Originations

BioMed Realty Trust Inc., San Diego, has priced a public offering of 5.7 million shares of common stock at $25.50 per share. BioMed said it has granted the underwriters an option to buy up to 855,000 additional shares to cover any overallotments. The underwriters are: Raymond James & Associates, Morgan Stanley & Co., Wachovia Capital Markets LLC, KeyBanc Capital Markets Inc., Robert W. Baird & Co., Credit Suisse Securities (USA) LLC, RBC Capital Markets Corp., and Stifel, Nicolaus & Co.

American Campus Communities Inc., Austin, Texas, has priced a public offering of 8 million shares of common stock at $28.75 per share. The real estate investment trust, which focuses on developing, owning, and managing student housing, said the underwriters have been given an option to buy up to 1.2 million additional shares to cover any overallotments. Merrill Lynch & Co. and KeyBanc Capital Markets were the joint book-running managers of the offering. The REIT can be found online at http://www.studenthousing.com.

Primary Residential Mortgage Inc., Salt Lake City, has announced a partnership with Mortgage Success Source to provide PRMI branches nationwide with training and marketing resources to help increase originations. Mortgage Success Source is the umbrella company of a recent partnership between Mortgage Market Guide, LoanToolbox, and The Duncan Group. PRMI said its branch partners will have free access to MSS products and services such as the Mortgage Market Guide, a real-time source of market data, commentary, and advice; LoanToolbox PlatinumPro, an automated marketing system that helps originators communicate more effectively; the full LoanToolbox Suite (which will be available free for six months); and training conference calls every six weeks with mortgage consultants. PRMI can be found online at http://www.branchpartner.com.

An attorney in Tucson, Ariz., is touting a recently patented financing method that he says can provide relief to homeowners on the brink of foreclosure without government assistance. Stephen M. Weeks, a founding partner of Weeks & Laird PLLC, says he developed the system, called Term Ownership, while representing homeowners harmed by predatory subprime loans. When refinancing under the system, the owner pays 30% of a home's fair market value (fully amortized over five years), while an investor or financial institution pays 70% plus closing costs. The owner continues to have the tax advantages of ownership and can obtain equity if the home's price rebounds, the law firm said. "For the financial institution, instead of facing an average $60,000 foreclosure loss, it turns an unprofitable situation into a profitable one and gains [Community Reinvestment Act] credit and public goodwill," the firm said.

The issuance of Ginnie Mae mortgage-backed securities rose to nearly $15 billion in March, the highest rate since November 2003, according to the agency. Theodore B. Foster, senior vice president for mortgage-backed securities at Ginnie Mae, said issuance has been increasing steadily since October. As the subprime mortgage and private-label MBS markets collapsed, "investors began moving toward the safety and stability of Ginnie Mae MBS," he said. Ginnie Mae's share of the MBS market declined to a low of 4% in 2005. Now, the private-label MBS market -- backed primarily by subprime loans -- represents just 7% of the total MBS market, compared with 57% two years ago, Ginnie Mae reported. "Currently, agency and government MBS are the primary sources of mortgage credit available for home financing," Mr. Foster said. "There is strong evidence that this trend will continue. Our issuers have indicated that as much as 30% or 40% of their business may be securitized through Ginnie Mae this year. We expect Ginnie Mae to issue between $175 and $200 billion in MBS in calendar year 2008." Ginnie Mae, a government-owned corporation within the Department of Housing and Urban Development, can be found online at http://www.ginniemae.gov.

The chief economist for the New York Stock Exchange says rising commodity prices coupled with the housing downturn's drag on the economy is fostering the possibility of "stagflation," a mixture of inflation and economic weakness last seen in the 1970s. Speaking at SourceMedia's second annual mortgage servicing conference in Dallas, former New York Federal Reserve economist Paul Bennett said he does not see "much sign of a bottom" in housing conditions, given the continuing declines in residential construction activity. He said home prices, already down about 10% to 15% nationally last year, may fall by a similar amount this year. Competition for oil and other scarce resources from rapidly growing economies such as China is driving up prices for many commodities, he said. That is adding to inflationary pressure despite the economic weakness in the United States. Still, he expects the Federal Reserve Board to continue reducing interest rates in the near term to help stabilize the U.S. housing sector and offset the risk that rate resets will drive up foreclosures.

Citigroup Inc. incurred $6 billion in pretax subprime mortgage writedowns/credit costs and took a net $5.1 billion loss in the first quarter. Other writedowns during the quarter included "a downward credit adjustment of $1.5 billion related to exposure to monoline insurers," the company said. Fitch downgraded Citi's long-term issuer default rating and Standard and Poor's put Citi's counterparty credit rating on CreditWatch Negative in response to its earnings results. Citi chief executive officer Vikram Pandit said the company is taking steps to offset its concerns, including realigning its mortgage business, planning the sale over time of huge volumes of on-balance-sheet mortgage assets, and launching multibillion-dollar capital raising efforts.

Twenty-one classes of mortgage pass-through certificates from various subprime Ameriquest Mortgage Securities Inc. transactions have been downgraded by Fitch Ratings. Fitch also placed six of the downgraded classes on Rating Watch Negative and affirmed the ratings on 74 other classes in 15 Ameriquest deals. The negative rating actions were based on a deteriorating relationship between credit enhancement and expected losses, the rating agency said. The collateral generally consists of fixed- and adjustable-rate subprime mortgage loans.

One hundred and eighty-four additional classes of subprime mortgage pass-through certificates were downgraded by Fitch Ratings on April 16 as a result of changes to its subprime loss forecasting assumptions. Fitch also placed three classes on Rating Watch Negative and affirmed the ratings on classes with outstanding balances of more than $9.2 billion. The pass-through securities affected by the latest downgrades were: 82 classes from nine issues by Park Place Securities Inc.; 75 classes from 11 issues by Ameriquest Mortgage Securities Inc.; 16 classes from two issues by Citigroup Mortgage Loan Trust; and 11 classes from two issues by Quest Trust. 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." Fitch can be found online at http://www.fitchratings.com.

Loans4Less.com Inc., an online mortgage brokerage based in Redondo Beach, Calif., has announced that its stock has begun trading over the counter on the Pink Sheets. The ticker symbol is LFLS. Loans4Less said it is exploring joint ventures, licensing, equity financing, and acquisition arrangements with third-party finance companies and major banks. The company can be found on the Web at http://www.loan4less.com.

One in 33 U.S. homeowners will likely be in foreclosure over the next two years as a result of subprime loans made in 2005 and 2006, according to a report released by The Pew Charitable Trusts. The numbers projected for Nevada and Arizona are much higher -- 1 in 11 and 1 in 18, respectively -- and another 40 million neighboring homeowners may see their property values and their municipalities' tax bases decline by up to $356 billion, says the report, "Defaulting on the Dream: States Respond to America's Foreclosure Crisis." Pew said states are generally in the forefront of developing policies aimed at preventing abusive lending. "Let's make certain federal laws build upon, rather than pre-empt, the strong and smart state efforts already under way and ensure that states retail flexibility to respond to local circumstances," said Shelley A. Hearne, managing director of Pew's Health and Human Services Program. Pew can be found online at http://www.pewtrusts.org.

LaSalle Hotel Properties, Bethesda, Md., and LaSalle Investment Management, Chicago, have announced a joint venture to seek U.S. hotel investments in urban and resort markets with high barriers to entry. The companies said they plan to invest up to an aggregate of $250 million of equity in the venture. LaSalle Hotel Properties, a real estate investment trust, will own 15% of the venture, which is expected to have an acquisition period of up to three years and a life of up to seven years, the companies said. They can be found online at http://www.lasallehotels.com and http://www.lasalle.com.

MGIC Investment Corp., Milwaukee, has reported a net loss of $34.4 million ($0.41 per share) for the first quarter, compared with net income of $92.4 million ($1.12 per share) a year earlier. Curt S. Culver, MGIC's chairman and chief executive, said the loss stemmed from increases in delinquencies and foreclosures. Higher loss severities and lower cure rates, especially in California and Florida, also affected MGIC's results. Delinquencies, including loans insured through the bulk channel, totaled 7.68% as of March 31, compared with 5.92% a year earlier. Losses incurred in the first quarter totaled $691.6 million, up from $181.8 million for the same period in 2007. On the good news front, new insurance written totaled $19.1 million in the first quarter, compared with $12.7 billion a year earlier. Persistency also continued to improve, standing at 77.5% as of March 31, compared with 70.3% on the same date last year.

Lenders have tightened their credit standards on residential and commercial real estate loans over the past six weeks, but there has been "some stabilization" in single-family originations, according to the Federal Reserve's Beige Book. "Banks reported mixed trends in lending activity, with fairly widespread slowing in the consumer segment, but some stabilization, at low levels, in residential mortgage activity," the April Beige Book says. The Fed's periodic report of economic activity refers to housing sales and construction as "generally anemic," with declines or downward pressure on selling prices in nine of the 12 Federal Reserve districts. Meanwhile, activity in the CRE sector has slowed, and eight districts reported "weaker" rental conditions. "The Boston, Philadelphia, Minneapolis, Kansas City, Dallas, and San Francisco districts all reported weakness in CRE sales and prices," the Fed publication said.

Freddie Mac has enlisted three major mortgage lenders to start up its jumbo mortgage program, and it is looking to enter into agreements with other lenders, according to a Freddie executive. Freddie Mac will provide 90-day forward pricing on jumbos originated by Wells Fargo Home Mortgage, Chase Home Finance, and CitiMortgage and purchase those newly originated mortgages for its portfolio, according to Freddie vice president Bob Ryan. "We expect to take some deliveries in April, and for sure in May," Mr. Ryan said. Separately, Fannie Mae said it has provided 90-day forward pricing for its lenders since April 1. "We have 90-day forward MBS commitments available as well and already have several in place," Fannie spokesman Brian Faith said. Fannie and Freddie can also purchase seasoned jumbos that were originated after June 30, 2007, under the economic stimulus bill Congress passed in February, which temporarily raises the conforming loan limit to 125% of median home prices in high-cost areas, with a maximum cap of $729,750. "We have consummated some trades" on seasoned jumbos, "but those are small amounts," Mr. Ryan said.

ValuAmerica, Pittsburgh, a developer of settlement services technology, has announced a new release of its ValuNet xsp software aimed at preventing directed appraisals and ensuring compliance with federal valuation requirements. The system will also help lenders comply with a recent agreement on appraisals between the New York attorney general and Fannie Mae, Freddie Mac, and the Office of Federal Housing Enterprise Oversight, the company said. "It's the industry's worst-kept secret: some lenders apparently would rather face a fine from their regulators than risk alienating their commission-based loan officers by preventing them from meddling in the appraisal selection and review process," said Robert Murphy, chairman and chief executive of ValuAmerica. ".... Now that Fannie and Freddie have developed their new code, lenders should be looking for new ways not only to end appraisal pressure but to document their compliance." ValuNet xsp is designed to prevent loan officers from selecting or contacting appraisers by automatically selecting appraisers based on their licensing, skill levels, location, price, workload, and past performance, ValuAmerica said. The company can be found online at http://www.valuamerica.com.

The comptroller of the currency says he is uncomfortable with the way New York Attorney General Andrew Cuomo is trying to impose an appraisal standard on all institutions through a settlement agreement with Fannie Mae and Freddie Mac. "To have a situation where a one-off agreement with a single state would have a national policy impact raises questions as to whether that is an appropriate way to make these kinds of policies," Comptroller John Dugan said. The supervisor of national banks is planning to submit a comment letter on the settlement agreement by April 30. Mr. Dugan also questioned whether the settlement's "blanket prohibition" on the use of in-house appraisers or affiliated appraisal firms is necessary to assure "real" independence between the lending and appraisal functions. "It's not at all clear to me that means the appraisal function has to be outside the institution," the comptroller told members of the Exchequer Club in Washington.

Many subprime borrowers who receive loan modifications are still likely to fall back into default, according to servicing executives who spoke Thursday at SourceMedia's second annual mortgage servicing conference in Dallas. Weak housing markets, a possible recession, and changing borrower behavior mean that helping borrowers avoid foreclosure by modifying their loans will not always keep those borrowers out of trouble for long, the speakers said. Larry Litton, president and CEO of Litton Loan Servicing, said 35% of the high-foreclosure-risk loans that are modified at his firm end up back in default after the modification. Robert Meachum, executive vice president at Saxon Mortgage, said he believes that is actually on the low side. He expects 40% to 45% to re-default. While a 35% or higher default rate may sound high, Mr. Litton said it may be inevitable in today's environment. Moreover, he said such modifications are probably still in the interests of servicers, investors, and borrowers. Tightening up on modification requirements would lead to a higher frequency of foreclosure, and given the rising loss severity rates, it is best to try to keep foreclosure frequency down, he said.

Merrill Lynch -- once the largest Wall Street player in the subprime market -- took $4.5 billion in mortgage-related writedowns in the first quarter and revealed that it has additional asset-backed security exposure of $6.7 billion. The figures were released along with Merrill's announcement that it lost $1.97 billion in the first quarter, compared with a $2 billion profit a year earlier. The $4.5 billion in subprime charges includes a $1.5 billion writedown on ABS-related collateralized debt obligations and $3 billion in charges that Merrill says are "related to hedges with financial guarantors." At the end of the fourth quarter, Merrill said it had subprime ABS exposure of $5.1 billion. In early March the investment banking firm closed its subprime origination unit, First Franklin Financial Corp. of San Jose, Calif., and placed its servicing operation on the auction block. A little more than a year ago Merrill paid $1.3 billion for the units. The seller was National City Corp. of Cleveland.

Two classes of Citigroup Commercial Mortgage Securities Inc. commercial mortgage pass-through certificates, series 2006-C5, have been downgraded by Fitch Ratings. The downgrades were as follows: class M, from B-plus to B, and class N, from B to B-minus. In addition, class O (rated B-minus) has been assigned a Distressed Recovery rating of DR1, class L has been placed on Rating Watch Negative, and the ratings on 22 other classes have been affirmed. The negative rating actions were attributed to expected losses on five specially serviced loans, including three controlled by MBS Cos. on properties located in three Texas towns: Seabrook, Humble, and DeSoto.