Origination

Irwin Financial Corp., a bank holding company and mortgage lender based in Columbus, Ind., has reported a net loss of $22.2 million ($0.77 per share) for the first quarter, compared with a net loss of $10 million ($0.22 per share) in the first quarter of 2007. The loss includes a noncash mark-to-market of $8 million in the company's securities portfolio. "Through asset sales and a solution to our exposure to home equity credit losses, management and the board are refocusing the corporation on our core banking services to small-business customers," said Will Miller, chairman and chief executive officer of Irwin Financial. "Towards this end, we suspended originations in our home equity segment of loans for our own portfolio, including second mortgages. The home equity segment is now focused on government-insured and conforming, conventional first-mortgage loans that can be sold into the secondary markets." Mr. Miller said Irwin has engaged Stifel, Nicolaus & Co. and Milestone Advisors LLC to explore strategic options, including the sale of loans, a spinoff of assets, or a recapitalization. Irwin can be found online at http://www.irwinfinancial.com.

At the end of March, 36% of subprime mortgages being serviced by Countrywide Financial Corp. were in some stage of delinquency, according to a recent public filing by the company. Countrywide services roughly $100 billion in subprime mortgages, which means that nearly $36 billion worth of loans are at risk of going into foreclosure. According to the Quarterly Data Report, Countrywide is the nation's largest subprime servicer. The 90-day-plus late ratio on the portfolio is 21.04%. A year ago the 90-day rate was 7.82%. Countrywide is being sold to Bank of America, and the sale is expected to close by the end of the third quarter. The company, based in Calabasas, Calif., can be found on the Web at http://www.countrywide.com.

Bowing to congressional pressure, the Department of Housing and Urban Development has extended the comment period on its Real Estate Settlement Procedures Act reform proposal for 30 days. But HUD acting Secretary Roy Bernardi says he is determined to finalize the RESPA rule before the end of this year. "In light of congressional and industry requests to extend the comment period for the rule, and our desire to develop the best possible rule, we are allowing additional time," Mr. Bernardi said. "However, we remain committed to finalizing the rule before the end of the administration." Nearly 150 members of Congress have signed a petition seeking an extension. Industry groups began clamoring for an extension as soon as the proposal was issued because it goes beyond revising the good-faith estimate to provide consumers with a clear and concise disclosure of loan terms and settlement costs. The HUD proposal is more ambitious and opens the door to volume discounts and other issues that have raised concerns among many settlement service providers. The comment period was due to expire May 13.

Six classes of Mezz Cap commercial mortgage pass-through certificates have been downgraded by Fitch Ratings. The downgrades were as follows: series 2005-C3, class F, from BBB-minus to BB-plus, class G, from BB to B-plus, class H, from B to CCC/DR1, and class J, from B-minus to CCC/DR5; and series 2004-C1, class H, from B to B-minus/DR1, and class J, from B-minus to CCC/DR5. Fitch also affirmed the ratings on 14 classes in the two transactions. The downgrades were based on expected losses in specially serviced assets, the rating agency said. The mortgage loans collateralizing the deal consist of two notes: an A note, or senior component (which is not included in the trust's mortgage assets), and a B note, which consists of subordinate interests in the first-mortgage loans, according to Fitch.

Fitch Ratings has downgraded 12 classes of notes from three collateralized debt obligations backed partly by subprime residential mortgage-backed securities. The affected securities are: six classes issued by Coronado CDO Ltd.; three classes issued by Blue Heron Funding VI Ltd.; and three classes issued by Blue Heron Funding VII Ltd. Fitch attributed the downgrades to "significant collateral deterioration" in the portfolios' subprime RMBS and, in some cases, alternative-A RMBS and structured finance CDOs with underlying exposure to subprime RMBS.

The Issuer Default Rating of Sovran Self Storage, a real estate investment trust based in Buffalo, N.Y., has been placed on Rating Watch Negative by Fitch Ratings. Sovran's IDR, and that of its affiliate Sovran Acquisition LP, stand at BBB-minus, Fitch said. The rating agency attributed the rating watch placement to a decrease in liquidity and near-term debt maturities.

Washington Mutual has been tagged as the "Bear of the Day" for May 7 by Zacks Equity Research, Chicago. Zacks noted that WaMu had a first-quarter net loss of $1.40 per share, which it termed "abysmal." The loss, which significantly exceeded estimates by Zacks and many Wall Street analysts, "was driven by the elevated level of provisioning ($43.5 billion) during the quarter," Zacks said. Despite a rating outlook boost from negative to stable by Moody's investors Service, Zacks said it remains bearish on WaMu's stock because of a "significant reduction" in its dividends and its restructuring of certain major business operations. The research firm can be found online at http://www.zacks.com.

Municipal Mortgage & Equity LLC, Baltimore, has announced the closing of $175 million of capital commitments and participating debt to the South Africa Workforce Housing Fund of MuniMae's International Housing Solutions affiliate. The fund invests in rental and for-sale housing for low- and moderate-income families in South Africa. MuniMae said IHS expects the fund to total $240 million within several months. "We began IHS in order to bring our expertise in financing affordable housing projects to countries around the world," said Michael L. Falcone, MuniMae's chief executive officer. MuniMae can be found on the Web at http://www.munimae.com.

U.S. homeowners' perceptions about the value of their homes remained unrealistically bullish in the first quarter, as nearly three-quarters said they believed the value had increased or held steady over the previous year, according to a recent Zillow survey. Zillow.com, an online real estate community based in Seattle, said 72% of the homeowners surveyed expressed such a view despite the fact that 75% of U.S. homes had declined in value over the previous year. "While we assume there's a fair bit of owner denial reflected in these results, we also believe a large portion of the population simply isn't paying close attention to their housing market because they're not currently looking to sell or finance," said Stan Humphries, vice president of data and analytics at Zillow.com. "But even among those who say they're planning home-related activities this year, confidence appears strong despite continuing declines." The survey was conducted by Harris Interactive. Zillow can be found online at http://www.zillow.com.

The commercial/multifamily originations market grew 19% in 2007, with mortgage bankers closing $507.7 billion in commercial/multifamily loans, according to the Mortgage Bankers Association. Most property types and investor groups recorded increases, led by loans for office buildings and loans intended for commercial mortgage-backed securities, collateralized debt obligations, and other asset-backed security conduits, the MBA reported. Conduits, the largest single investor group, were responsible for $225.2 billion, or 44% of the closed loan volume. Office buildings were the dominant property type, representing $140.7 billion, or 28% of the lending total. Among major investor groups, Freddie Mac recorded the greatest percentage increase in volume in 2007, followed by Fannie Mae; CMBS, CDO, and other ABS conduits; real estate investment trusts; and life insurance companies.