Origination

Washington Mutual, one of the nation's largest second-lien lenders, has terminated or suspended $6 billion in available home-equity lines of credit. According to a report in the San Francisco Business Times, the thrift will be sending out a notice to affected HELOC borrowers in the next few days. Seattle-based WaMu joins other lenders - including Countrywide Financial Corp., Bank of America and JPMorgan Chase - that have capped out certain HELOC borrowers or terminated unused lines. To date, most of the action has been in area codes suffering from large home price declines where borrowers have lost equity. As Mortgage Wire went to press today, a WaMu spokesman could not be reached for comment. In the fourth quarter, the thrift ranked third among second-lien lenders, according to the Alternative Products Quarterly Data Report.

In a recent item, MortgageWire overstated the mortgage impairment charges for HSBC North America Holdings. According to a spokeswoman for the company, its U.S. subprime division, HSBC Finance Corp., had impairment charges of approximately $2.2 billion in the first quarter, reflecting charges on subprime mortgages, unsecured consumer loans, and automobile notes. The company would not provide a specific impairment figure for subprime mortgages for the quarter. The entire company (HSBC NA) booked total loan impairment charges of $3.2 billion in the quarter, the figure that MortgageWire reported. This figure also includes credit-card-related charges, the spokeswoman said.

Three classes of LBUBS 2005-C7 commercial mortgage pass-through certificates have been downgraded by Fitch Ratings. The downgrades were as follows: class P, from B-plus to B; class Q, from B to B-minus; and class S, from B-minus to CCC. Fitch also affirmed the ratings on 22 classes in the transaction. The downgrades were attributed to projected losses on the three specially serviced loans, which are secured by: a 334-unit multifamily property in Detroit, an 83-unit multifamily property in Cleveland, and an office building in Reading, Pa.

Frederick L. Fellows has announced the establishment of Basalt Capital LLC, a Chicago-based investment management company specializing in commercial real estate debt securities. Basalt currently manages commercial mortgage-backed security investments for a related investment partnership and has launched a $500 million high-yield CMBS-oriented investment fund. Mr. Fellows said a "carefully selected, unlevered CMBS investment can yield better returns than many leveraged equity investments." Mr. Fellows is also the founder of Basalt's predecessor, Cargan Investment Management LLC, and previously worked at Southwest Securities and Nomura Securities International. The company can be found on the Web at http://www.basaltcapital.com.

Kalish & Associates PC, Newnan, Ga., a law firm that supports a variety of real estate and business transactions, has merged with Atlanta-based Morris|Hardwick|Schneider, one of the largest real estate closing law firms in the country. M|H|S managing partner Nat Hardwick said the merger meets a growing demand for the firm to expand its commercial real estate services. "Our merger with Kalish & Associates will increase our capacity to meet this burgeoning need, which is particularly strong south of Atlanta, where Kalish & Associates is based," Mr. Hardwick said. M|H|S can be found on the Web at http://www.closingsource.net.

Standard & Poor's has announced that Under Armour Inc. will replace mortgage lender Indymac Bancorp Inc. in the S&P MidCap 400 after the close of trading on May 15. S&P said Indymac ranked 400th in the index as of May 13, with a market capitalization of approximately $188 million. Indymac is the Pasadena, Calif.-based holding company for IndyMac Bank FSB. S&P can be found online at http://www.standardandpoors.com.

Hersha Hospitality Trust, a Philadelphia-based real estate investment trust, has priced a public offering of 6 million shares of common stock at $9.90 per share. The hotel REIT said the estimated net proceeds of $56.4 million are expected to be used to repay debt. UBS Investment Bank and Raymond James & Associates are the joint book-running managers of the offering. The company said it has granted the underwriters an option to buy up to 900,000 additional shares to cover any overallotments. Hersha can be found on the Web at http://www.hersha.com.

Simon Property Group Inc., Indianapolis, has announced that it will sell $1.5 billion of senior notes of its majority-owned partnership subsidiary, Simon Property Group LP, at a yield of 235 basis points above their U.S. Treasury benchmarks. The offering consists of $700 million of 5.3% notes due 2013 and $800 million of 6.125% notes due 2018. The joint book-running managers of the offering are Banc of America Securities LLC, Citi Markets & Banking, Deutsche Bank Securities, and Goldman, Sachs & Co. Simon can be found online at http://www.simon.com.

The Market Composite Index, an overall measure of mortgage applications, rose from 655.4 to 674.4 on a seasonally adjusted basis during the week ended May 9, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey. On an unadjusted basis, applications increased 2.9% on the week and were down 1.1% from the level recorded a year earlier. The Purchase Index fell from 381.3 to 378.5 on a seasonally adjusted basis, while the Refinance Index climbed from 2273.8 to 2422.1. Refinancings represented 48.7% of total applications, up from 47.1% the previous week, while adjustable-rate mortgages accounted for 8.3%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages fell from 5.91% to 5.82%, and points (including the origination fee) increased from 1.12 to 1.23 for loans with 80% loan-to-value ratios, the association reported. The MBA can be found online at http://www.mortgagebankers.org.

Bank of America, the nation's largest second-lien lender, says it expects losses on its home equity portfolio to be higher than previous estimates. At a recent investors' conference, Liam McGee, president of the bank's global and small-business division, said losses on its second-lien (home equity) portfolio would be higher than an earlier estimate of 2.0%-2.5%. He cited ailing housing markets in California and Florida as being among the worst. According to the Alternative Products Quarterly Data Report, BoA was the largest second-lien lender in the fourth quarter, with originations of $18 billion. (Second-lien rankings for the first quarter will be ready shortly.) Speaking at the investors' conference, Mr. McGee also reported that the bank's purchase of Countrywide Financial Corp. is on track and is expected to close in the third quarter.