Originations

Employment in the mortgage industry appears to be stabilizing, with a loss of only 700 jobs in February, as refinancing activity and loan workouts keep the current work force busy. The U.S. Bureau of Labor Statistics reported Friday that employment in the mortgage banker/broker sector fell from 364,800 in January to 364,100 in February. The industry has lost 28% of its work force since February 2006, and it is back to the level last seen in July 2002, according to the Mortgage Bankers Association's senior director of economic forecasting, Orawin Velz. "Job losses seem to be stabilizing," Ms. Velz said. "That is good news for us." However, the forecaster sees industry employment continuing to decline at a moderate rate for the rest of the year as the economy pulls out of a mild recession. "Originations will be quite strong in the first half" due to refinancings, she predicted. But refis will slow considerably in the second half as the economic stimulus package takes effect and the Federal Reserve stops easing, the MBA economist said. The BLS can be found online at http://stats.bls.gov.

More than 30 additional classes of subprime mortgage pass-through certificates were downgraded by Fitch Ratings on April 2 as a result of changes to its subprime loss forecasting assumptions. Fitch also placed three classes of subprime pass-throughs on Rating Watch Negative and affirmed the ratings on classes with outstanding balances of over $570 million. The securities affected by the latest downgrades were 33 classes from four issues of IndyMac mortgage pass-throughs. 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.

The average portfolio size of the apartment industry's largest owners is declining, while concentrations among apartment management firms are growing, according to a survey by the National Multi Housing Council. Apartment Investment and Management Co., Denver, was the nation's largest apartment owner for the third year in a row in 2007, although it shed more than 14,000 units to fall below 200,000 for the first time since 1988, the annual NMHC rankings found. Equity Residential, the No. 4 owner, sold 11,500 units. Meanwhile, most of the top managers boosted their portfolio holdings, with Riverstone Residential Group, Dallas, adding 64,000 units for a 70% increase. "The apartment industry has historically been dominated by smaller local and regional firms, particularly in the area of property management," said NMHC president Doug Bibby. "But that is clearly changing, as we see the emergence of several powerful national property managers. These firms are using economies of scale to overcome thin margins and to refute the conventional wisdom about property management being a low-growth area." The trade group can be found online at http://www.nmhc.org.

Kimpton Group Holding LLC, a San Francisco-based boutique hotel company, has announced the closing of its third institutional real estate fund, KHP Fund II LP. Kimpton, the parent company of Kimpton Hotels & Restaurants, said it had raised $246 million, 50% more than the amount raised three years ago in the first KHP fund, Kimpton Hospitality Partners LP. The company said KHP Fund II will build new boutique hotels in targeted areas, buy nonhotel buildings that can be converted to Kimpton hotels, and buy existing hotels that either "fit the Kimpton model" or are underutilized and can be repositioned as a Kimpton hotel. The company can be found online at http://www.kimptonhotels.com.

Zillow.com, Seattle, has announced the launch of Zillow Mortgage Marketplace, which it describes as a transparent lending marketplace offering borrowers "an anonymous and hassle-free way" to request custom loan quotes from registered lenders. Zillow said the marketplace includes "the industry's first-ever public feedback system" whereby borrowers rate the lenders they contact. Potential borrowers can request customized quotes by filling out a detailed loan request form that is submitted to lenders who have registered on Zillow and been confirmed as mortgage professionals. "Loan shoppers tell us they want real quotes -- not just teaser rates -- when doing their research online, and they want to control who and when they contact by shopping anonymously until they are ready to talk," said Rich Barton, chief executive officer and co-founder of Zillow.com. Consumers can access the Zillow Mortgage Marketplace by clicking on the Mortgages tab on Zillow's website at http://www.zillow.com.

MetLife Inc., New York, has announced that it will acquire EverBank Reverse Mortgage LLC, Bloomfield, N.J., from EverBank Financial Corp., Jacksonville, Fla. The terms of the planned transaction were not disclosed. MetLife said EverBank Reverse Mortgage would likely become a division or operating subsidiary of MetLife Bank, which added reverse mortgages to its product line in 2007. The bank can be found on the Web at http://www.metlifebank.com.

Frost Mortgage Banking Group has entered into an arrangement to operate as a division of Primary Residential Mortgage Inc., Salt Lake City, allowing Frost to focus on borrower relationships while PRMI provides a platform of financial and operational support. Under the agreement, Frost Mortgage will have access to PRMI's support services (including accounting, compliance/licensing, information technology, marketing, and quality control) and retail operation services (including secondary marketing and underwriting/risk management), the companies said. Frost Mortgage operates offices in New Mexico, Arizona, and Utah. "By allowing [PRMI] to handle our back office needs, we can continue doing what we do best -- originating mortgages," said Greg Frost, who manages Frost Mortgage and has been named vice president of national training at PRMI. Mr. Frost started in the mortgage industry in 1985, and founded Frost Mortgage Banking Group in 1991.

CNBS Financial Group Inc., Tampa, Fla., has announced the acquisition of the name HomeBanc for use on its banks and loan production offices. The bank holding company purchased the name for an undisclosed amount from the previous Atlanta-based HomeBanc Corp., which closed its mortgage loan business last August. CNBS Financial said it raised $49 million last year to build a de novo bank, Community National Bank of the South, which will now be known as HomeBanc. "Although the previous company wasn't a bank, but rather a leading residential lender, we knew it was highly regarded and had a positive name," said Jerry Campbell, chairman, president, and chief executive officer of CNBS. As part of the company's plan for marketing the HomeBanc name, golfer Brittany Lincicome will wear the HomeBanc logo on her golf shirts and sweaters while competing on the LPGA tour, CNBS said. The company can be found online at http://www.homebanc.com.

The Federal Housing Administration is requiring a second appraisal on jumbo mortgages above $417,000 in declining markets and limiting the maximum LTV on cash-out refinancings to 85%. The direct endorsement lender must select the appraiser for the second appraisal if the property is located in a market where house prices are declining, according to an FHA mortgagee letter. The letter also imposes a maximum loan-to-value ratio on cash-out refinancings. If the "loan balance exclusive of FHA's upfront mortgage insurance premium will exceed $417,000, the LTV may not exceed 85% of the appraiser's estimated value," the FHA says. The economic stimulus bill signed by President Bush in mid-February temporarily raises the FHA loan limit to 125% of median home prices in high-cost areas, with a cap of $729,725.

Triad Guaranty Corp., Winston-Salem, N.C., has raised the possibility of going into run-off and ceasing the writing of new mortgage insurance policies. The disclosure came in the company's delayed 10-K filing, which had been on hold because Triad said it was in discussions with an unnamed potential investor. The filing says the company needs to "significantly augment our capital resources in the second quarter of 2008 in order to preserve our ability to continue to write new insurance." But it has not yet succeeded in finding an investor. Meanwhile, Fitch and Moody's have cut the company's ratings. Fitch reduced the insurer financial strength rating from AA-minus to BBB-minus, while Moody's cut its IFS rating from Aa3 to Baa3 and kept it on review for a further possible downgrade. The Fitch move caused Freddie Mac to require Triad to come up with a remediation plan. Under a new Freddie Mac policy, Triad was not automatically dropped from a Type I to a Type II insurer when the rating was cut. Freddie said Triad has 90 days to submit the plan for approval, after which Freddie will determine whether to drop Triad into the Type II category, which imposes additional capital requirements and operational restrictions. Fannie Mae said it is in touch with Triad's management and that the company remains an approved mortgage insurance provider.

Nearly 140 additional classes of subprime mortgage pass-through certificates were downgraded by Fitch Ratings on April 1 as a result of changes to its subprime loss forecasting assumptions. Fitch also placed 17 classes of subprime pass-throughs on Rating Watch Negative, removed nine from Rating Watch Negative, and affirmed the ratings on classes with outstanding balances of over $2.6 billion. The securities affected by the latest downgrades were: 47 classes from six issues of Citigroup Mortgage Loan Trust mortgage pass-throughs; 34 classes from four issues of MASTR Asset Backed Securities Trust pass-throughs; 31 classes from four issues of IXIS Real Estate Capital Trust pass-throughs; and 27 classes from six issues of Morgan Stanley pass-throughs. 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.

The National Consumers League has announced the launch of MortgageTown, a website aimed at helping prospective buyers understand the risks and benefits of homeownership. MortgageTown explains "nine essential steps" to financing a home, advising consumers on choosing the right loan, closing on a home, protecting themselves from fraud and predatory lenders, and preventing foreclosure. "MortgageTown is a user-friendly and reliable source where consumers can become better versed in the process of getting a mortgage and what pitfalls to avoid as they head down that road," said NCL executive director Sally Greenberg. The new website can be found online at http://www.mortgaetown.org.

DocuSign, a Web-based electronic signature service, has announced its selection by Wells Fargo Funding as an approved electronic signature vendor. The Seattle-based DocuSign said its service enables loan originators working with Wells Fargo to speed up the origination process by getting disclosure documents signed electronically. "With DocuSign's enterprise-class eSignature service, originators can now get required documents, such as truth-in-lending notifications and 1003 applications, signed by borrowers in a matter of minutes, rather than the days needed for paper-based signing," the company said. DocuSign can be found on the Web at http://www.docusign.com.

Paying everyday expenses is the No. 1 use of proceeds by seniors for their reverse mortgage loan, according to a survey by the Consumer Credit Counseling Service of Greater Atlanta. The agency said of the 213 homeowners with such loans who were surveyed, 15% said they used proceeds for home repairs and maintenance; 8% provided care for dependents or paid medical bills; 7% paid property tax and homeowner's insurance; and 3% took a vacation. In addition, 19% said their budget was too tight; 16% felt they needed more liquid assets on hand; and 6% said they were falling behind on monthly payments, the group reported. The average borrower was 74 years old, lived in the home for 18.5 years, and had a current home value of $221,997. While nearly 80% of those surveyed were retired, 5% were working full time, another 10.5% were working part time, and the rest were looking for jobs.

Wachovia, Wells Fargo, and Bank of America were the top commercial/multifamily originators in 2007, according to the Mortgage Bankers Association. Other top-10 originators in the MBA's 4th Annual Commercial/Multifamily Finance Firms Annual Originations Rankings were Deutsche Bank Commercial Real Estate; Credit Suisse; Holliday Fenoglio Fowler LP; Capmark Financial Group Inc.; CBRE|Melody; Goldman, Sachs & Co.; and KeyBank Real Estate Capital. Wachovia was the top originator for real estate investment trusts, investments funds, Fannie Mae, and conduits, while Wells Fargo topped the list for life insurance companies and other investors and Bank of America led for commercial banks/savings institutions, the MBA reported. In addition, Capmark Financial Group was the top originator for Freddie Mac, Federal Housing Authority/Ginnie Mae, and specialty finance companies; TIAA-CREF for pension funds; and GE Real Estate for credit companies.

The Laborers' International Union of North America has announced that it will kick off a "Pigs at the Trough" tour April 3 in Los Angeles outside the annual meeting of KB Home to highlight the role of corporate homebuilders in creating the subprime crisis. LIUNA said homebuilders are seeking as much as $33 billion in tax breaks through the Foreclosure Prevention Act. "Corporate homebuilders helped create the current housing and mortgage crisis -- contributing to the loss of 232,000 construction jobs in 2007 alone -- by pushing buyers to subprime and high-risk loans through their own mortgage subsidiaries," the construction workers' union said. ".... At KB Home, for example, subprime lending increased 405% between 2005 and 2006. In the tax breaks homebuilders are seeking through the Foreclosure Prevention Act, KB could gain as much as $683 million." The union can be found online at http://www.liuna.org.

For the first time since last February, the total amount of primary new insurance written by members of the Mortgage Insurance Companies of America fell below $20 billion. The total stood at $19.2 billion written in February 2008, with $19.1 billion coming through the traditional channel, the lowest amount written in that channel since April 2007. In February 2007, there was $12.6 billion of traditional insurance and $4.3 billion of bulk insurance written. The bulk channel is suffering because of the problems in the subprime marketplace, as just 223 certificates or policies were issued during the month. At the end of February, $839.6 billion of risk was in force, compared with $676.9 billion a year earlier. There was $23.0 million of new pool risk written. Application volume stood at 152,786, compared with 138,679 in January and 123,059 in February 2007. The cure/default ratio had a significant rebound in February, as 47,933 cures and 60,911 defaults were recorded, for a ratio of 78.7%. January's ratio was just 51.4%. MICA can be found online at http://www.micanews.com.

Zacks Equity Research, Chicago, announced April 1 that Liberty Property Trust, Malvern, Pa., had been designated its "Bear of the Day," a stock expected to underperform the markets over the next three to six months. Zacks said the commercial real estate investment trust is still rated a Sell "despite a low comparative valuation" and recent price declines. "We expect rental rates to remain flat through 2008, as the company has assets in office markets that have high vacancies," Zacks said. "Additionally, Liberty continues to run a deficit to cash flow -- that is, the dividend is not being covered with operating cash. We expect this to continue in 2008, as competition for tenants will become worse in a faltering economy." Zacks can be found online at http://www.zacks.com, and Liberty Property Trust can be found at http://www.libertyproperty.com.

Impac Mortgage Holdings Inc., a real estate investment trust based in Irvine, Calif., has announced the settlement of "a majority" of its outstanding repurchase claims. The mortgage REIT said it is continuing to negotiate its remaining warehouse borrowings and, as a result, will be required to add disclosures and make changes to its financial statements for Dec. 31, 2007. Therefore, Impac said, it was unable to file its Form 10-K for 2007 during the 15-day extension period, but intends to file the form "as soon as practical." The company can be found online at http://www.impaccompanies.com.

Luminent Mortgage Capital Inc., Philadelphia, has announced a proposed restructuring under which it would convert from a real estate investment trust into a publicly traded partnership. Luminent said maintaining its REIT status is no longer beneficial to the company or its stockholders, and that freeing itself from the REIT income and asset tests will "significantly enhance its flexibility for investment diversification and cash management." After the restructuring, the company says it plans to offer fee-based services such as credit risk management, asset management advisory services, and sub-manager services for investment funds. Luminent can be found online at http://www.luminentcapital.com.