Origination

California is usually the bellwether of the housing market, but new home production in the Golden State is expected to drop to the lowest level since accurate counts of statewide totals began in 1954, according to the Construction Industry Research Board. The board is forecasting just 79,000 starts for all of 2008. During the first four months of the year, single-family home production was down 58% from that of the same period last year, with 15,254 units permitted, while multifamily home production fell 24%, with 14,419 permits pulled. Overall, production was off 46%, and start figures for May show the slowdown continuing. Total starts for the month declined 37% from the level recorded a year earlier, CIRB reports. Just 3,531 single-family permits were pulled in the entire state in May. Don't look for the things to pick up in California any time soon, either, according to Alan Nevin, chief economist of the California Building Industry Association. The prospect of a major recovery by the end of the year is looking less and less likely as demand for new construction continues to wane in the face of the foreclosure crisis, Mr. Nevin said. "We see little change in the status of the new residential construction market for the balance of 2008 as homebuilders opt to wait out a return of demand," he said.

The Illinois attorney general has sued Countrywide Financial Corp. and its chairman Angelo Mozilo for engaging in allegedly unfair and deceptive lending practices that placed borrowers into risky subprime and payment-option mortgages they could not afford. "Countrywide used egregious unfair and deceptive lending practices to steer borrowers into loans that were destined to fail," AG Lisa Madigan said. The lawsuit alleges that Countrywide weakened its lending standards and pushed reduced document loans to qualify more borrowers and increase its loan production. "Through the investigation, we have learned the larger story of how Countrywide created and implemented a corporate strategy that resulted in widespread loan failures," Ms. Madigan said. Countrywide, which is being acquired by Bank of America, had not responded to a request for comment by deadline time. The Illinois AG wants the Cook County Circuit Court to order the Calabasas, Calif.-based lender to rescind or restructure all the loans it originated using the allegedly unfair and deceptive practices.

Classes RS-1 through RS-7 of J.P. Morgan Chase series 2007-FL1 commercial mortgage-backed securities have been placed on Rating Watch Negative by Fitch Ratings. The negative rating actions were attributed to deteriorating cash flow in connection with a Resorts International loan secured by three casino/hotel properties in Atlantic City, N.J., and Tunica, Miss. Fitch can be found on the Web at http://www.fitchratings.com.

IRR-Residential, a residential appraisal firm based in Westwood, Kan., has announced the addition of four new affiliates and the appointment of Thomas M. Munizzo as chief appraiser and compliance officer. The new offices are IRR-Residential Krantz Appraisal Firm, which serves six Lake Ozark, Mo. counties; IRR-Residential Value Experts, with two offices servicing the New Orleans and Baton Rouge, La. markets; and IRR-Residential Rayburn Appraisals & Consulting, which serves the Chicago-area market. Mr. Munizzo started his career with a third-generation, family-owned business, Munizzo Appraisal Co., IRR-Residential said. The firm was acquired in 2000 by Real Estate Appraisal Services (a subsidiary of Charter One Financial Services), and Mr. Munizzo joined REAS as regional vice president and chief appraisal manager. The company can be found online at http://www.irr-residential.com.

Radian Guaranty, the Philadelphia-based primary mortgage insurance subsidiary of Radian Group, has introduced enhanced functionality to its MI Online Web-based system for mortgage insurance ordering, servicing, and claims submissions. Designed to streamline the claims process and improve the online experience, the enhancements allow clients to view claims around the clock, review documentation requirements, access a more detailed explanation of benefits, and obtain real-time information on payment status, the company said. The new features include a Claim Status Information section that allows clients to review a snapshot of a claim's details, including processing status, and a Claim Payment Information section that displays three key pieces of data for paid claims (claim payment, date paid, and payee) and a new hyperlink to the main Certificate Inquiry screen. The system can be found online at https://mionline.radianmi.com.

Freddie Mac has announced the renewal of an alliance agreement with the Credit Union National Association. The alliance provides participating credit unions with a comprehensive set of technological services, mortgage products, and correspondent lending, such as Freddie Mac's borrower outreach initiatives, according to the government-sponsored enterprise. "With the current economic climate, this renewed alliance ensures that credit unions will continue to have options to succeed in the mortgage lending market, including affordable lending solutions to meet the needs of low- to moderate-income borrowers," said Wes Millar, senior vice president of CUNA Strategic Services. The alliance provides expanding execution and mortgage product options; customized learning opportunities, such as assistance and training on low-downpayment mortgages; and technological advantages such as Freddie Mac's Loan Prospector automated underwriting service and a business-to-consumer website for online mortgage lending. Freddie can be found online at http://www.freddiemac.com.

The Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators have announced that six more states will begin using their Web-based mortgage licensing system on July 1, bringing the total to 14. The new additions to the Nationwide Mortgage Licensing System are Connecticut, Louisiana, Mississippi, North Carolina, New Hampshire, and Vermont. The system is designed to automate and streamline state licensing of mortgage lenders and brokers. The states already using the system are Idaho, Iowa, Kentucky, Massachusetts, Nebraska, New York, Rhode Island, and Washington. More than 5,000 companies and nearly 17,000 loan officers are being managed by the system, the organizations said. "This unprecedented adoption rate is the result of hard work begun several years ago by state regulators as we envisioned a new regulatory framework that would begin to address some of the gaps we experienced in state and federal oversight of the mortgage industry," said Gavin Gee, Idaho's director of finance and chairman of State Regulatory Registry LLC, the CSBS subsidiary that developed and operates the online registry. CSBS can be found online at http://www.csbs.org.

REX & Co., a San Francisco-based real estate investment company, has announced the introduction of its REX Agreement, a real estate equity financing arrangement, in Colorado. The REX Agreement is a real estate equity purchase agreement that gives the homeowner a portion of the home's equity in cash in exchange for granting the company a portion of the future increase or decrease in the home's value, the company said. It offers access to home equity without interest charges or monthly payments. To qualify, homeowners must have a history of financial responsibility, good credit, and at least 25% equity in their home. The REX Agreement is also available in California, Connecticut, Florida, Illinois, Massachusetts, Oregon, and Washington. The company can be found online at http://www.rexagreement.com.

Lendia LLC, a Marlborough, Mass.-based provider of outsourced systems for residential mortgage originators, has announced the acquisition of the company's assets by Virgin Money USA, Waltham, Mass. The terms of the deal were not disclosed. Lendia's chief executive officer, Greg O'Connor, will serve as executive vice president of Virgin Money and continue to run the day-to-day aspects of the Lendia business, the company said. "Joining the Virgin Money family will present us opportunities on many levels, including access to social lending products as well as the capacity and resources to enter new markets and expand our proprietary loan processing capabilities and lending capacity," Mr. O'Connor said. Lendia's business model is built around Comprehensive Outsource Solutions, a back-office system that can scale to meet the needs of any size mortgage originator, Lendia said. Virgin Money can be found online at http://www.virginmoneyus.com.

In his first speech as new president of the National Association of Mortgage Brokers, Marc Savitt declared that mortgage brokers are being unfairly blamed for the mortgage meltdown because the mainstream news media do not understand the issues. Speaking at the group's annual convention in Indianapolis, Mr. Savitt said the mainstream media have failed to talk about the positive things going on in the market. Housing affordability has returned, and people who were priced out of the market can now afford to purchase. Furthermore, interest rates remain low. But consumers "are not getting that message," which he said they need to hear from the mainstream media. Among the goals of Mr. Savitt's presidency will be to improve the image of mortgage brokers. He said he is willing to meet with critics of the industry and educate them about the role mortgage brokers play in the process.