Origination

Wilshire Enterprises, Inc., Newark, N.J., has appointed Kevin B. Swill as president and chief operating officer. Mr. Swill joins Wilshire after serving since 2001 as president of Westminster Capital, the financing arm of The Kushner Companies, and president of Kushner Properties. "With his extraordinary combination of directly relevant industry experience, intimate knowledge of the properties and people in the New York and New Jersey real estate markets, and well-established network of senior-level contacts in real estate finance, we expect Kevin to play a major role in helping Wilshire take advantage of the current turmoil in our industry to build long-term value for our shareholders," said Wilshire chairman and chief executive Sherry Wilzig Izak. In 2000, Mr. Swill was an executive director of originations for CIBC World Markets, with responsibility for review and approval of real estate transactions for the commercial mortgage-backed securities market. Earlier, he was senior originator for the Northeastern United States at Deutsche Banc Mortgage Capital LLC, and originator in the Conduit Group at Merrill Lynch Real Estate Investment Banking. On Dec. 4, the proposed merger between Wilshire and NWJ Apartment Holdings Corp. was terminated when Wilshire was informed by NWJ that in the current economic and lending environment, it was not able to secure the financing of the residential properties required to close the merger.

Now that Fidelity National Financial Inc., Jacksonville, Fla., is purchasing some of the units of LandAmerica Financial Group, Richmond, Va., A.M. Best Co., Oldwick, N.J., has once again placed the financial strength rating and issuer credit ratings of FNF and its eight title insurance members under review with negative implications. The ratings had been removed from under review status when the original FNF-LandAmerica deal was cancelled on Nov. 21. Subsequent to that, LandAmerica filed for bankruptcy protection and agreed to sell four of its underwriting subsidiaries to FNF. "The proposed acquisitions are expected to result in a significant increase in underwriting leverage for Fidelity, which may result in adversely impacting its financial strength and risk-adjusted capitalization. Additionally, the acquisition is expected to carry execution risks of integrating two large insurance organizations." the Best statement said. Previously, Fitch Ratings, Chicago, placed the issuer default rating and insurer financial strength ratings of FNF and/or its subsidiaries on Rating Watch Negative as a result of the revived transaction.

Grandbridge Real Estate Capital LLC, Charlotte, N.C., the commercial mortgage banking subsidiary of Branch Banking and Trust Co., Winston-Salem, N.C., will buy Houston-based commercial mortgage banking firm Live Oak Capital Ltd. Live Oak Capital specializes in debt and equity placement and loan servicing for the commercial real estate industry. Founded in 2000, the privately owned company has closed more than $7 billion in commercial real estate capital transactions. The acquisition is expected to be completed by the end of the month. Terms were not disclosed. "Partnering with the blue-chip professionals at Live Oak will strengthen our commercial mortgage franchise in Texas with a highly experienced business and management team," said Grandbridge chief executive Tom Dennard. "This is a firm whose principals have more than 125 years of combined industry experience and one that has achieved national recognition for its customer service, integrity and intellectual capital." Grandbridge has a servicing portfolio of $22.5 billion representing 100 capital providers. It was founded in October 2007 when BB&T combined Laureate Capital LLC of Charlotte with Collateral Real Estate Capital LLC of Birmingham, Ala. Grandbridge already operates a loan production office in Dallas.

Kite Realty Group Trust, Indianapolis, has promoted John A. Kite, its current president and chief executive, to chairman and CEO. Alvin E. Kite Jr., the current chairman, has been given the title of chairman emeritus. Thomas K. McGowan, previously senior executive vice president and chief operating officer, has been promoted to president and COO. Alvin Kite founded the REIT and has served as chairman since August 2004, when the company first went public.

The KKR-controlled Capmark Financial Group - one of the nation's largest commercial mortgage banking firms - has hired Jay N. Levine as its new president and chief executive. He replaces William F. Aldinger III, who resigned his positions as president, chief executive and chairman. Mr. Aldinger, who once ran subprime giant Household Finance, will serve as a consultant to Capmark. Mr. Levine formerly was president and chief of RBS Global Banking & Markets, North America. He also served as chief executive officer of RBS Greenwich Capital with responsibility for the company's institutional, banking and fixed-income businesses in the United States. Dennis D. Dammerman was named chairman of Capmark. Capmark, formerly known as GMAC Commercial Holding Corp., was acquired in March 2006 by an investor group led by affiliates of Kohlberg Kravis Roberts & Co., Five Mile Capital Partners LLC, Goldman Sachs Capital Partners and Dune Capital Management LP.

House Financial Services Committee chairman Barney Frank, D-Mass., wants to create a new "set of rules" for the securitization of mortgages and empower servicers to modify loans as part of his 2009 agenda. "Our job is to come up with a set of rules that diminishes excessive risk-taking while still giving us the benefits of securitization," Rep. Frank told a Consumer Federation of America Washington conference. He said issuers of mortgage-backed securities will have to retain some liability. "They can't lay off all of the risks" to investors. Servicers of MBS should be able to make decisions about resolving troubled mortgages, he advocated. The committee chairman also said he expects to pass a tough subprime bill that will do away with yield-spread premiums that gives mortgage brokers an incentive to raise interest rates.

The plummeting yield on the 10-year Treasury - which historically has served as a benchmark for mortgage rate direction - hit a new 45-year low on Friday. Early in the afternoon the benchmark yield was at 2.57%, more than 20 basis points lower than where it was earlier in the week. The last time the 10-year Treasury yield was lower came in 1962 when it was at 2.55%, according to Thomas L. di Galoma, managing director and head of U.S. Treasuries at Jefferies & Co. An employment report released Friday morning has been a "focus" for Treasuries as has "the plan to lower mortgage rates by the Fed/Treasury," Mr. di Galoma and fixed-income researchers at Jefferies said in their Friday morning Treasury market report. International rate cuts also have played a role, the researchers said.

Mortgage companies dropped 8,400 full-time employees from their payrolls in October after mortgage originations fell to an eight-year low in the third quarter. The U.S. Bureau of Labor Statistics reported that employment in the mortgage banker/broker sector fell to 343,400 positions from 351,800 in September, a 9% decline from a year ago. The mortgage industry took its biggest job hit in 2007 when 110,000 workers lost their jobs or left the industry. Friday's job report shows "we are the deepest part" of the recession, said Brian Bethune, chief U.S. financial economist at IHS Global Insight. The overall U.S. unemployment rate rose to 6.7% as 533,000 workers lost their jobs in November. Although the government's response to the financial crisis came six to 12 months too late, said the economist, he expects mortgage rates to fall below 5%, and spur a surge in refinancing activity. "It is going to get hot," Mr. Bethune said. But he warned there will be a "huge bottle neck" because the banks don't have people in place in process the applications.

Apollo Management, an investment fund controlled by Leon Black, is one of three finalists for the government controlled IndyMac Bank, mortgage and investment banking officials told MortgageWire. Apollo is backing Vantium Capital, managed by Amy Brandt, the former head of subprime lender WMC Mortgage of California. Vantium is investing in both troubled mortgages and functioning as a "scratch and dent servicer." A spokesman for Apollo declined to comment. A FDIC spokeswoman would not discuss the status of the sale except to say, "We'll announce the winning bidder by year end." Early on in the bidding process two other investment funds - Cerberus Capital and J.C. Flowers & Co. - expressed an interest in the thrift, which services roughly $180 billion in mortgages. IndyMac, created by Countrywide Home Loans two decades ago, is based in Pasadena, Calif.

There's little hope to stem the tide of rising mortgage delinquencies and defaults in the short term, according to economists who follow the industry. Jay Brinkmann, chief economist for the MBA, said that declining home values, which limit the ability of troubled borrowers to sell a home, have increased the "roll rate" of 30-days delinquent loans in one quarter that go into foreclosure during the next quarter. In the 1990s, about 10% of 30-day past due loans moved into foreclosure. Today, about 30% of short-term delinquencies roll into foreclosure, he said during a conference call to discuss the MBA's delinquency survey. Moreover, in hard hit states, the roll rate is even higher, 75% today in California, for instance. And with unemployment rising fast, there's little hope for relief in the short term, according to Ryan Sweet, an economist at Moody's Economy.com. He told MortgageWire that he expects the unemployment rate to rise to 8.5% by early 2010. "Mortgage credit quality is going to decline well into 2009," Mr. Sweet said.