Originations

The average 30-year fixed mortgage rate was unchanged, at 6.24%, for the seven-day period ended Nov. 15, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate fell from 5.90% to 5.88%, the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages climbed from 5.89% to 5.96%, and the average rate for one-year Treasury-indexed ARMs was unchanged, at 5.50%, Freddie Mac reported. Fees and points averaged 0.4 of a point for fixed-rate mortgages and hybrid ARMs and 0.5 of a point for one-year ARMs. "Higher productivity growth in the third quarter, coupled with a larger-than-expected decline in consumer confidence in November, sent mixed signals on the current state of the economy," said Frank Nothaft, Freddie Mac's chief economist. "As a result, there were no definite upward or downward pressures on mortgage rates this week." A year ago, the average 30-year and 15-year fixed rates were 6.24% and 5.94%, respectively, and the average hybrid and one-year ARM rates were 6.04% and 5.53%, Freddie Mac said. Freddie can be found online at http://www.freddiemac.com.

Stewart Title Co., Houston, has announced the introduction of a Green Title Policy that promises to use electronic means to reduce the amount of paper and other resources consumed by real estate transactions."In a typical real estate transaction, the amount of paper and other resources used is staggering," said Stewart Morris Jr., president of Stewart Title. "Across the industry, depending upon the type of transaction, approximately 460 pieces of paper are generated in a single closing." Mr. Morris said the Green Title Policy will enable customers to order title and escrow services electronically and have the title commitment and closing statement sent electronically. Stewart Title offices will move to meet green certification requirements in various areas, he said. Stewart Title of Colorado - Denver is the first Stewart office to obtain green certification. The company can be found online at http://www.stewart.com.

Origination vendor Mortgage Cadence Inc., Denver, has launched Mortgage Cadence Prelude, a point-of-sale tool designed for use by lenders moving into the growing reverse mortgage lending channel.With four of the top five reverse lenders in the country already using its Mortgage Cadence Orchestrator application, the company says there is a desperate need for reverse lending POS software that is easy to use and interfaces well with origination platforms at the nation's largest reverse mortgage lending firms. Mortgage Cadence Prelude will not be a preconfigured version of Mortgage Cadence Orchestrator and is not designed for lenders already using that application, the company said. Rather, it is point-of-sale software specifically written for the reverse mortgage market. The company can be found on the Web at http://www.mortgagecadence.com.

Ludvik Capital Inc., Wilmington, Del., has announced the formation of a subsidiary to acquire properties in Florida, Alabama, Maryland, and Georgia.Ludvik said it has authorized up to $700 million in preferred equity redeemable convertible stock for acquisitions by the subsidiary, Ludvik Properties Inc. "The preferred equity will provide for the build-out and acquisitions of approximately $2 billion over the next 10 years," the parent company said. "Ludvik intends to partner with experienced companies to manage the hotels, resorts, vacation ownerships, and vacation rentals it is proposing to acquire." The company can be found on the Web at http://www.ludvikcapital.com.

Nearly one in three buyers between June 2006 and June 2007 had no skin in their deals, according to new research that represents further evidence of the poor quality of loans that helped fuel the rising tide of delinquencies and foreclosures.Though the study of nearly 10,000 transactions by the National Association of Realtors did not note whether the loans were prime or subprime, it found that 29% of all buyers -- and 45% of all first-timers -- financed the entire purchase price. Somewhat surprisingly, considering that they usually have money from the sale of their previous residence to put into the transaction, 18% of repeat buyers also put up none of their own money. In addition, the study found that more existing-home buyers than new-home purchasers used 100% financing, 30% vs. 25%. More than half -- 53% -- of all buyers made downpayments of 10% or less, and almost three out of four -- 72% -- financed 80% or more of what they paid. As for the source of their downpayments, 10% of all buyers used money from gifts, 8% sold stocks or bonds, 6% raided their retirement accounts, and 3% got a loan from a relative or a friend. The NAR study was released at the group's annual convention in Las Vegas. The association can be found online at http://www.realtor.org.

The Rev. Al Sharpton is calling on Senate Democrats to stop the Department of Housing and Urban Development from killing downpayment assistance programs that help Federal Housing Administration homebuyers just as the Democrats are trying to pass an FHA reform bill that also prohibits DPA programs.The civil rights activist said House Democrats have moved to block a HUD rule that would prohibit seller-funded downpayment assistance that Nehemiah Corporation of America and other nonprofits arrange for FHA borrowers. But Senate Banking Committee Chairman Christopher J. Dodd, D-Conn., has been "missing in action," the Rev. Sharpton told reporters, when it comes to saving this homeownership program for minorities and low-income families. However, the Senate Banking Committee has approved an FHA reform bill that lowers the FHA downpayment requirement from 3.0% to 1.5% and prohibits seller-funded downpayment assistance on FHA loans. Senate Majority Leader Harry Reid, D-Nev., was trying to get the Senate to vote on an FHA reform bill Thursday. But Senate Republicans are stonewalling the Democrats on several major bills. The FHA reform bill's chances of getting through appear to be slim.

Mortgage lender Downey Financial saw its nonperforming assets increase to $388 million at the end of October, a 50% jump in just three months' time.The California-based thrift reported that 2.74% of its $14.18 billion in assets were nonperforming at the end of October, compared with 1.77% at the end of July. (At the end of July it had reported assets of $14.66 billion.) In a research note, Credit Suisse said, "With ARM resets looming, coupled with declining home prices, borrowers are finding it much more difficult to refinance existing loans, exacerbating Downey's delinquency problem." Downey can be found on the Web at http://www.downeysavings.com.

Subprime lender Nationstar Mortgage -- which is owned by hedge fund giant Fortress Investment Group -- says it is no longer funding A-minus to D loans."Due to the recent market disruption, we now only originate conforming Fannie Mae loans," Nationstar executive vice president Steve Hess told MortgageWire. In March 2006, a unit of Fortress Investment Group agreed to purchase Centex Home Equity Co., Dallas, in a deal valued at about $575 million. After the sale, Fortress changed CHEC's name to Nationstar. At the time of the deal, CHEC was the nation's 28th-largest subprime lender. The lender no longer discloses its production or servicing figures to the public. Nationstar can be found online at http://www.nationstarmtg.com.

Class K of Bear Stearns commercial mortgage pass-through certificates series 2004-BBA3 has been downgraded from BBB to BBB-minus by Fitch Ratings and removed from Rating Watch Negative.Fitch also upgraded one class in the transaction and affirmed the ratings on three other classes. The downgrade was taken due to continued deterioration in the performance of the two remaining loans: Riverside Center shopping center in Utica, N.Y., and Sheffield Office Park in Troy, Mich., the rating agency said.

Class M of First Union National Bank-Chase Manhattan Bank's commercial mortgage pass-through certificates, series 1999-C2, has been downgraded from B to CCC/DR1 by Fitch Ratings.In addition, Fitch affirmed the ratings on 12 other classes in the deal. The downgrade is the result of expected losses on the two specially serviced loans, Fitch said. The first is secured by a multifamily property in Euless, Texas. The second, a real-estate-owned asset, is secured by a 51,282-square-foot retail property in Chesapeake, Va., formerly occupied by a Winn Dixie. Fitch said it expects losses from both loans to be absorbed by the nonrated class N.

Twelve certificates from seven Credit Suisse First Boston mortgage-backed securities deals issued in 2002 and 2003 have been downgraded by Moody's Investors Service.Moody's also placed one certificate under review for possible downgrade. The negative rating actions were attributed to credit enhancement levels that are deemed to be low in view of projected losses on the underlying pools. "These pools of mortgages have seen high loss severities in recent months, and future losses could cause a more significant erosion of the overcollateralization in some cases," the rating agency said. CSFB Mortgage-Backed Pass-Through Certificates series 2002-5, 2002-18, and 2003-AR26 are backed by alternative-A mortgage loans, while CSFB Mortgage Securities Corp. series 2003-4, 2002-HE4, and 2002-HE16, along with CSFB Mortgage Acceptance Corp. series 2002-HE4, are backed by fixed- and adjustable-rate, first-lien subprime mortgage loans.

Hudson Realty Capital LLC, a New York-based real estate private equity firm, recently closed its fourth real estate opportunity fund with $350 million of commitments.HRC said its Fund IV, which will have more than $1 billion in origination capability, will be used for debt and equity investments in middle-market real estate transactions. Credit Suisse acted as the exclusive financial adviser and placement agent for the fund. Sanford Herrick, managing director of HRC, said the company's investment strategy "has not changed since the closing of our first two funds in 2002. We continue to focus on middle-market opportunistic investments with appropriate risk-adjusted returns."

General Growth Properties Inc. says it plans to appeal a recent $74 million verdict and $15 million punitive damage award by a California jury in a lawsuit alleging intimidation by the real estate investment trust.A Superior Court jury in Los Angeles awarded the compensatory damages in a suit filed against General Growth Properties by Caruso Affiliated Holdings LLC involving Glendale Galleria, a California mall. The suit alleged that the company intimidated The Cheesecake Factory while it was exploring leasing at The Americana at Brand and interfered with Caruso's business using unfair business practices. General Growth owns the Glendale Galleria adjacent to Caruso's Americana at Brand, a $369 million retail building in downtown Glendale. "The company emphatically disagrees with the jury's verdict and will pursue review and reversal through every available means," General Growth said. The case has been in court for over three years. Rick J. Caruso, chief executive of Caruso Affiliated, said he hopes that "by fighting this case we will have set a precedent throughout the retail industry that the giant REITs can no longer use intimidation to squash competition. They will have to play fair on a level playing field with the rest of us."

Fair Isaac Corp., Minneapolis, and Payment Reporting Builds Credit, a credit information repository based in Annapolis, Md., have announced the introduction of the PRBC Credit Report With FICO Expansion Score, a credit risk-management tool for mortgage lenders.The new tool will combine Fair Isaac's FICO Expansion Score with the PRBC Credit Report, which includes rental and bill payment data, nontraditional credit history data from third-party sources, and traditional tri-merge credit bureau data (when available). The FICO Expansion Score will incorporate the data when calculating the credit risk of individuals with minimal or no credit history on file, the companies said. "PRBC's alliance with Fair Isaac is an important step toward freeing mortgage lenders from the expensive and time-consuming manual underwriting procedures they encounter when they try to lend to people who have little or no documented credit experience," said Michael Nathans, founder of PRBC. The companies can be found online at http://www.fairisaac.com and http://www.prbc.com.

The Market Composite Index, an overall measure of mortgage applications, rose from 670.6 to 707.3 on a seasonally adjusted basis during the week ended Nov. 9, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications increased 4.2% on the week and were up 21.8% from the level recorded a year earlier. The Purchase Index rose from 412.7 to 432.6 on a seasonally adjusted basis, while the Refinance Index climbed from 2176.1 to 2315.7. Refinancings represented 50.2% of total applications, up from 49.1% the previous week, while adjustable-rate mortgages accounted for 15.5%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages rose from 6.16% to 6.19%, and points (including the origination fee) rose from 1.08 to 1.16 for loans with 80% loan-to-value ratios, the association reported. The MBA can be found online at http://www.mortgagebankers.org.

The National Association of Realtors' Pending Home Sales Index increased only slightly in September, but this belies the fact that 2007 should go down as the fifth-best year ever for existing-home sales, the group's chief economist said at its annual convention in Las Vegas.Moreover, economist Lawrence Yun said, it masks a marked improvement for 2008, as the long-hoped-for housing recovery begins to take seed. "The pace of the recovery in '08 is still a bit uncertain," he said. But as the impact of the credit crunch continues to subside and pent-up demand is unleashed, the NAR forecaster is predicting that resales should edge up from 5.67 million this year to 5.69 million next year as activity increases in each subsequent quarter. Stressing the new NAR mantra that "all real estate is local," Mr. Yun said national overviews are important for policy-making decisions but that local data are more important for "everyday consumers." He pointed out that markets such as Austin, Texas, and Raleigh, N.C., have been going strong throughout the downturn, and others, such as Denver and Boston, are already showing early signs of recovery. At the same time, though, Detroit, suffering from three straight years of job losses, is in dire shape; Sarasota, Fla., is showing close to a double-digit price decline after experiencing one of the strongest booms in the country; and California's inland counties are questionable. The NAR can be found online at http://www.realtor.org.

Federal Housing Administration Commissioner Brian Montgomery chided the Senate at the National Association of Realtors' convention in Las Vegas for moving too slowly on legislation that would modernize his agency.The Senate Banking Committee cleared its version of FHA reform legislation in mid-September -- a day after the full House approved its bill -- but the committee chairman and presidential candidate, Sen. Christopher J. Dodd, D-Conn., didn't place the measure into the Senate hopper until Nov 13. "The time to move [FHA reform legislation] was last year," Mr. Montgomery said, "but we can still have a profound impact if we act this year." Noting that the Department of Housing and Urban Development has been asking Congress to revamp and revitalize some of the FHA's key programs for nearly two years, the commissioner said lawmakers could have spared a lot of homeowners "a lot of misery" had they already acted to lower FHA downpayment requirements and raise loan limits. The NAR and other advocates of FHA reform are hoping the full Senate will act before Congress quits for the holiday season in early December. And if it does, NAR lobbyists may try to persuade lawmakers to attach a rider that would enhance regulatory oversight of Fannie Mae and Freddie Mac. GSE reform legislation is also stalled in the Senate.

Fannie Mae's servicers are reworking loans for delinquent borrowers at the rate of 750 a week as part of its effort to bring stability to the housing sector, Fannie president and chief executive Daniel Mudd told real estate professionals gathered in Las Vegas Nov. 13 for their annual convention.The workouts are part of the government-sponsored enterprise's expanded effort to promote sustainable homeownership. Under its HomeStay initiative, Mr. Mudd told the National Association of Realtors meeting, Fannie Mae has also backed new, safer fixed-rate loans for 45,000 subprime borrowers who aren't yet late on their payments, but could be if they waited until their adjustable-rate mortgages reset. But in the face of what he called "the most serious disruption in the mortgage markets in decades," the Fannie CEO said the GSE could do more if it were able to buy more mortgages and its loan limits were raised in more high-cost areas. Mr. Mudd predicted that housing prices will continue to fall throughout 2008 -- and that it "may be years" before price appreciation returns to the "customary" 5% a year. But despite the dire forecast, and fear that another wave of foreclosures is coming next spring, Mr. Mudd said he had no doubt that the housing sector is on solid footing. "I completely believe we are going to get through this," he told the conference. "Beyond the correction, the future of housing looks good."

Fannie Mae and Freddie Mac should be focused on rescuing subprime borrowers as opposed to developing a new line of products to serve the jumbo market, according to the regulator of the two government-sponsored enterprises.The chairman of the Federal Reserve Board recently suggested to Congress that the two GSEs could play a role in securitizing jumbo mortgages. But James Lockhart, director of the Office of Federal Housing Enterprise Oversight, told MortgageWire that the GSEs have no expertise in the jumbo market. "Our view is that at the moment, Fannie and Freddie have their hands full in the conforming loan market -- and in particular the lower-credit-quality portion of the conforming loan market," Mr. Lockhart said in the interview. "That is where they should be concentrating their firepower." The OFHEO director said Fannie and Freddie are doing a reasonably good job in refinancing subprime borrowers that are current on their payments. However, they need to make more of an effort to help borrowers that need loan modifications or partial writedowns. "We will be discussing this with the Fed," he said.

Bank of America -- the nation's second-largest commercial bank -- says it will take a $3 billion writedown to reflect a decline in the value of mortgage securities on its books.Shortly after BoA revealed the charge, Bear Stearns & Co. said it would take a $1.2 billion writedown tied to the declining value of subprime and assets related to collateralized debt obligations. Both announcements came as executives from the two companies gave further details about their third-quarter performance. To date, banks, thrifts and Wall Street firms have taken close to $40 billion in writedowns tied to CDOs and subprime-related investments. Over the past seven years, Bear has been a major buyer and securitizer of subprime loans. BoA's role in funding the B&C market is less clear, though it was an investor in certain CDOs that contained subprime tranches.