Origination

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.

Primary Residential Mortgage Inc., Salt Lake City, has announced a partnership with Mortgage Success Source to provide PRMI branches nationwide with training and marketing resources to help increase originations. Mortgage Success Source is the umbrella company of a recent partnership between Mortgage Market Guide, LoanToolbox, and The Duncan Group. PRMI said its branch partners will have free access to MSS products and services such as the Mortgage Market Guide, a real-time source of market data, commentary, and advice; LoanToolbox PlatinumPro, an automated marketing system that helps originators communicate more effectively; the full LoanToolbox Suite (which will be available free for six months); and training conference calls every six weeks with mortgage consultants. PRMI can be found online at http://www.branchpartner.com.

An attorney in Tucson, Ariz., is touting a recently patented financing method that he says can provide relief to homeowners on the brink of foreclosure without government assistance. Stephen M. Weeks, a founding partner of Weeks & Laird PLLC, says he developed the system, called Term Ownership, while representing homeowners harmed by predatory subprime loans. When refinancing under the system, the owner pays 30% of a home's fair market value (fully amortized over five years), while an investor or financial institution pays 70% plus closing costs. The owner continues to have the tax advantages of ownership and can obtain equity if the home's price rebounds, the law firm said. "For the financial institution, instead of facing an average $60,000 foreclosure loss, it turns an unprofitable situation into a profitable one and gains [Community Reinvestment Act] credit and public goodwill," the firm said.

The issuance of Ginnie Mae mortgage-backed securities rose to nearly $15 billion in March, the highest rate since November 2003, according to the agency. Theodore B. Foster, senior vice president for mortgage-backed securities at Ginnie Mae, said issuance has been increasing steadily since October. As the subprime mortgage and private-label MBS markets collapsed, "investors began moving toward the safety and stability of Ginnie Mae MBS," he said. Ginnie Mae's share of the MBS market declined to a low of 4% in 2005. Now, the private-label MBS market -- backed primarily by subprime loans -- represents just 7% of the total MBS market, compared with 57% two years ago, Ginnie Mae reported. "Currently, agency and government MBS are the primary sources of mortgage credit available for home financing," Mr. Foster said. "There is strong evidence that this trend will continue. Our issuers have indicated that as much as 30% or 40% of their business may be securitized through Ginnie Mae this year. We expect Ginnie Mae to issue between $175 and $200 billion in MBS in calendar year 2008." Ginnie Mae, a government-owned corporation within the Department of Housing and Urban Development, can be found online at http://www.ginniemae.gov.

The chief economist for the New York Stock Exchange says rising commodity prices coupled with the housing downturn's drag on the economy is fostering the possibility of "stagflation," a mixture of inflation and economic weakness last seen in the 1970s. Speaking at SourceMedia's second annual mortgage servicing conference in Dallas, former New York Federal Reserve economist Paul Bennett said he does not see "much sign of a bottom" in housing conditions, given the continuing declines in residential construction activity. He said home prices, already down about 10% to 15% nationally last year, may fall by a similar amount this year. Competition for oil and other scarce resources from rapidly growing economies such as China is driving up prices for many commodities, he said. That is adding to inflationary pressure despite the economic weakness in the United States. Still, he expects the Federal Reserve Board to continue reducing interest rates in the near term to help stabilize the U.S. housing sector and offset the risk that rate resets will drive up foreclosures.

Citigroup Inc. incurred $6 billion in pretax subprime mortgage writedowns/credit costs and took a net $5.1 billion loss in the first quarter. Other writedowns during the quarter included "a downward credit adjustment of $1.5 billion related to exposure to monoline insurers," the company said. Fitch downgraded Citi's long-term issuer default rating and Standard and Poor's put Citi's counterparty credit rating on CreditWatch Negative in response to its earnings results. Citi chief executive officer Vikram Pandit said the company is taking steps to offset its concerns, including realigning its mortgage business, planning the sale over time of huge volumes of on-balance-sheet mortgage assets, and launching multibillion-dollar capital raising efforts.

Twenty-one classes of mortgage pass-through certificates from various subprime Ameriquest Mortgage Securities Inc. transactions have been downgraded by Fitch Ratings. Fitch also placed six of the downgraded classes on Rating Watch Negative and affirmed the ratings on 74 other classes in 15 Ameriquest deals. The negative rating actions were based on a deteriorating relationship between credit enhancement and expected losses, the rating agency said. The collateral generally consists of fixed- and adjustable-rate subprime mortgage loans.

One hundred and eighty-four additional classes of subprime mortgage pass-through certificates were downgraded by Fitch Ratings on April 16 as a result of changes to its subprime loss forecasting assumptions. Fitch also placed three classes on Rating Watch Negative and affirmed the ratings on classes with outstanding balances of more than $9.2 billion. The pass-through securities affected by the latest downgrades were: 82 classes from nine issues by Park Place Securities Inc.; 75 classes from 11 issues by Ameriquest Mortgage Securities Inc.; 16 classes from two issues by Citigroup Mortgage Loan Trust; and 11 classes from two issues by Quest Trust. The rating actions were attributed to changes to 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.

Loans4Less.com Inc., an online mortgage brokerage based in Redondo Beach, Calif., has announced that its stock has begun trading over the counter on the Pink Sheets. The ticker symbol is LFLS. Loans4Less said it is exploring joint ventures, licensing, equity financing, and acquisition arrangements with third-party finance companies and major banks. The company can be found on the Web at http://www.loan4less.com.

One in 33 U.S. homeowners will likely be in foreclosure over the next two years as a result of subprime loans made in 2005 and 2006, according to a report released by The Pew Charitable Trusts. The numbers projected for Nevada and Arizona are much higher -- 1 in 11 and 1 in 18, respectively -- and another 40 million neighboring homeowners may see their property values and their municipalities' tax bases decline by up to $356 billion, says the report, "Defaulting on the Dream: States Respond to America's Foreclosure Crisis." Pew said states are generally in the forefront of developing policies aimed at preventing abusive lending. "Let's make certain federal laws build upon, rather than pre-empt, the strong and smart state efforts already under way and ensure that states retail flexibility to respond to local circumstances," said Shelley A. Hearne, managing director of Pew's Health and Human Services Program. Pew can be found online at http://www.pewtrusts.org.