Originations

Mortgage companies cut 6,000 full-time employees from their payrolls in August -- the biggest monthly drop since 15,000 industry workers lost their jobs in September 2007. The U.S. Bureau of Labor Statistics reported that employment in the mortgage banker/broker sector fell from 355,100 in July to 349,100 in August. Since January, the employment reports showed a gradual decline in mortgage jobs totaling less than 10,000 layoffs until the drop in August. Since the subprime meltdown spooked the financial markets in August 2007, the mortgage industry has shed 58,900 jobs. Friday's jobs reports indicates that 159,000 U.S. workers lost their jobs in September following the loss of 73,000 jobs in August. The unemployment rate held steady a 6.1%. (There is a one-month lag between the release in national employment data and the release of mortgage industry data.)

The Federal Deposit Insurance Corp. -- which five days ago thought it had sold the ailing Wachovia Corp. to Citigroup -- has a conundrum on its hands: back Citi's original bid (which had federal aid) or allow the Charlotte, N.C.-based banking giant to be bought by Wells Fargo, which isn't asking for any type of government assistance. As of MortgageWire's deadline, the situation -- to say the least -- was fluid. Citigroup was threatening legal action while demanding that its original purchase go through as planned. The FDIC issued a statement saying it stood behind the original purchase agreement (which it helped engineer) but also said it will review "all proposals" with an eye toward coming up with a resolution "that best serves" the public interest." (The Citi deal values Wachovia at $1 a share, while the Wells bid amounts to about $7.) The trouble started Friday morning when Wells Fargo unexpectedly announced that it was buying Wachovia with no federal assistance whatsoever. The deal, if it goes through, will help Wells battle Bank of America for control of the residential lending and servicing sectors. With Wachovia under its belt, Wells would control 17.65% of the $9.6 trillion housing receivables market, compared with Bank of America's 21.06%. In lending, Wells/Wachovia would have an origination share of 17.73% vs. BoA's 19.99%. (The market share figures are based on June 30 data and take into account BoA's July 1 purchase of Countrywide Home Loans.) Even though the FDIC put no money into the original Citi-Wachovia purchase deal, it was on the hook for potential losses on Wachovia's payment-option ARM portfolio. Wells is buying Wachovia outright in a stock deal valued at $15 billion.

Three classes of CBRE Realty Finance CDO 2007-1 Ltd./LLC have been downgraded by Fitch Ratings. The downgrades were as follows: class J, from BB-plus to B-plus; class K, from BB to B; and class L, from BB-minus to B-minus. Fitch also affirmed the ratings on 11 other classes in the collateralized debt obligation. The rating agency attributed the downgrades to expected losses, a breach of the transaction's poolwide expected-loss covenant, and "failure of Fitch's property value decline stress scenarios." The deal is a revolving commercial real estate CDO.

The Issuer Default Ratings of Emigrant Bancorp Inc. and its subsidiaries have been downgraded by Fitch Ratings, which cited concerns about Emigrant's capital position and expected losses. The long-term IDR of the parent company was downgraded from BBB to BB-plus, and its short-term IDR was downgraded from F2 to B. The comparable downgrades to its subsidiaries were from BBB to BBB-minus and from F2 to F3, respectively. "While Fitch expects capital to meet the definition of 'well capitalized', both tangible and regulatory capital ratios remain under considerable pressure due to expected recognition of losses in its investment portfolio," the rating agency said. Fitch can be found online at http://www.fitchratings.com.

UDR Inc., a real estate investment trust based in Denver, has priced a public offering of 8 million shares of common stock at $24.25 per share. The net proceeds of approximately $184.9 million are expected to be used to repay $116.1 million outstanding under its revolving credit facility and for general corporate purposes, the company said. The underwriters have been given an option to buy up to 1.2 million additional shares to cover any overallotments. Merrill Lynch & Co., Citi, and Morgan Stanley are the joint book-running managers of the offering. UDR, a multifamily REIT, can be found online at http://www.udr.com.

LandAmerica Financial Group Inc., Richmond, Va., has announced that United Title Co. is now doing business as LandAmerica Title Co. LandAmerica Financial said the move is "another step in LandAmerica's transformation of its collection of independent businesses into an integrated and unified operating company." The parent company can be found on the Web at http://www.landam.com.

Hall Financial Group, Frisco, Texas, has announced the formation of Hall Real Estate Capital LLC to consult on, sponsor, and offer real-estate-related investment opportunities to individual and institutional investors. The new company is expected to offer private placements involving individual real estate projects as well as raise capital for opportunistic RE-related activities. The founders of HREC are Craig Hall, chairman of Hall Financial; Herb Weitzman, chairman of The Weitzman Group/Cencor Realty Services; and Donna Arp, former chief executive officer of Realty Capital Partners, who will serve as CEO of the new company. "The current turmoil in the financial markets is creating tremendous opportunity at all different levels in the capital markets, and we believe that now is the right time for investors to look to real estate as an opportunistic area with the potential to deliver superior returns on a risk/reward basis," Mr. Hall said.

Ellie Mae Inc., a Pleasanton, Calif.-based origination vendor, has acquired the assets of Online Documents Inc., a provider of guaranteed compliant mortgage documents, from Stewart Lender Services Inc. No sale price was disclosed. Online Documents, based in Concord, Calif., provides services to more than 500 clients nationwide, ranging from local and regional lenders to large organizations. The acquisition agreement between Stewart Lender Services and Ellie Mae includes Online Documents' employees, client relationships, technology, business operations, and other assets. Ellie Mae said it will continue to serve current customers of Online Documents, and in the coming months will add Online Documents as an additional provider on Encompass Closer, its document preparation solution integrated within the Encompass Mortgage Management Solution. In addition, mortgage professionals will continue to see Online Documents among the many document service providers offered on the Ellie Mae ePASS Network. Ellie Mae can be found on the Web at http://www.elliemae.com.

The risk of home price declines in the nation's 50 largest housing markets has been "significantly heightened" by rising foreclosures and unemployment, according to PMI Mortgage Insurance Co., Walnut Creek, Calif. According to the PMI U.S. Market Risk Index for Fall 2008, the risk of price declines rose by more than 10% in 16 of the nation's top 50 metropolitan statistical areas, primarily in areas that experienced major house price increases during the housing boom. "The risk of future home price declines increased in 94% of all 381 MSAa in the country this quarter," said David W. Berson, chief economist and strategist for The PMI Group. "The majority of these increases aren't statistically significant -- in many cases, risk increased by less than 10% -- but risk did increase by a significant amount, as much as 30% or more, in some states and MSAs where foreclosures and unemployment increased significantly." PMI can be found online at http://www.pmigroup.com.

A national ban on seller-funded downpayment assistance programs linked to third-party reimbursements has gone into effect. The ban, which took effect Oct. 1 with the beginning of the new fiscal year of the federal government, had been fought by several nonprofit groups that provided assistance to consumers. Opponents of the ban estimate that 50,000 homeowners a month could be knocked out of the housing market because of the ban.

Thornburg Mortgage Inc., Santa Fe, N.M., says it has cut 29 sales and support positions in its home lending division "in response to the continued unprecedented turmoil in the mortgage financing and credit markets." About half the cuts were made in Santa Fe and the other half were made "throughout the country," the lender said. The company said it continues to employ 156 professionals in Santa Fe. "Today's announcement is in no way a reflection of the ability of these individuals; rather, it is a sign of just how prolonged and extensive the mortgage crisis has become," said Larry Goldstone, Thornburg Mortgage's president and chief executive officer. The company can be found on the Web at http://www.thornburgmortgage.com.

The Hope for Homeowners program will allows lenders to conduct "trials" to see if troubled borrowers can make their payments under a newly refinanced Federal Housing Administration mortgage. Congress directed the Department of Housing and Urban Development to establish the special FHA refinancing program, and the department is issuing lender and servicer guidance on Oct. 1. "I strongly encourage homeowners and lenders to look into this program," HUD Secretary Steve Preston said. At the request of lenders, the Hope program provides for a "minimum three consecutive month trial modification" for borrowers with higher-than-normal debt-to-income ratios. The origination guidance also allows second lienholders to share in future appreciation of the property, if they waive all rights to collect existing debt.

The PMI Group Inc., Walnut Creek, Calif., has announced that its primary mortgage insurance company, PMI Mortgage Insurance Co., will terminate all excess-of-loss reinsurance arrangements with lender-affiliated captive reinsurers as of Jan. 1, 2009. On that date, in-force XOL contracts will be placed into runoff and will mature pursuant to their existing terms and conditions. PMI said PMI Mortgage Insurance will continue to participate in quota share captive reinsurance agreements. The company can be found on the Web at http://www.pmigroup.com.

Genworth Financial Inc., Richmond, Va., has announced that it is examining strategic options regarding its U.S. mortgage insurance business, including a possible spinoff. The company also declared that its financial foundation is sound and its liquidity more than adequate. "We have demonstrated that, in the current stressed U.S. housing environment, our U.S. mortgage insurance business continues to operate from a more sound financial position and lower risk profile than any other U.S. mortgage insurer," said Michael D. Fraizer, chairman and chief executive officer. "At the same time, progress in our international, wealth management, retirement, life, and long-term care insurance businesses has been overshadowed by concerns about the future of U.S. mortgage insurance." Mr. Fraizer said Genworth's U.S. MI business is the only double-A rated mortgage insurer in the nation. Genworth can be found online at http://www.genworth.com.

House prices fell another 0.9% in July and prices are down 16.3% over the past 12 months, according to the Standard & Poor's/Case-Shiller housing price index. Despite the downward trend, the 20-city HPI shows an uptick in monthly house prices in nine cities. "While some cities did show some marginal improvement over last month's data, there is still very little evidence of any particular region experiencing an absolute turnaround," S&P's David Blitzer said. Prices have risen in Atlanta, Boston, Dallas, Denver, and Minneapolis for three months or more. The Office of Federal Housing Enterprise Oversight reported Sept. 23 that home prices fell 0.6% from June to July on a seasonally adjusted basis. The S&P/Case-Shiller index can be found online at http://www.homeprice.standardandpoors.com.

Urstadt Biddle Properties Inc. has announced that the date of its inclusion in the S&P SmallCap 600 Index has been extended to the close of trading on Sept. 29. The previously announced date was Sept. 26. Urstadt is a real estate investment trust based in Greenwich, Conn.

Washington Real Estate Investment Trust, Rockville, Md., has announced the pricing of a public offering of 1.5 million shares of its common stock at $35 per share. The REIT said it will grant the underwriters an option to buy up to 225,000 additional shares to cover any overallotments. J.P. Morgan Securities Inc., Credit Suisse Securities (USA) LLC, Wachovia Capital Markets LLC, and Raymond James & Associates are the joint book-running managers of the offering. The REIT can be found online at http://www.writ.com.

National Retail Properties Inc., a real estate investment trust based in Orlando, Fla., has priced a public offering of 3.0 million shares of common stock at $23.05 per share. The underwriters were granted an option to buy up to 450,000 additional shares to cover any overallotments. Citigroup Global Markets Inc. and Banc of America Securities LLC are the joint book-running managers for the offering. National Retail Properties, which focuses primarily on properties subject to long-term net leases, can be found online at http://www.nnnreit.com.

The National Association of Realtors has announced the launch of a Federal Housing Administration Toolkit aimed at enabling Realtors to help buyers obtain safe and affordable FHA-backed mortgages. The toolkit includes a video on frequently asked questions and a flash-media presentation of FHA programs, as well as brochures, other reference guides, and links to useful resources. "FHA offers a safe alternative to many of the subprime and exotic loans that caused much of today's market turmoil, and the program is easier to use than ever before," said Pat V. Combs, immediate past president of the NAR. The association can be found on the Web at http://www.realtor.org.

The long-term Issuer Default Ratings of BankUnited Financial Corp., a mortgage lender based in Coral Gables, Fla., and its subsidiaries have been downgraded by Fitch Ratings. Fitch downgraded the parent company's IDR from BB-minus to CCC and the IDR of BankUnited FSB from BB to CCC. The rating agency noted that BankUnited recently agreed to a cease-and-desist order with the Office of Thrift Supervision, an action that "significantly weakens the liquidity profile of the holding company as the regulators restrict payments from the bank to the holding company," Fitch said. The C&D order requires, among other things, that the bank's Tier One capital ratio be maintained above 7% and that its loan loss reserve be increased. The order says BankUnited "has engaged in unsafe and unsound practices leading to a significant rise in delinquencies and defaults in its payment-option [adjustable-rate mortgage] portfolio," Fitch said.