Originations

WCI Communities, a developer and builder of luxury homes based in Bonita Springs, Fla., has announced a Chapter 11 bankruptcy filing for itself and over 100 subsidiaries, but excluding WCI Mortgage and certain other WCI ventures. WCI said WCI Mortgage, an affiliate of Wells Fargo Home Mortgage, will continue to honor all its obligations. The company also announced the departure of Jerry L. Starkey as chief executive officer and his replacement by David L. Fry as interim president and CEO. Carl C. Icahn, chairman of WCI's board, said the bankruptcy filing was necessary "because of the recent failed effort to obtain financing and the recognition that the company's entire $1.8 billion of debt may soon be in default." The filing involved approximately 130 of WCI's wholly owned subsidiaries, but excluded WCI Mortgage, Prudential Florida WCI Realty, and "certain other joint ventures in which WCI is a partner," the company reported. WCI said the departure of Mr. Starkey was mutually agreed upon, and that he will be available to the company for consultation. WCI can be found online at http://www.wcicommunities.com.

IndyMac Bancorp Inc., Pasadena, Calif., has filed for bankruptcy under Chapter 7 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Central District of California. The company made the announcement in a Securities and Exchange Commission filing. John Bovenzi, chief executive of IndyMac Federal Bank FSB, the conservatorship created when the Federal Deposit Insurance Corp. seized the thrift, put out a statement saying, "The announcement by the former holding company of IndyMac Bank has no impact on IndyMac Federal Bank or its customers. Our customers will continue to receive the same value and personal service they have come to expect from IndyMac, which, due to its FDIC backing is one of the safest banks in America and a great place for our customers to keep their funds." Fitch Ratings downgraded IndyMac Bancorp's Issuer Default Rating to D and said it would withdraw its ratings of the company in 30 days. IndyMac can be found online at http://www.indymacbank.com.

Twenty-five classes from two Hometown Commercial Capital Trust commercial small-balance transactions have been downgraded and removed from Rating Watch Negative by Fitch Ratings. Fitch also assigned Distressed Recovery ratings to the 25 classes and affirmed the ratings on two classes from the two commercial mortgage-backed securities deals, Hometown Commercial Capital Trust 2006-1 and 2007-1. The downgrades were attributed to expected losses on loans in special servicing and "a large concentration of loans that Fitch has identified as loans of concern."

The California commercial loan delinquency ratio tripled in the second quarter, but the rate remained at a near-record low of 0.06%, according to the California Mortgage Bankers Association. The Quarterly Commercial Loan Delinquency Survey found that only seven loans were more than 30 days delinquent, representing $53.9 million of a $96.1 billion servicing portfolio. This represents a delinquency ratio of 0.06%, compared with 0.03% a year ago. Fifteen of the 17 commercial mortgage banking firms reported no loans more than 30 days delinquent. For survey purposes, a loan is considered delinquent if it is two or more payments past due, although loans in foreclosure are included regardless of the number of payments past due. The CMBA, based in Sacramento, can be found online at http://www.cmba.com.

The rating outlook for UCBH Holdings Inc. and its bank subsidiary has been revised from Stable to Negative by Fitch Ratings, largely as a result of problem assets in its construction loan portfolio. Fitch also affirmed the long-term Issuer Default Ratings of UCBH and United Commercial Bank at BBB and the short-term IDRs of the pair at F2. "Given the company's significant exposure to construction loans and its concentration in California, Fitch anticipates that it is unlikely that credit quality will return to more normalized levels in the near term," the rating agency said. Fitch can be found online at http://www.fitchratings.com.

SCI Capital Group, Los Angeles, has announced the closing of a mezzanine fund focused on the development and acquisition of real estate. The fund, SCICG Mezzanine Fund I LLC, received capital commitments exceeding its initial $10 million offering. The company said the fund will provide short-term secured loans to SCI affiliates for real estate development and the acquisition of developed real estate. SCI Capital can be found on the Web at http://www.scicapitalgroup.com.

Origen Financial Inc., a real estate investment trust that had been a major lender and servicer in the manufactured housing sector, has reported a net loss of $4.8 million ($0.19 per share) for the second quarter, compared with net income of $2.8 million ($0.11 per share) a year earlier. The company said that on July 31 it completed the sale of "certain assets of our origination and insurance business" to an affiliate of ManageAmerica, a provider of services to the manufactured housing industry. This followed the July 1 sale by Origen of its servicing operations and platform to Green Tree Servicing LLC. The company took in proceeds of $36.7 million from that transaction. Origen said its business model is now focused on managing residual interests in securitized manufactured housing loan portfolios. Origen can be found online at http://www.origenfinancial.com.

Minority borrowers, regardless of income level, are more likely to receive high-cost home mortgage loans than other consumers, according to a new report by the National Community Reinvestment Coalition. The report says minorities pay more for mortgages even as their incomes levels rise, and that loan price disparities (with white counterparts) were more common for middle- to upper-income African-American and Hispanic borrowers than for low- and moderate-income minority borrowers. For example, middle- and upper-income African-Americans were at least twice as likely to receive high-cost loans in 2006 as whites with similar income in 155 (71.4%) of the metropolitan areas analyzed, the NCRC said. In comparison, low- and moderate-income black borrowers were at least twice as likely to receive high-cost loans as whites with similar income in 87 (47.3%) of the metro areas, according to the report. "The data reminds us that the current housing crisis was overwhelmingly the result of the explosion of bad loan products in financially vulnerable communities," said John Taylor, president and chief executive of the NCRC. "It is not surprising that foreclosures have been concentrated among African-Americans and Latinos, because predatory and problematic loans are more prevalent in those communities." The organization can be found online at http://www.ncrc.org.

Silver Gardens, an affordable housing developer based in Albuquerque, N.M., has partnered with nonprofit Enterprise Community Partners to participate in a "green housing" initiative to help low-income families benefit from carbon-offset-based homebuilding. Silver Gardens is the first in the nation to receive grant funding from ECP's new Enterprise Green Communities Offset Fund. "Enterprise's goal for the fund is to create a new resource for green affordable housing and demonstrate how the carbon markets can and must deliver benefits to low-income people," said Dana Bourland, senior director of the green communities initiative at ECP. The grant will be used to provide 119 rental units for families earning between $12,000 and $31,000 annually. Up to 90% of the apartments will rent for $278 to $739 a month. ECP said the green four-story building emits less carbon dioxide and requires 15%-20% less energy than projects using conventional green technology. Project co-developers include the Supportive Housing Coalition of New Mexico Inc. and Romero Rose LLC, the Albuquerque affiliate of Jonathan Rose Cos., an affordable housing developer.

The First American Corp., Santa Ana, Calif., is delaying the split of its financial services and information solutions businesses. The company had announced plans to spin off the financial services business into a new company that would have taken the First American name back in January. Parker S. Kennedy, chairman and chief executive of First American, said the company remains committed to doing the split. "We still firmly believe that splitting our businesses will unlock the unrealized value of the information solutions businesses and strengthen the competitive position of both companies," he said. "However, given the uncertainty in the real estate and mortgage credit markets, we believe it is prudent to delay the split. Our primary focus at this time is expense management, product development, and maximizing profitability." The announcement came in First American's second-quarter earnings release. The company reported net income of $42.0 million ($0.45 per share), compared with a net loss of $66.0 million ($0.68 per share) for the same period last year. However, current results could be revised downward by a possible impairment of $37.3 million related to an investment in a title agent by First American Title Insurance Co.

Ambac Financial Group has agreed to pay a counterparty $850 million to cover losses on mortgage-related collateralized debt obligations. The New York-based bond insurer would not identify the counterparty or provide details about the transaction. The CDO was collateralized by subprime and other types of residential mortgages. "The loans weren't all necessarily subprime," an Ambac spokeswoman told MortgageWire. Ambac was originally on the hook for $1.4 billion in losses on the investment, which has been described as a "CDO-squared." In March Ambac had booked $1 billion in mark-to-market losses on the deal and can now recapture $150 million. "It's a good deal for us," said the spokeswoman. Ambac is slated to release earnings on Aug. 6. The bond insurer and its competitors are potentially on the hook for billions of dollars in losses on subprime-related bonds that they insured. The transaction that Ambac settled, known as "AA Bespoke," was one of its "largest CDO exposures," the company said. Ambac can be found on the Web at http://www.ambac.com.

Class M of Merrill Lynch Floating Trust commercial mortgage pass-through certificates series 2006-1 has been downgraded from BBB-minus to BB by Fitch Ratings and removed from Rating Watch Negative. Fitch also affirmed the ratings on 17 other classes in the transaction. The downgrade was attributed to low leasing activity and the forthcoming maturity of the pool's third-largest loan, The Portals III, which is secured by an office building in Washington.

Two classes of J.P. Morgan Commercial Mortgage Finance Corp. mortgage pass-through certificates series 1999-C8 have been downgraded by Fitch Ratings. Class H was downgraded from BB to B, and class J was downgraded from CC/DR4 to C/DR5. Fitch also affirmed the ratings on eight other classes in the deal. The downgrades were due to an increase in specially serviced loans and expected losses, the rating agency said. Fitch can be found on the Web at http://www.fitchratings.com.

Standard & Poor's has announced that Cedar Shopping Centers Inc., a real estate investment trust based in Port Washington, N.Y., will replace Angelica Corp. in S&P's SmallCap 600 Index. S&P said the move, scheduled to occur after the close of trading on Aug. 4, was prompted by the pending acquisition of Angelica by an affiliate of Lehman Brothers Holdings.

MountainView Capital Holdings LLC, Denver, has announced the initial closing of the MountainView Mortgage Opportunities Fund LP, which is slated to invest primarily in alternative-A and subprime first-lien residential mortgage loans in the secondary market. The company said the fund had raised approximately $80 million, primarily from qualified institutional investors, as of the initial closing. The loans acquired by the fund will be serviced "with a view toward mitigating risk of default and maximizing the value of the loans," MountainView Capital said.

GMAC Financial Services, New York, has posted a second-quarter net loss of $2.5 billion, of which $1.9 billion is attributable to losses at Residential Capital LLC. For the same period last year, GMAC Financial had net income of $293 million, although ResCap reported a $254 million net loss. The losses at ResCap are due to asset sales and a higher loan loss provision related to the deterioration of certain European markets, the company said. Offsetting some of the loss was a $647 million gain from a tender offer and the retirement of debt. Prime conforming loan production totaled $12.2 billion for the quarter, down slightly from $12.7 billion a year earlier, but government loan production increased from $800 million to $3.8 billion during the same period. Because of illiquidity in the global capital markets and weakened consumer credit in key markets, ResCap has suspended all its loan production outside the United States, with the exception of Canadian insured loans.

Home prices declined 10.8% nationally over the past 12 months, a rate that has remained in the 10%-11% range in the past four months, according to the latest LoanPerformance Home Price Index. "We are cautiously optimistic that stabilization in the decline rate is the first indicator that house price declines may not be getting any worse nationally," said Mark Fleming, chief economist of First American CoreLogic, the Santa Ana, Calif.-based company that compiles the index. He said 36 states are experiencing price declines, and that homes in California, Nevada, Arizona, and Florida are depreciating at an annualized rate of 18% or more. Riverside-San Bernardino-Ontario (Calif.) headed the index's list of top metropolitan areas with 12-month home price declines with a 25.3% decrease. Los Angeles-Long Beach-Glendale ranked second with a 25.2% decline, and Oakland-Fremont-Hayward (Calif.) finished third at 23.9%. The LoanPerformance HPI provides a comprehensive set of monthly home price indices and median sales prices covering 7,544 ZIP codes and 677 counties in all 50 states and the District of Columbia, the company said. First American CoreLogic can be found online at http://www.facorelogic.com.

The housing bill signed by President Bush raises the loan limit in Federal Housing Administration reverse mortgages to at least $417,000 nationwide, but it could be much higher under some interpretations. Peter Bell, president of the National Reverse Mortgage Lenders Association, said he is "getting conflicting feedback" about the section of the bill that raises the loan limits for FHA-insured reverse mortgages, which are formally known as Home Equity Conversion Mortgages. Some believe the loan limit for HECMs could be $625,500 nationwide. Others say the loan limits above $417,000 should be determined by multiplying the median home price by 115%, up to a maximum of $625,000. It looks like the Department of Housing and Urban Development will have to make the final call. "In the end, it will be whatever HUD's attorneys, in consultation with Capitol Hill, decide it is," Mr. Bell said. NRMLA can be found online at http://www.reversemortgage.org.

Five classes of notes issued by Vertical ABS CDO 2006-1 Ltd./Corp., a collateralized debt obligation consisting largely of subprime mortgage-backed securities, have been downgraded and removed from Rating Watch Negative by Fitch Ratings. The downgrades were as follows: class A-S1VF, from BBB-plus to CCC; class A-1, from BBB to CC; class A-2, from BB-plus to CC; class A-3, from B-plus to C; and class B, from CCC to C. The downgrades were attributed to collateral deterioration involving subprime residential MBS, alternative-A RMBS, and structured finance CDOs with underlying exposure to subprime RMBS. Vertical 2006-1 is a hybrid cash flow and synthetic structured finance CDO.

KeyCorp, a Cleveland-based financial services company and mortgage lender, has been designated the "Bear of the Day" for July 30 by Zacks Equity Research, Chicago. The Bear of the Day is a stock expected to underperform the markets over the next three to six months. The research firm noted that KeyCorp reported a second-quarter loss from continuing operations of $2.70 per share, due mainly to a $2.43-per-share charge related to an adverse federal court ruling on a lease adjustment. The company's credit quality "worsened significantly" during the quarter, Zacks said. "Though the company has taken steps to reduce its exposure to the commercial real estate residential properties segment, we anticipate higher losses in the CRE portfolio in the coming quarters, particularly in view of its sizable exposure to the difficult markets of California and Florida," Zacks said, adding that it is maintaining its Sell rating for KeyCorp. Zacks can be found online at http://www.zacks.com, and KeyCorp can be found at http://www.key.com.