Origination

Commercial and multifamily mortgage debt outstanding rose 1.5% ($51.3 billion) in the second quarter, reaching a level of $3.44 trillion, according to an analysis of Federal Reserve Board data by the Mortgage Bankers Association. Considering only multifamily mortgage debt, the amount outstanding rose 1.9%, to $875 billion. The largest increase in percentage terms in holdings of commercial and multifamily mortgage debt occurred in the government-sponsored enterprise sector, where holdings grew by 6% in the second quarter. "Despite the persistent credit crunch, investors increased their holdings of commercial/multifamily mortgages in the second quarter," said Jamie Woodwell, the MBA's vice president of commercial real estate research. "The only major investor group to see a decline in their holdings was the commercial mortgage-backed securities market, which has been most profoundly affected by the credit crunch." The MBA can be found online at http://www.mortgagebankers.org.

Residential Capital LLC, the mortgage lending subsidiary of GMAC LLC, has agreed to sell its real estate brokerage, franchising, and relocation business to the residential property services unit of Brookfield Asset Management Inc., Toronto. Brookfield announced the deal Tuesday but did not say how much it would pay for GMAC Home Services LLC. The deal is expected to close next quarter. ResCap had said this month that it was "evaluating strategic alternatives" for the home services business. At the time, the ailing Minneapolis lender also announced plans to lay off 5,000 employees, or 60% of its work force; close the 200 retail offices that use the GMAC Mortgage brand; and cease originations through its Homecomings wholesale channel.

Amy Brandt, who was the chief executive officer of WMC Mortgage Co. during that alternative-A lender's salad days, has returned to the industry by buying two servicers and an Internet originator. Vantium Capital Inc., her private-equity firm, was planning to announce that it has acquired the assets of Strategic Recovery Group LLC, a Plano, Texas-based company that collects on defaulted and charged-off debts; its Acqura Loan Services LLC, which manages subprime portfolios; and Strategic Recovery's online-only lending business, which uses the brand name Go Financial Solutions. Vantium, a New York company, would not make executives available for interviews. In a press release, Ms. Brandt said, "We will use these companies as a platform to develop, or acquire, new businesses that will serve the financial and investment markets." The firm did not say how much it paid for any of the assets. It has financial backing from Leon Black's Apollo Global Management LLC, the New York private-equity firm that sold WMC Mortgage to General Electric Co. in 2004. Acqura is to service assets bought by a Vantium fund managed by Michael Commaroto, the former head of private-label mortgage-backed securities at Deutsche Bank AG, Vantium said.

Bank of America late Monday fired Drew Gissinger, a top production executive at Countrywide Home Loans who was in charge of retail, wholesale, and correspondent lending, according to company officials. Also let go were: Brian Hale, president of retail; Charlie Rogers, managing director of Countrywide's nationwide retail network; and Tom Hunt, managing director of the western U.S. retail branch network. Mr. Gissinger once carried the title of president and chief operating officer of Countrywide Home Loans. Meanwhile, BoA named Craig Buffie the top executive in charge of sales and fulfillment, overseeing 14,000 employees in the mortgage group. BoA bought Countrywide on July 1.

Before the Senate Banking Committee approves a $700 billion bailout of the credit and mortgage markets, some of its members want assurances that the government will not overpay for subprime MBS -- plus promises that taxpayers will get warrants in companies that sell to the government. At a hearing Tuesday -- attended by every senator on the committee as well as a noisy faction from ACORN that was silenced by committee Chairman Christopher J. Dodd, D-Conn. -- several elected officials wanted to know at what price the government would purchase mortgage-backed securities. "How will the assets be priced?" asked Sen. Robert Menendez, D-N.J. "If the seller doesn't like the price, will the taxpayer be asked to pay a premium?" The question was aimed at Treasury Secretary Henry Paulson, who has been putting together the bailout plan over the past few weeks. Committee members expressed dismay at having to spend so much of the taxpayers' money to help bail out Wall Street. "It's financial socialism," said Sen. Jim Bunning, R-Ky. "And it's un-American."

The Securities and Exchange Commission revealed Tuesday that it has 50 pending subprime-related investigations involving residential lenders, investment banking firms, credit rating agencies, and other players involved in the securitization process. Speaking before the Senate Banking Committee, SEC Chairman Christopher Cox said commercial banks and broker-dealers who sold subprime mortgage-backed securities are also being looked at. "We are investigating whether mortgage lenders properly accounted for the loans in their portfolios, and whether they established appropriate loan loss reserves," he told the committee. The agency, which is responsible for overseeing bond disclosures on publicly registered securities, said it is investigating whether lenders adequately disclosed the risk profiles of the mortgages they were securitizing. In late 2006 Lewis S. Ranieri, the co-inventor of the MBS, criticized the SEC in a speech at the National Press Club, saying the agency needs to play a central role in forcing issuers to increase disclosures on bonds collateralized by nontraditional residential loans. At the time, Mr. Ranieri told National Mortgage News that "this isn't an indictment of the SEC," but added that "the transparencies are not what they should be."

Delinquencies on mortgages supporting commercial mortgage-backed securities increased 1 basis point to 0.44% in August, according to a Fitch Ratings loan delinquency index. The rating agency said it expects retail properties to lead the rise in CMBS delinquencies. "While delinquent retail loans represent only 0.26% of all loans within the sector, retail delinquencies increased 29% over July's total," said Susan Merrick, a Fitch managing director who heads the rating agency's U.S. CMBS group. "Fitch also continues to monitor an additional 45 retail loans which are performing, but have been transferred to special servicing."

General Growth Properties Inc., a Chicago-based real estate investment trust, has announced that the company is reviewing its financial and strategic options to align the value of its common stock more closely with that of its real estate portfolio. The REIT said it expects to be able to offer long-term fixed-rate portfolio mortgage financing to lenders by late November, and will "actively pursue several sources of financing for the company's near-term maturing obligations" in the interim. The options under review for generating capital include asset sales, the sale of joint venture or preferred equity in selected assets, a capital infusion, and strategic business combinations, the company said. The REIT can be found on the Web at http://www.ggp.com.

Fitch Ratings has affirmed the ratings of Detroit-based Comerica Inc. and its subsidiaries but revised their rating outlook to negative in part due to problem loans tied to the residential housing market. While citing the company's "solid tangible capital base, sizable non-interest-bearing deposit base" and "sound risk management practices," Fitch said the negative outlook reflects "rising levels of nonperforming assets, weaker earnings, and deterioration in capital ratios." The outlook revision also takes into account the fact that the company could be hurt by the deteriorating economic environment. "Since the fourth quarter of 2007, problem loans have been increasing due to the downturn in the residential housing market," the rating agency said. "The deterioration in credit quality is largely emanating from [Comerica's] residential construction book, particularly in Michigan and California." Fitch can be found online at http://www.fitchratings.com.

Federal Trust Corp., a thrift holding company based in Sanford, Fla., has entered into a nonbinding letter of intent with an unnamed investor group in New York and Florida that would acquire control of the company by investing $40 million to $55 million. The company is under Office of Thrift Supervision orders to raise capital by Sept. 30, or failing that, enter into a merger agreement by Nov. 15. Federal Trust had reached an agreement with Sidhu Advisors FDT LLC on Aug. 11 under which Sidhu would have invested $30 million in the company. The latest statement from Federal Trust said those negotiations have been discontinued. Jay Sidhu, the former chairman and chief executive of Sovereign Bancorp Inc., Philadelphia, controls Sidhu Advisors.