Originations

The New York Stock Exchange has permanently suspended trading in the common stock of CBRE Realty Finance Inc., Hartford, Conn., as of the close of market on Nov. 7. The delisting is the result of the fact that the company has fallen below the NYSE continued listing standard regarding average global market capitalization over a consecutive 30 trading day period of at least $25 million. As of Nov. 10, 2008, CBRE's common stock will trade over-the-counter under the ticker symbol CRTYZ. CBRE Realty Finance is a commercial real estate specialty finance company focused on originating, acquiring, investing in, financing and managing a diversified portfolio of commercial real estate-related loans and securities. The company's website is located at http://www.cbrerealtyfinance.com/.

At the direction of Congress, the Federal Housing Administration has increased the loan limit for reverse mortgages to $417,000 in the lower 48 states. The new loan limits for FHA-insured Home Equity Conversion Mortgages in Alaska and Hawaii have not been published yet. The national mortgage limit of $417,000 is "effectively immediately," FHA says in a mortgagee letter. Congress increased the loan limit for HECMs and imposed new limits on origination fees as part of an FHA modernization bill that the President signed July 30. "The new loan limit and other provisions will allow seniors to receive more benefit at lower origination cost to meet their retirement needs," said Peter Bell, president of the National Reverse Mortgage Lenders Association. Previously, the HECM loan limits were determined by area median house prices and ranged from $200,160 in rural areas to $362,790 in high cost areas. The new loan limit is likely to encourage senior to refinance their reverse mortgage so they can tap more equity in their homes.

The mortgage business may not like what's coming in the reform package the Bush Administration has in mind for the Real Estate Settlement and Procedures Act. But at least it will have 12 months to put the changes into effect, according to the Chief of Staff at the Department of Housing and Urban Development. RESPA reform is "imminent," David Horne told the National Association of Realtors' annual conference in Orlando. "But you'll have a one-year implementation period, so you'll have plenty of time to deal with it." Mortgage interests from top to bottom have generally panned HUD's effort at revising the ancient consumer protection law. But they have been unsuccessful in getting the White House to pull back HUD's reform package. Mr. Horne also told NAR that the transition to a new administration should be smooth, at least as far as his department is concerned. He said HUD started in June to carve out office space and computers for the transition team appointed by the President-elect, whomever he or she might be. It also has identified key career staffers and major issues for the new regime, and is just waiting for President-elect Barack Obama's team "to parachute in," Mr. Horne said.

The National Credit Union Administration has approved a new charter for Realtors FCU of Orlando, which will be an Internet-based credit union for an estimated 1.2 million members of the National Association of Realtors. Service will be provided by a 24/7 call center in addition to the Internet support, according to Michael Brodie, who will chair the start-up. "Realtors Federal Credit Union will be sensitive to the work habits and lifestyles of Realtors, most of whom are independent contractors who are compensated by commissions," said Brodie. Among its products, the new CU will offer first mortgages and HELOCs. -- <1>Credit Union Journal

American Mortgage Acceptance Corp., New York, a commercial and multifamily real estate investment trust, is closing its doors, saying its liabilities have exceed the value of its remaining assets. Among other things, the REIT invested in mezzanine, construction and first mortgage loans, subordinated interests in firsts, bridge loans, subordinate commercial mortgage-backed securities, and other real estate assets.

The Fannie Mae/Freddie Mac conforming loan limit will remain at $417,000 in 2009, unchanged from 2008, according to the Federal Housing Finance Agency. The FHFA monthly purchase-only index declined by 5.9% over the 12 months ending in August. The two GSEs can purchase conventional mortgages with a loan amount of up to $417,000 anywhere in the country. In higher cost markets, the loan limit is based on a percentage of the area median price calculated by the Department of Housing and Urban Development. Starting January that limit will be set at 115% of the local median price and capped at $625,500. Currently, the Fannie/Freddie loan limit in high cost areas is based on 125% of the local median price with a cap of $729,750. The cap expires at yearend but some industry trade groups are urging Congress to extend it.

The usually positive National Association of Realtors struck a decidedly downbeat chord at its annual convention in Orlando, predicting that housing prices would fall this year by the largest percentage since the Great Depression. Lawrence Yun, NAR's chief economist, said the average sales price of existing homes would slide 9.8% in 2008, "by far" the sharpest decline since the group began keeping records in 1968 and "probably" since the Depression. The record for the largest decline was set last year, when the average slipped a mere 1.4%. For 2009, NAR is expecting prices to go back up by 1.1%. But Mr. Yun told reporters that the slight increase is akin to "essentially no change." By 2010, though, the group is expecting price appreciation to return to the historical norm of 4-5% as the inventory of unsold houses returns to normal. "We have hit bottom, we believe, in terms of sales activity," he said. "But not prices. The only way to stabilize prices is to get inventory down, and we're not there yet."

Lend America, Melville, New York, on Monday plans to begin offering direct to qualifying consumers with subperforming mortgages in 44 states the lower-payment government-backed 'Home for Homeowners' refinance loans it previously made available only through alliances with institutional investors. The Federal Housing Administration lender and Ginnie Mae issuer will market the 'H4H' product to consumers through a series of 30-minute television infomercials that run under the name "The Mortgage Network." The company is continuing to offer the loans through its institutional investor program as well. Michael Ashley, chief business strategist of Lend America, said its mortgage specialists, who have received certified training in the relatively new government program, can educate borrowers, assess their affordability and refinance their loans in as little as 10 days, usually by phone.

Title insurance giant Fidelity National Financial has agreed to purchase one of its top competitors, LandAmerica Financial Group, for $126 million in stock. The sale announcement comes a day after LandAmerica said it would delay its third quarter earnings release. The purchase is subject not only to shareholder approvals but needs to be sanctioned by the antitrust division of the Justice Department. The two companies say they will save at least $400 million in expenses by reducing their combined debt loads by $250 million and cutting another $150 million in costs. Fidelity, a large player in servicing technology, is based in Jacksonville, Fla. LandAmerica is headquartered in Richmond, Va. Shareholders of LandAmerica, the nation's third largest title insurer, will receive 0.993 shares of Fidelity common stock for each share held.

Some loan brokers are now engaging in loan modifications to make ends meet, according to researcher David Olson of Wholesale Access. In an interview Mr. Olson said brokers are "linking up with title firms" to help consumers restructure their troubled loans. "Some brokers can make $2,000 on a loan," he said. Marc Savitt, the current president of the National Association of Mortgage Brokers, said he has heard anecdotal stories about brokers doing loan modifications and working with attorneys but could not offer any specific examples. "A lot of people are hurting and trying to make ends meet," said Mr. Savitt. The Columbia, Md.-based Wholesale Access is on the verge of launching a new study of the brokerage industry but Mr. Olson is none too optimistic about the immediate future of third-party loan salesmen. "Will it come back?" he asked. "One of the biggest problems is the lack of product variety."

Mortgage companies hired 2,900 full-time workers in September -- even though all U.S. business trimmed their employment roles by a surprising 284,000 workers, according to new government figures. The mortgage number, unfortunately, lags the national unemployment rate by a month. On Friday the U.S. Bureau of Labor Statistics said the unemployment rate spiked to a 14-year high of 6.5% in October as another 240,000 jobs were cut -- far worse than many economists expected. Unemployment is a key determiner of loan delinquencies. According to the government, 352,200 workers made their living off of mortgages (lending, servicing, brokerage) in September, compared to 349,300 in August. Employment in the mortgage industry has been relatively stable since January with most of the new jobs being added in servicing and loan modifications. Wachovia Corp. chief economist John Silva expects to see negative job and weak personal income reports until the spring of 2009, which will make it difficult for consumers struggling to make their mortgage payments. "Delinquencies and foreclosures will be rising for the next three to five months," Mr. Silva told MortgageWire. The housing market will go through a "tough winter," the economist said, but conditions should improve by spring with the help of government spending to revive the economy. "Most of the U.S. economy should have a decent housing recovery in 2009," he said.

The Bank of England's monetary policy committee said a sharp drop in residential investment, among several global and domestic market and economic pressures, led it to cut the bank rate by 1.5%. The rate cut "provides more room for lower borrowing costs," said Michael Coogan, director-general of the Council of Mortgage Lenders, London.

Freddie Mac released the results of its Primary Mortgage Market Survey in which the GSE concluded that a stalling jobs market and a pullback in consumer spending has caused rates to fall. The 30-year fixed-rate mortgage averaged 6.20% with an average 0.7 point for the week ending November 6, 2008, down from last week when it averaged 6.46%. Last year at this time, the 30-year FRM averaged 6.24%. Similarly, the 15-year FRM this week averaged 5.88% with an average 0.7 point, down from last week when it averaged 6.19%. A year ago at this time, the 15-year FRM averaged 5.90%. Lastly, five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 6.19% this week, with an average 0.6 point, down from last week when it averaged 6.36% and one-year Treasury-indexed ARMs averaged 5.25% this week with an average 0.4 point, down from last week when it averaged 5.38%.

The financial services division of Centex Corp., Dallas, lost $44 million for the quarter ending September 30, partly because of costs related to the shutdown of its traditional retail mortgage banking operation. Centex is the parent of CTX Mortgage, a top 30 ranked residential lender. During the quarter CTX completed a wind down of its business of originating loans on non-Centex properties. The shutdown alone cost it $26 million. The mortgage banker continues to fund loans on homes built by Centex. During the quarter the entire company lost $172 million compared to a $644 million loss in the same period last year.

Even though many major wholesale lenders have exited the channel or severely cut back their operations, there appears to be some life left in the correspondent market, according to an upcoming study. "Correspondent lending is not dead," said Jeff Lebowitz, the publisher of the annual MORTECH study. In an interview with MortgageWire Mr. Lebowitz said, "There are a number of small lenders that are acting as originators," and who turn around and sell their production servicing-released to larger funders. These lenders are mostly depositories, he added. The new MORTECH study will be out in December. Among its findings: two-thirds of mortgage bankers believe that despite the government takeover of Fannie Mae and Freddie Mac transacting business with the two GSEs will not be less costly. (See Monday's National Mortgage News for the full details.)

LandAmerica Financial Group Inc., Richmond, Va., has delayed the release of its third quarter 2008 results. The company was supposed to release them on Nov. 5, but in the early evening hours of that day the company issued a statement saying, "The release has been delayed to allow LandAmerica additional time to complete the preparation and review of its financial statements for the third quarter." As a result, the company cancelled its investor call scheduled for Nov. 6. LandAmerica said it plans to file its Form 10-Q with the Securities and Exchange Commission by its due date of Nov. 10 and would release third quarter results concurrently with that filing. The news displeased investors, who drove LandAmerica's stock well below its old 52-week low in morning trading on Nov. 6. The stock, which hit its most recent peak of $24.25 on Sept. 30, fell to $4.72 at 11:20 a.m., down $2.52.

There will be a trio from the Florida Association of Mortgage Brokers sitting in that state's legislature when the new term begins in 2009. Nancy Detert, who previously served in the House and ran a strong second in a Republican primary for a seat in Congress two years ago, has been elected to the state Senate by a margin of 58% to 42%, according to results provided by the state of Florida. Also, FAMB president D. Ritch Workman was elected to a seat in the state House in the 30th District by a margin of 54% to 46%, while Debbie Mayfield won the contest in the 80th District at 65% to 35%. Both are Republicans. Originally, five members of the group said they were seeking political office at FAMB's annual convention in Orlando in August. One, Rafael Perez, was defeated in a Republican primary for the 111th District seat in the state House of Representatives. A second, Terry Lynn Sanchez, another Republican, withdrew from the race for the 51st District seat in the House.

The Market Composite Index, an overall measure of mortgage applications, decreased 20.3% on a seasonally adjusted basis from 476.7 to 379.9 during the week ended Oct. 31, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey. The Purchase Index decreased from 303.1 to 260.9 on a seasonally adjusted basis, while the Refinance Index decreased from 1489.4 to 1075.4. Refinancings represented 42.9% of total applications, down from 46.9% the previous week, while adjustable-rate mortgages accounted for 2.5%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages increased 21 basis points from 6.26% to 6.47%, and points (including the origination fee) increased from 1.10 to 1.19 for loans with 80% loan-to-value ratios, the association reported. The MBA can be found online at http://www.mortgagebankers.org.

A Mortgage Bankers Association survey shows that 20.1% of single-family originations in the second quarter were guaranteed by the Federal Housing Administration, Department of Veterans Affairs and Rural Housing Service, up from 11.5% in the first quarter. "This survey confirms the increased popularity of FHA," said MBA senior economist Orawin Velz. She estimates FHA's market share hit 25% in the third quarter and it will go even higher in the fourth quarter. The MBA Mortgage Origination Survey also shows the conventional prime loans that Fannie Mae and Freddie Mac purchase are declining in terms of market share. Prime loans comprised 75.9% originations in the second quarter, down from 82.7% in the second quarter. In the second quarter, only 2.9% of originations were subprime loans and 1.1% were Alt-A loans.

Bucking the trend of losses being reported by its peers in the mortgage insurance industry, Radian Group Inc., Philadelphia, generated net income for the third quarter of $36.7 million ($0.46 per share). One year prior it lost $703.9 million ($8.82 per share). "Radian's third quarter results were impacted by a continuation of elevated mortgage insurance losses, which were offset by a reduction in our first-lien premium deficiency reserve," said S. A. Ibrahim, CEO of Radian. The company's profits came from the financial guaranty business. Its mortgage insurance business had a net loss for the quarter of $46.9 million, vs. net income of $74.4 million for the financial guaranty sector. Radian lowered its guidance on total claims paid for 2008 to $950 million. However, first-lien primary mortgage insurance defaults increased to 9.71% for the third quarter of 2008 vs. 5.87% in the third quarter of 2007. Total new mortgage insurance written was $7.5 billion, compared with $13.5 billion for the same period in 2007.