Origination

More than 11,000 loan officers have already registered with the five-month-old Nationwide Mortgage Licensing System. Add more than 8,700 principals, owners, and branch managers who also have joined the system, and the tally is nearly 20,000, according to figures released at the Conference of State Bank Supervisors' annual conference in Amelia Island Plantation, Fla. The CSBS operates the licensing system, which went live in January in eight states. Created in conjunction with the American Association of Residential Mortgage Regulators, the system is designed to bring greater accountability and transparency to the mortgage business. The system now contains more than 6,100 company, branch, and individual licensees, and nearly 11,200 more applications are pending. Some 330 licenses have been "terminated" since the NMLS went live Jan. 2, most likely because they were voluntarily surrendered but possibly because some were revoked. A total of 18 states are scheduled to participate in the NMLS by the end of the year, and 42 agencies in 40 states have signed letters of intent to join the system eventually.

The chief economist at Moody's Economy.com says the housing market has a long way to go before it turns the corner. "The housing downturn is now comparable to the Great Depression," Mark Zandi told the Conference of State Bank Supervisors' annual meeting at the Amelia Island Plantation in Florida. "And it is evident across the country." The "most fundamental problem" with housing is excess capacity, "and it's getting worse," Mr. Zandi said. Citing Census Bureau data, the economist said the number of "completely vacant" unsold houses now totals 2.25 million units. That's twice the number of houses that were sitting on the shelves in 2004, and the current situation "won't stabilize soon," he told the state regulators. The economist also said most places are now experiencing price declines. Not so long ago, he was predicting that prices would fall 20% or so from peak to trough. But he told the CSBS that the 20% figure "doesn't cut it anymore." Now, he's looking for a 20%-25% drop in prices by the time the free-fall is over, and perhaps 30% in some places in California, Florida, Nevada, and Arizona.

Classes K and L of COMM 2000-C1 commercial mortgage pass-through certificates, series 2000-C1, have been downgraded by Fitch Ratings. Class K was downgraded from B to B-minus, and class L was downgraded from CCC/DR1 to CC/DR4. In addition, Fitch affirmed 10 classes in the transaction. The downgrades are based on increased loss expectations on the four specially serviced assets in the pool, Fitch said.

The percentage of first-time buyers in California able to afford an entry-level home stood at 44% in the first quarter, compared with 26% for the same period a year ago, according to the California Association of Realtors. The minimum household income needed to purchase an entry-level home at $356,350 in California was $67,830 in the first quarter, based on an adjustable interest rate of 5.65% and assuming a 10% downpayment, according to CAR's First-time Buyer Housing Affordability Index. (First-time buyers typically purchase a home equal to 85% of the prevailing median price.) The monthly payment, including taxes and insurance, stood at $2,260. At 64%, Sacramento County and the High Desert region were the most affordable areas in the state, and Monterey was the least affordable, at 29%. CAR can be found on the Web at http://www.car.org.

Commercial real estate recorded a negative-1.0% rate of return in February on a national basis, as well as a 12-month rate of return of 5.5%, according to the S&P/GRA Commercial Real Estate Indices. "The sectors and regions of the market that performed the best for the month are ones that have been relative laggards over the past 12 months," said David Blitzer, managing director and chairman of S&P's Index Committee. "In the property sector, retail was the star performer during the February/January period, up 0.8%, while the region that performed the best was the mid-Atlantic South, up 1.1%." The indices showed an 8.6% 12-month rate of return for the warehouse sector, and a 9.4% rate for the Pacific Northwest, S&P reported. The worst one-month performance, negative-2.4%, was recorded in the Northeast, and the worst one-month performance by property type was negative-1.9% in the office sector, according to the company.

LandAmerica Financial Group Inc., a Richmond, Va.-based provider of real estate transaction services, has announced that it will merge its Residential Services and Lender Services units as of June 30. Melissa Hill will be president of the combined channel. "LandAmerica is leveraging the combined power of its Residential Services relationships and its local sales and service capabilities with the operational efficiencies of Lender Services," Ms. Hill said. LandAmerica can be found on the Web at http://www.landam.com.

Washington Real Estate Investment Trust, Rockville, Md., has priced a public offering of 2.6 million shares of its common shares of beneficial interest at $34.80 per share. The REIT said it will grant the underwriters an option to buy up to 390,000 additional shares to cover any overallotments. Raymond James & Associates Inc. and J.P. Morgan Securities Inc. are the joint book-running managers of the offering. The REIT can be found online at http://www.writ.com.

The National Association of Business Economists says it expects home sales to bottom out this year, but the professional forecasters also see a significant decline in house prices. The 52 NABE respondents said they expect the Office of Federal Housing Enterprise Oversight's house price index to drop 4.8% in 2008 and edge down by 0.3% on 2009. The OFHEO HPI rose 0.8% in 2007 and the home-purchase-only index fell 0.3%. Meanwhile, the forecasters were evenly divided on whether home sales will bottom out in the second, third, or fourth quarter. They also expect a slow recovery in housing, with housing starts rising from 990,000 in 2008 to 1.12 million in 2009. "While our panel anticipates an improvement in credit markets and a bottoming out in housing this year, the forecasters have marked down their estimates of growth for both 2008 and 2009," NABE president Ellen Hughes-Cromwick said. The economists expect gross domestic product to grow at a 2.1% annual rate in the second half of this year and 2.7% in 2009.

The Mortgage Bankers Association has issued a policy paper backing its position that legal/regulatory efforts in the wake of the recent market crisis should make distinctions between mortgage bankers and brokers in four areas. The MBA's position runs counter to the National Association of Mortgage Brokers' longtime assertion that there should be a "level playing field" where legal and regulatory efforts are concerned. David Kittle, the MBA's chairman-elect, indicated during a teleconference Tuesday morning that the association has taken brokers' concerns into account. "Many of our members are brokers," he said. "We just want transparency." The MBA wants brokers to disclose "responsibilities and compensation" and to be "treated legally as agents" if they "claim to be, or act as, borrower agents." The mortgage bankers group also wants a national minimum net worth requirement for brokers, and "appropriate" bonding. The MBA can be found online at http://www.mortgagebankers.org.

BankUnited Financial Corp., Coral Gables, Fla., a major player in the payment-option ARM market, is scaling back its production of these somewhat controversial loans. A spokeswoman confirmed that only the company's private banking customers will be eligible for payment-option adjustable-rate mortgages. Until recently BankUnited was originating option ARMs to all customers, regardless of their income levels. "We always underwrote the loan to the fully indexed rate," said the spokeswoman. "If they qualified at the fully indexed rate, we would make the loan." Option ARMs have stirred controversy because they offer borrowers four different payment options each month, including negative amortization. BankUnited holds $7.4 billion in option ARMs on its balance sheet. The loans account for 69% of its residential loan balances. Private banking customers have higher incomes than average clients.