common stock. The new SEC filing says the investment-banking firm now owns 5.27 million shares of PHH's common stock. Previously they owned 2.5 million common shares. At press time spokespersons for both PHH and BlackRock had not returned telephone calls about the investment. The publicly traded BlackRock owns the stake on behalf of five different advisory subsidiaries, all of which carry the BlackRock name. PHH Mortgage, the nation's largest private label lender, services about $146 billion in home mortgages. Based in New York, BlackRock is headed by Larry Fink, a pioneer in the mortgage-backed securities market.

Lenders scaled back new apartment and commercial real estate lending during the fourth quarter of last year, according to the Mortgage Bankers Association. Commercial/multifamily originations were 80% lower than during the fourth quarter of 2007, and the decline was seen across all property types and investor groups (with CMBS conduits seeing origination activity fall the most, 98% compared with the year-earlier quarter). Jamie Woodwell, the MBA's vice president of commercial real estate research, said commercial and multifamily lending for all of 2008 was 60% lower than in 2007. "Between the worsening economy and the continued credit crunch, lenders are extremely cautious about lending and borrowers are likely to hold onto the assets and the loans they already have."

Federal Housing Administration single-family endorsements totaled $71.7 billion in the first quarter of fiscal year 2009, up 235% from the same period a year ago. Lenders originated $22.8 billion in FHA loans in December alone, compared to $21.4 billion during the three months in the first quarter of FY 2008. The latest data also shows that FHA condominium and 203(k) purchase/improvement loans are growing at a fast clip. Lenders made $3.7 billion in condo loans in the first quarter of FY 2009, up 314% from a year ago and $541.5 million in 203(k) loans, up 255%. The condo and 203(k) loans are included in the $71.7 billion total of FHA single-family loans. Meanwhile, defaults continue to creep up, despite a 24% increase in FHA's portfolio of insurance-in-force over the previous four quarters. FHA loans 90 days or more past due hit 6.8% as of December 31, up from 5.98% in the first quarter of FY 2008.

The Market Composite Index, an overall measure of mortgage applications, decreased 24.5% on a seasonally adjusted basis to 600.6 from 795.4, as there was a significant drop-off in refinancing applications during the week ended Jan. 30, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey. On an unadjusted basis, the Index decreased 23.5% compared with the previous week and 43.9% compared with the same week one year earlier. The Purchase Index decreased 9.8% to 235.9 from 261.4 one week earlier on a seasonally adjusted basis, while the Refinance Index decreased 30.3% to 2722.7 from 3906.3 the week prior. Refinancings decreased to 66.7% of applications from 73.2% the previous week, while adjustable-rate mortgages accounted for 2.5% of applications, an increase from 2.1% for the previous week, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.19% from 5.28%, with points (including the origination fee) increasing to 1.20 from 1.12 for loans with 80% loan-to-value ratios, the association reported. The MBA can be found online at http://www.mortgagebankers.org.

Tim Wilson is the new president of affiliated businesses for The Long & Foster Cos., Chantilly, Va. In this position, he oversees Long & Foster Real Estate Inc., Prosperity Mortgage Co., Long & Foster Insurance Agency Inc., and Long & Foster Settlement Services. Mr. Wilson replaces Dave Stevens, who was recently promoted to president at The Long & Foster Cos. Most recently, Mr. Wilson was executive vice president and director of wholesale lending at Wachovia Bank, Charlotte, N.C. and before that, group senior vice president and national loan manager for World Savings & Loan, Oakland, Calif.

Freddie Mac's multifamily whole loan and bond guarantee business set a record of $24 billion in mortgage settlements in 2008, according to the government-sponsored enterprise. This represented an increase of more than 10% over 2007, Freddie Mac said. The GSE also noted that during 2008 its purchases in the moribund commercial mortgage-backed securities dropped dramatically to just $1.4 billion from $22 billion in 2007.

There are $171 billion of commercial and multifamily mortgage loans held by non-bank lenders and investors that are set to mature this year, a survey from the Mortgage Bankers Association said. The Commercial Real Estate/Multifamily Survey of Loan Maturity Volumes found that short-term floating-rate mortgages in commercial mortgage-backed securities and mortgages held by credit companies, warehouse facilities and other investors are more likely to mature in 2009 and 2010 than are fixed-rate CMBS mortgages, mortgages held by life insurance companies or multifamily mortgages held or guaranteed by Fannie Mae, Freddie Mac or FHA. MBA found that $120 billion of non-bank commercial/multifamily mortgages are scheduled to mature in 2010. "Substantial concerns have been raised about the volume of mortgages maturing in the face of the current credit crunch," said Jamie Woodwell, MBA's vice president of commercial real estate research. "This study shows that while the dollar volume of maturing non-bank mortgages represents only one-tenth of the total outstanding balance, it is not evenly spread across investor and lender groups. Across all these investor groups, commercial/multifamily lenders and servicers have a wide variety of tools to help them deal with maturing mortgages, which should mitigate - but not eliminate - the impact of maturities in 2009." Of the total non-bank holdings of commercial/multifamily mortgages coming due in 2009, 52.8% is in CMBS, collateralized debt obligations or other forms of asset-backed securities, and an additional 33.6% is held by credit companies, warehouse facilities or other investors. Life insurance companies hold only 9.8% of the non-bank mortgages maturing in 2009, and 3.8% are held or guaranteed by Fannie Mae, Freddie Mac or FHA.

Fannie Mae is loosening a restriction to encourage lending to real estate investors, a group that has been widely blamed for contributing to the housing meltdown but is also seen by many as critical to a recovery. The government-sponsored enterprise told lenders last week that starting next month it will buy or guarantee home loans made to borrowers that have mortgaged as many as nine other properties. Currently, Fannie will not touch a loan if the borrower has financed more than three other homes. The change is meant "to bring added liquidity to the investor segment of the market and help hasten the recovery," Fannie said. However, the GSE, which said it wants to make more loans available to "high-credit quality, bona fide ... experienced investors," is tightening other requirements for this type of borrower. Starting in June, an investor will have to hold six months of payments in reserve, rather than two months, to get a single-family loan approved by Fannie's automated system.

Treasury Secretary Timothy Geithner Tuesday morning promised that a "comprehensive" government program to revive the housing market and help consumers avoid foreclosure is in the works but offered no details on what the effort might entail. The new Treasury secretary said specifics of the plan will be released in the next few weeks. At press time, Treasury officials were offering no guidance on the issue. "Millions of Americans have lost their homes, and millions more live with the risk that they will be unable to meet their payments or refinance their mortgages," said Mr. Geithner. Meanwhile, the new Term Asset-Backed Securities Loan Facility, or TALF, does not include single-family mortgages. (See related story.)

The government sponsored enterprises' regulator wants the Obama administration to use some of the second installment of the Troubled Asset Relief Program funds to shore up the capital bases of the private mortgage insurance companies so that Fannie Mae and Freddie Mac can finance more homebuyers. "I am hopeful that TARP II will address the private mortgage insurers' capital issues," Federal Housing Finance Agency director James Lockhart told an American Securitization Forum meeting in Las Vegas. The government-sponsored enterprises depend on PMI to serve borrowers with down payments of less than 20%. But the PMI companies have increased premiums, tightened underwriting and become less competitive as a result of default and foreclosure losses. Due to "stresses on mortgage insurance company capital," Mr. Lockhart said, the GSE market share has fallen while the market share of government-insured Federal Housing Administration/Veterans Affairs loans has increased dramatically. "The private mortgage insurers' market share versus FHA/VA fell from nearly 80% in the first quarter of 2007 to about 30% in the third quarter of 2008," the GSE regulator said.