Origination

Freddie Mac is telling its lenders that it will start purchasing "conforming jumbos" in May and that jumbo loans originated "retroactive to March 1" will be accepted for delivery. In issuing interim guidance on the new jumbo program, the secondary-market agency laid out the loan-to-value ratios on fixed- and adjustable-rate mortgages and the delivery fees. "For deliveries in the May/June timeframe, we expect to offer 90-day pricing and credit coverage for newly originated conforming jumbos using a guarantor execution," Freddie Mac said. Freddie will allow jumbo borrowers to take out $100,000 in a refinancing, but the GSE is charging a 1.0% fee, with a 50-basis-point fee on no-cash-out refinancings. Fannie Mae is limiting cash-out refinancings to $2,000. Freddie's standard delivery fee for a fixed-rated mortgage is 25 bps, and 75 bps for a jumbo ARM. But a jumbo ARM with an LTV ratio above 80% would have a 1.50% fee.

Fremont General Corp., Brea, Calif., says it is unable to file its 10-K form in time to meet the 15-day extension of its deadline to do so. The added delay is due to a continuing review of Fremont's consolidated financial statements by the company and its auditors, Squar, Milner, Peterson Miranda & Williamson LLP. Because it cannot determine when it will be able to file the 10-K, Fremont said it is postponing its combined 2007 and 2008 annual meeting scheduled for April 16. The cancellation puts Fremont out of compliance with New York Stock Exchange requirements for the 2007 annual meeting, which needed to be held by April 30. Fremont said it will hold the meeting as soon as possible and will communicate further with the NYSE.

Countrywide Financial Corp. funded $26 billion of mortgages in February, up 17% from the level recorded in January, but the company said foreclosures in its servicing portfolio continued to rise. The company's pipeline totaled $48 billion at the end of February, down from $51 billion in January. The company serviced $1.48 trillion of home loans as of Feb. 29. The delinquency rate on the servicing portfolio was 7.44% by dollar volume, down 3 basis points from the rate in January. However, foreclosures stood at 1.64% at the end of February, double the rate of a year earlier and up 16 bps from that of January. Countrywide also announced that it will no longer report monthly operational results and will report data quarterly, "consistent with industry practice." The company can be found online at http://www.countrywide.com.

The long-term Issuer Default Ratings of Countrywide Financial Corp., Calabasas, Calif., and its related subsidiaries have been downgraded from BBB-plus to BBB-minus by Fitch Ratings as a result of deteriorating home equity portfolios. Fitch said the move "in no way reflects doubts" about the prospects for completion of Countrywide's acquisition by Bank of America, and the ratings remain on Rating Watch Positive. Various other IDR, debt, and deposit ratings of Countrywide and its affiliates were also downgraded. "Although CFC had expected credit quality to continue to deteriorate, as observed in significantly higher provisions and chargeoffs taken, indications from rated banks in the past few weeks suggest that home equity delinquency rates are rising at a far more rapid pace than many had anticipated," the rating agency said. Fitch can be found online at http://www.fitchratings.com.

Although Florida remains a hotbed for mortgage fraudsters, the crime is becoming more evenly spread among all states as opposed to being concentrated in just a few, according to the latest report from the Mortgage Asset Research Institute. MARI's 10th period fraud case report also found that while the most common types of fraud continue to involve erroneous employment histories and false income statements, the failure to disclose debts, liens, or judgments is an up-and-coming problem. "The tertiary issue of undisclosed or incorrect debts, liens or judgments increased 50% between 2006 and 2007," the report said. Merle Sharick, MARI's vice president of sales, told the meeting that "perpetrators are devising new and improved ways to beat the system." He also said that fraud for housing by individuals who fudge on their loan applications "is a much bigger deal that we thought it was." The report, which was issued in Chicago at the Mortgage Bankers Association's National Fraud Issues Conference, is based on 2007 data. But it stressed that many instances of fraud in last year's book of business have yet to be unmasked. "It will likely take three to five years to uncover most of the fraud and misrepresentation" in the `07 book, the report said.

The FBI has set mid-June for another "national sweep" in its continuing effort to nab perpetrators of mortgage fraud. The new sweep, which involves law enforcement agencies at the federal, state, and local levels and has been dubbed "Operation Malicious Mortgage," is intended as "an important statement," according to John Arterberry, executive deputy chief in the Justice Department's Fraud Section. "We want to send the message that law enforcement takes mortgage fraud seriously," Mr. Arterberry said at the Mortgage Bankers Association's National Fraud issues Conference in Chicago. The planned sweep will be the FBI's third such effort. The first, in 2004, resulted in charges against 150 alleged criminals. The second was a year later and resulted in charges against 155 people. But this time, Mr. Arterberry said, the goal is to "double the number" of defendants. "We want to send a strong deterrent message," the Justice Department official told the conference. The MBA can be found online at http://www.mortgagebankers.org.

MHI Hospitality Corp., a real estate investment trust based in Williamsburg, Va., has announced that its common stock is now trading on the NASDAQ Stock Market. The stock, which trades under the symbol MDH, will no longer trade on the American Stock Exchange. The lodging REIT can be found online at http://www.mhihospitality.com.

Regency Centers Corp., Jacksonville, Fla., has closed a new $341.5 million credit facility consisting of a term loan of approximately $227.7 million and a revolving credit facility of approximately $113.8 million. The real estate investment trust said the facility includes an option to increase the amount to $400 million. The initial interest rate is 105 basis points over the London interbank offered rate on the term loan, and LIBOR plus 90 bps on the revolving portion. Wells Fargo Bank NA was the sole lead arranger and administrative agent of the facility. The REIT can be found on the Web at http://www.regencycenters.com.

1031 Exchange Options, a real estate investment consultancy based in Walnut Creek, Calif., has changed its name to Inverness Real Estate Investments. The company said the name change reflects its "increased focus on individual investors" seeking to buy institutional-grade real estate. "While much of our past business came from clients seeking investment properties to complete a 1031 exchange, we have seen over the past three years that our broad selection of real estate investment opportunities is drawing increased interest from direct investors," said Cary Losson, founder and president of Inverness. The company can be found online at http://www.invernessrei.com.

Commercial and multifamily mortgage debt outstanding rose to $3.3 trillion at the end of 2007, a 12% increase from the level recorded a year earlier, according to the Mortgage Bankers Association. The Washington-based trade group said that, based on an analysis of Federal Reserve data, commercial and multifamily mortgage debt outstanding increased by $84.6 billion in the fourth quarter alone. Multifamily debt outstanding stood at $831 billion at the end of 2007 after a record increase of $28.2 billion, or 3.5%, in the fourth quarter. "Fourth-quarter increases in the level of mortgage debt outstanding were driven by increases in the holdings of commercial banks and the government-sponsored enterprises Fannie Mae and Freddie Mac," said Jamie Woodwell, the MBA's senior director for commercial/multifamily research. "Both groups took advantage of capital market disruptions and the lack of [commercial mortgage-backed securities] competition to increase their holdings of commercial and multifamily mortgages." Commercial banks continue to hold the largest share of commercial/multifamily mortgages, with almost $1.4 trillion, or 42% of the total.