Origination

Luminent Mortgage Capital Inc., Philadelphia, has announced a proposed restructuring under which it would convert from a real estate investment trust into a publicly traded partnership. Luminent said maintaining its REIT status is no longer beneficial to the company or its stockholders, and that freeing itself from the REIT income and asset tests will "significantly enhance its flexibility for investment diversification and cash management." After the restructuring, the company says it plans to offer fee-based services such as credit risk management, asset management advisory services, and sub-manager services for investment funds. Luminent can be found online at http://www.luminentcapital.com.

FirstPlus Financial Group, Irving, Texas, has announced a $1 million debenture agreement with its subsidiary Rutgers Investment Group to enable Rutgers to expand its mortgage banking operations "more aggressively." Under the agreement, FirstPlus issued to Rutgers 10 million shares of common stock secured by a $1 million subordinate debenture issued by Rutgers. "This infusion permits Rutgers to more aggressively pursue its plans for licensing and expansion as a mortgage banking firm in selected areas of the United States," FirstPlus said. The parent company can be found on the Web at http://www.firstplusgroup.com.

Younan Properties Inc., Los Angeles, has announced the formation of a commercial debt group and opportunity fund to acquire underperforming commercial loans backed by commercial real estate. The company said the new unit, the Younan Financial Group, will invest up to $200 million in underperforming loans and distressed office properties around the country in transactions ranging from $5 million to $50 million. The fund will purchase mispriced mezzanine loans, "B notes," whole loans, and nonperforming first mortgages backed by commercial real estate. "The current instability in the debt markets and the inability of lenders to hold an underperforming loan while the property is stabilized provides an excellent opportunity for our company to acquire debt at discounted prices for key assets in major markets," said Zaya S. Younan, chairman and chief executive of Younan Properties. The company can be found online at http://www.younanproperties.com.

National City Corp., Cleveland, says it is exploring "strategic alternatives," a corporate euphemism for putting the company up for sale. NatCity, which has hired Goldman Sachs as the adviser for the review, said it would make no further statements until its board has approved a specific course of action. Even though NatCity sold the First Franklin subprime originations and servicing platforms to Merrill Lynch at the end of 2006, the company has still suffered in the current credit crisis. According to its 10-K filing, NatCity had $1.0 billion in loans at the end of last year that were not eligible for sale to Fannie Mae or Freddie Mac. "Declining real estate prices and higher interest rates have caused higher delinquencies and losses on certain mortgage loans, particularly second lien mortgages and home equity lines of credit and especially those that have been sourced from brokers that are outside National City's banking footprint," the 10-K says. "These trends could continue. These conditions have resulted in losses, write downs and impairment charges in the mortgage business, especially in the fourth quarter of 2007." NatCity finished 2007 as the nation's 10th-largest servicer, with a portfolio of $187.5 billion, and the 12th-largest originator, with volume of $46.4 billion for the year, according to the Quarterly Data Report. The company can be found on the Web at http://www.nationalcity.com.

UBS AG -- once a major warehouse lender to the subprime industry -- says it will take a $19 billion writedown on its mortgage-related investments in the first quarter, including charges against its structured finance positions. The Swiss bank also announced that its chairman, Marcel Ospel, is stepping down. (On Tuesday morning, the German bank Deutsche Bank announced $4 billion in mortgage-related writedowns.) UBS also said it is forming a new unit "to hold certain currently illiquid U.S. real estate assets." The bank/investment bank said it expects to lose $12 billion in the first quarter. UBS estimated that it has $15 billion in financial exposure to subprime-related assets, compared with $28 billion at the end of December. The bank plans to raise $15 billion in new capital.

Seventy additional classes of subprime mortgage pass-through certificates were downgraded by Fitch Ratings on March 28 as a result of changes to its subprime loss forecasting assumptions. Fitch also placed four classes of subprime pass-throughs on Rating Watch Negative and affirmed the ratings on classes with outstanding balances of approximately $1.6 billion. The securities affected by the latest downgrades were: 30 classes from four issues of Centex Home Equity Loan Trust mortgage pass-throughs; 18 classes from two issues of CSFB Home Equity pass-throughs; 12 classes from one issue of SG Mortgage Securities Trust pass-throughs; nine classes from two issues of Countrywide pass-throughs; and one class from an issue of Aames Mortgage Investment Trust 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."

Delinquencies on mortgages supporting commercial mortgage-backed securities rose slightly to 0.33% in February, largely as a result of higher delinquencies on multifamily loans, according to a Fitch Ratings loan delinquency index. Office properties were the only major property type whose loans had lower delinquencies as of Feb. 29, the rating agency reported. Susan Merrick, a Fitch managing director, said $130 million in newly delinquent multifamily loans "were the major contributor to the slight rise in the delinquency index. Multifamily delinquencies continue to be overrepresented in the index, now comprising 60% of all delinquent loans, though they only represent 14.6% of the Fitch-rated universe." Fitch can be found online at http://www.fitchratings.com.

American Community Properties Trust, St. Charles, Md., has announced that a special committee of its board is exploring the possibility of restructuring the company so that it may elect to be treated as a real estate investment trust. The move was recommended by the family of J. Michael Wilson, the company's chairman and chief executive, in a filing with the Securities and Exchange Commission. The filing indicates that the Wilson family "believes that the company's two distinct lines of business (i.e., its multifamily and commercial rental properties and its community development and homebuilding business) may limit the company's growth potential, and may be deterring potential acquirers and investors," the company said. The Wilson family has proposed to separate the company's development assets from its rental properties and to revamp its capital structure to allow the rental properties to be held in a REIT. The company can be found online at http://www.acptrust.com.

ARE Asset Management, Miami, has launched two offshore investment funds registered in Tortola, British Virgin Islands, with the aim of making income-producing and opportunistic investments in the U.S. residential and commercial real estate credit markets. "Although turbulence due to the repricing of subprime adjustable-rate mortgages may continue, the U.S. real estate market has stabilized somewhat, producing some unique circumstances," said Jeffrey Kirsch, managing principal of ARE. "Given today's prevailing interest rate scenario, a U.S. real estate portfolio based upon accurate appraisals and aggressive loan servicing has the potential to yield above-average returns."

Wallick & Volk Mortgage Bankers, Cheyenne, Wyo., has announced the acquisition of the retail branch network of Citizens Mortgage Corp., Waco, Texas. The terms of the deal were not disclosed. The company said the acquired network consists of four Texas branches, in Dallas, Waco, College Station, and Victoria. Wallick & Volk can be found on the Web at http://www.wvmb.com.