Origination

Royal Bank of Scotland -- the parent of Greenwich Capital, for years a major player in subprime asset-backed securities -- early Tuesday morning said it would take almost $12 billion in mortgage-related writedowns and raise $24 billion in new capital. Great Britain's second-largest bank blamed its problems on the U.S. subprime mess and the spreading credit crunch that is now affecting many sectors of the financial services industry. Based in Connecticut, Greenwich has been a major securitizer of subprime mortgages. Its client list once included some of the largest subprime funders in the United States, including Ameriquest Mortgage of California. Sources say Greenwich has slashed its warehouse lending business to the bone and is even margin-calling investors in delinquent mortgages. One investment banker who visited Greenwich recently described the atmosphere in Connecticut as "a lot of traders sitting around gabbing" and "people going home early." Greenwich has not responded to telephone calls from National Mortgage News.

Grubb & Ellis Realty Advisors Inc., Chicago, has announced that it will make a first and final liquidating distribution of $6.08929094 per share in connection with the dissolution of the company. The distribution is being made to shareholders of record on April 17. No payments will be made on the company's outstanding warrants or to any initial stockholders regarding shares owned by them before the company's initial public offering. The company, which was established in 2005 to acquire office and industrial properties, said it will begin the process of delisting its securities from the American Stock Exchange. It can be found on the Web at http://www.grubb-ellis.com.

Freddie Mac has announced $10.5 million in grants to 12 nonprofit housing counseling organizations for outreach, education, and foreclosure prevention efforts. The groups were selected for their abilities to educate and advise borrowers (especially subprime borrowers) about foreclosure options or help them obtain workouts from mortgage servicers, the government-sponsored enterprise said. The largest share of the funds will be administered through the Hope Now Alliance in grants totaling more than $6 million, of which approximately two-thirds is allocated for Hope Now's counseling, operations, and outreach. Other organizations receiving grants of $500,000 or more from Freddie are: Center for Responsible Lending, $1 million; Neighborhood Assistance Corporation of America, $500,000; and Don't Borrow Trouble, $500,000. Freddie said the grants are the result of the November settlement between the Office of Federal Housing Enterprise Oversight and former Freddie Mac chief executive Leland Brendsel. The GSE can be found online at http://www.freddiemac.com.

The housing sector will continue to slow over the next six months, according to 90% of respondents to a National Association for Business Economists survey taken in late March and early April. However, the 109 economists are almost evenly split on the question of whether the slowdown will be "substantial" or "mild." Over 80% of the respondents expect economic growth to be below 1% for the first half of 2008. Compared with the results of the January survey, "employment conditions are beginning to weaken, with fewer firms hiring and more firms reducing payrolls," NABE said. The organization can be found on the Web at http://www.nabe.com.

Five tranches from Basic Asset Backed Securities Trust 2006-1 have been downgraded by Moody's Investors Service. The downgrades were as follows: class M-2, from Baa2 to B2 (and placed under review for further possible downgrade); class M-3, from Ba3 to B3 (and placed under review for further possible downgrade); class M-4, from B3 to Caa2; class M-5, from B3 to Caa2; and class M-6, from Ca to C. The rating agency said the downgrades were based, in general, on higher-than-expected rates of delinquency, foreclosure, and real estate owned in the underlying collateral relative to credit enhancement levels. The collateral consists primarily of first-lien subprime residential mortgage loans.

Nine tranches from Meritage Mortgage Loan Trust 2005-3, a subprime residential mortgage-backed securities deal, have been downgraded by Moody's Investors Service. One downgraded tranche remains on review for possible further downgrade. The ratings were downgraded, in general, based on higher-than-expected rates of delinquency, foreclosure, and real estate owned in the underlying collateral relative to credit enhancement levels, Moody's said. The collateral consists primarily of first-lien subprime residential mortgage loans. Moody's can be found online at http://www.moodys.com.

Thirty-seven classes of subprime mortgage pass-through certificates issued by Asset Back Funding Corp. have been downgraded by Fitch Ratings as a result of changes to the rating agency's subprime loss forecasting assumptions. Fitch also affirmed the ratings on classes with outstanding balances of $1.4 billion. The rating actions were attributed to changes in Fitch's subprime loss forecasting assumptions that "better capture the deteriorating performance of pools from 2006 and late 2005 with regard to continued poor loan performance and home price weakness." Fitch can be found online at http://www.fitchratings.com.

Standard & Poor's Ratings Services has placed on CreditWatch negative 331 classes from 79 U.S. cash flow and hybrid collateralized debt obligations of asset-backed securities. S&P attributed the negative rating actions to "stress in the U.S. residential mortgage market and credit deterioration of U.S. RMBS." The rating agency said 51 of the 79 affected CDO transactions are mezzanine structured finance CDOs of ABS collateralized substantially by mezzanine tranches of U.S. subprime RMBS. The remaining 28 are high-grade structured finance CDOs of ABS backed largely by senior tranches of subprime and other types of RMBS, as well as by senior tranches of CDOs of ABS, the rating agency said. The actions followed the April 15 placement on CreditWatch negative of 559 classes from 103 U.S. residential mortgage-backed securities supported by first-lien subprime mortgage collateral rated from January to June 2007. S&P can be found online at http://www.standardandpoors.com.

BioMed Realty Trust Inc., San Diego, has priced a public offering of 5.7 million shares of common stock at $25.50 per share. BioMed said it has granted the underwriters an option to buy up to 855,000 additional shares to cover any overallotments. The underwriters are: Raymond James & Associates, Morgan Stanley & Co., Wachovia Capital Markets LLC, KeyBanc Capital Markets Inc., Robert W. Baird & Co., Credit Suisse Securities (USA) LLC, RBC Capital Markets Corp., and Stifel, Nicolaus & Co.

American Campus Communities Inc., Austin, Texas, has priced a public offering of 8 million shares of common stock at $28.75 per share. The real estate investment trust, which focuses on developing, owning, and managing student housing, said the underwriters have been given an option to buy up to 1.2 million additional shares to cover any overallotments. Merrill Lynch & Co. and KeyBanc Capital Markets were the joint book-running managers of the offering. The REIT can be found online at http://www.studenthousing.com.