Origination

Triad Guaranty Corp., Winston-Salem, N.C., has raised the possibility of going into run-off and ceasing the writing of new mortgage insurance policies. The disclosure came in the company's delayed 10-K filing, which had been on hold because Triad said it was in discussions with an unnamed potential investor. The filing says the company needs to "significantly augment our capital resources in the second quarter of 2008 in order to preserve our ability to continue to write new insurance." But it has not yet succeeded in finding an investor. Meanwhile, Fitch and Moody's have cut the company's ratings. Fitch reduced the insurer financial strength rating from AA-minus to BBB-minus, while Moody's cut its IFS rating from Aa3 to Baa3 and kept it on review for a further possible downgrade. The Fitch move caused Freddie Mac to require Triad to come up with a remediation plan. Under a new Freddie Mac policy, Triad was not automatically dropped from a Type I to a Type II insurer when the rating was cut. Freddie said Triad has 90 days to submit the plan for approval, after which Freddie will determine whether to drop Triad into the Type II category, which imposes additional capital requirements and operational restrictions. Fannie Mae said it is in touch with Triad's management and that the company remains an approved mortgage insurance provider.

Nearly 140 additional classes of subprime mortgage pass-through certificates were downgraded by Fitch Ratings on April 1 as a result of changes to its subprime loss forecasting assumptions. Fitch also placed 17 classes of subprime pass-throughs on Rating Watch Negative, removed nine from Rating Watch Negative, and affirmed the ratings on classes with outstanding balances of over $2.6 billion. The securities affected by the latest downgrades were: 47 classes from six issues of Citigroup Mortgage Loan Trust mortgage pass-throughs; 34 classes from four issues of MASTR Asset Backed Securities Trust pass-throughs; 31 classes from four issues of IXIS Real Estate Capital Trust pass-throughs; and 27 classes from six issues of Morgan Stanley pass-throughs. 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.

The National Consumers League has announced the launch of MortgageTown, a website aimed at helping prospective buyers understand the risks and benefits of homeownership. MortgageTown explains "nine essential steps" to financing a home, advising consumers on choosing the right loan, closing on a home, protecting themselves from fraud and predatory lenders, and preventing foreclosure. "MortgageTown is a user-friendly and reliable source where consumers can become better versed in the process of getting a mortgage and what pitfalls to avoid as they head down that road," said NCL executive director Sally Greenberg. The new website can be found online at http://www.mortgaetown.org.

DocuSign, a Web-based electronic signature service, has announced its selection by Wells Fargo Funding as an approved electronic signature vendor. The Seattle-based DocuSign said its service enables loan originators working with Wells Fargo to speed up the origination process by getting disclosure documents signed electronically. "With DocuSign's enterprise-class eSignature service, originators can now get required documents, such as truth-in-lending notifications and 1003 applications, signed by borrowers in a matter of minutes, rather than the days needed for paper-based signing," the company said. DocuSign can be found on the Web at http://www.docusign.com.

Paying everyday expenses is the No. 1 use of proceeds by seniors for their reverse mortgage loan, according to a survey by the Consumer Credit Counseling Service of Greater Atlanta. The agency said of the 213 homeowners with such loans who were surveyed, 15% said they used proceeds for home repairs and maintenance; 8% provided care for dependents or paid medical bills; 7% paid property tax and homeowner's insurance; and 3% took a vacation. In addition, 19% said their budget was too tight; 16% felt they needed more liquid assets on hand; and 6% said they were falling behind on monthly payments, the group reported. The average borrower was 74 years old, lived in the home for 18.5 years, and had a current home value of $221,997. While nearly 80% of those surveyed were retired, 5% were working full time, another 10.5% were working part time, and the rest were looking for jobs.

Wachovia, Wells Fargo, and Bank of America were the top commercial/multifamily originators in 2007, according to the Mortgage Bankers Association. Other top-10 originators in the MBA's 4th Annual Commercial/Multifamily Finance Firms Annual Originations Rankings were Deutsche Bank Commercial Real Estate; Credit Suisse; Holliday Fenoglio Fowler LP; Capmark Financial Group Inc.; CBRE|Melody; Goldman, Sachs & Co.; and KeyBank Real Estate Capital. Wachovia was the top originator for real estate investment trusts, investments funds, Fannie Mae, and conduits, while Wells Fargo topped the list for life insurance companies and other investors and Bank of America led for commercial banks/savings institutions, the MBA reported. In addition, Capmark Financial Group was the top originator for Freddie Mac, Federal Housing Authority/Ginnie Mae, and specialty finance companies; TIAA-CREF for pension funds; and GE Real Estate for credit companies.

The Laborers' International Union of North America has announced that it will kick off a "Pigs at the Trough" tour April 3 in Los Angeles outside the annual meeting of KB Home to highlight the role of corporate homebuilders in creating the subprime crisis. LIUNA said homebuilders are seeking as much as $33 billion in tax breaks through the Foreclosure Prevention Act. "Corporate homebuilders helped create the current housing and mortgage crisis -- contributing to the loss of 232,000 construction jobs in 2007 alone -- by pushing buyers to subprime and high-risk loans through their own mortgage subsidiaries," the construction workers' union said. ".... At KB Home, for example, subprime lending increased 405% between 2005 and 2006. In the tax breaks homebuilders are seeking through the Foreclosure Prevention Act, KB could gain as much as $683 million." The union can be found online at http://www.liuna.org.

For the first time since last February, the total amount of primary new insurance written by members of the Mortgage Insurance Companies of America fell below $20 billion. The total stood at $19.2 billion written in February 2008, with $19.1 billion coming through the traditional channel, the lowest amount written in that channel since April 2007. In February 2007, there was $12.6 billion of traditional insurance and $4.3 billion of bulk insurance written. The bulk channel is suffering because of the problems in the subprime marketplace, as just 223 certificates or policies were issued during the month. At the end of February, $839.6 billion of risk was in force, compared with $676.9 billion a year earlier. There was $23.0 million of new pool risk written. Application volume stood at 152,786, compared with 138,679 in January and 123,059 in February 2007. The cure/default ratio had a significant rebound in February, as 47,933 cures and 60,911 defaults were recorded, for a ratio of 78.7%. January's ratio was just 51.4%. MICA can be found online at http://www.micanews.com.

Zacks Equity Research, Chicago, announced April 1 that Liberty Property Trust, Malvern, Pa., had been designated its "Bear of the Day," a stock expected to underperform the markets over the next three to six months. Zacks said the commercial real estate investment trust is still rated a Sell "despite a low comparative valuation" and recent price declines. "We expect rental rates to remain flat through 2008, as the company has assets in office markets that have high vacancies," Zacks said. "Additionally, Liberty continues to run a deficit to cash flow -- that is, the dividend is not being covered with operating cash. We expect this to continue in 2008, as competition for tenants will become worse in a faltering economy." Zacks can be found online at http://www.zacks.com, and Liberty Property Trust can be found at http://www.libertyproperty.com.

Impac Mortgage Holdings Inc., a real estate investment trust based in Irvine, Calif., has announced the settlement of "a majority" of its outstanding repurchase claims. The mortgage REIT said it is continuing to negotiate its remaining warehouse borrowings and, as a result, will be required to add disclosures and make changes to its financial statements for Dec. 31, 2007. Therefore, Impac said, it was unable to file its Form 10-K for 2007 during the 15-day extension period, but intends to file the form "as soon as practical." The company can be found online at http://www.impaccompanies.com.