Originations

Standard & Poor's has announced that General Growth Properties will replace Mellon Financial Corp. in the S&P 500 and that two other real estate investment trusts will be replaced in the S&P REIT Composite Index.GGP, a Chicago-based REIT, will replace Mellon in the S&P 500 after the close of trading on June 29 because the latter is merging with The Bank of New York Co. to create The Bank of New York Mellon Corp., S&P reported. Supertel Hospitality Inc., Norfolk, Neb., will replace Winston Hotels Inc. in the S&P REIT Composite after the close of trading on June 29 because Winston is being acquired by Inland American Real Estate Trust Inc. In addition, Republic Property Trust, Herndon, Va., will replace Innkeepers USA Trust after the close of trading on June 29 because Innkeepers is being acquired by Apollo Investment Corp.

FTSE Group has announced the launch of two European indices focused on real estate investment trusts and non-REITs.The FTSE EPRA/NAREIT Europe REITs and Non-REITs indices, a subset of the company's EPRA/NAREIT Global REITs and Non-REITs Index Series, are suitable for the creation of financial products such as index funds, warrants, certificates, and exchange-traded funds, FTSE said. The global series enables investors to differentiate REIT from non-REIT constituents according to country-specific legislation, the company said. At launch, the European REITs index included 36 companies from six countries: Belgium, France, Germany, Greece, Netherlands, and the United Kingdom. (EPRA stands for the European Public Real Estate Association, and NAREIT stands for the National Association of Real Estate Investment Trusts.) FTSE can be found online at http://www.ftse.com.

Representatives at the U.S. Conference of Mayors in Los Angeles have passed a resolution in support of privately funded downpayment assistance programs pioneered by the Nehemiah Corporation of America.The USCM extended its support to call on Congress to disapprove a controversial effort by the Department of Housing and Urban Development to ban PDA programs. The organization noted that DPA-assisted loans originated through the Federal Housing Administration have helped hundreds of thousands of low- to moderate-income families become homeowners. In the past decade, over a half-million families have purchased a home using DPA.

House prices declined at a 2.1% annual rate in April, according to the Standard & Poor's/Case-Shiller national housing index, which covers 20 metropolitan areas.The S&P/CS HPI has declined for 17 straight months, and it went into negative territory in February for the first time in 15 years. Robert Shiller, chief economist at MacroMarkets LLC, stressed that no region is "immune" from declining single-family house prices and that even healthy markets -- Portland (Ore.), Seattle, and Charlotte (N.C.) -- are seeing "weakening price returns." Separately, Freddie Mac chief economist Frank Nothaft told a NeighborWorks foreclosure conference that he is projecting stagnant nationwide house price appreciation of zero to 1% this year. Mortgage Bankers Association vice president Jay Brinkmann said the MBA is more pessimistic and expects a 1% decline in house prices this year. S&P can be found online at http://www.standardandpoors.com.

1st Metropolitan Mortgage, Charlotte, N.C., has announced the opening of a California subsidiary, The Mortgage Alliance Co., that will offer originators the option of being paid on a 1099 basis.1st Metropolitan said TMAC's model is based on 1st Metro's MetroBranching system and a desire to accommodate originators who want to join the company while retaining the option of being paid as licensees of the California Department of Real Estate. "California has multiple licensing types, one of which -- the DRE -- uses its real estate licensing structure to license mortgage brokers," said Daniel Jacobs, chief executive officer of 1st Metro and TMAC. "As a result, many California mortgage brokers are used to working under the special real estate salesperson exemption, which allows them to be paid via 1099." 1st Metro said many local and regional net-branch operators in California do not provide real back-office infrastructure or branch support. Mr. Jacobs said a survey revealed that the No. 1 reason originators affiliate with such operations anyway, instead of nationally branded branching companies such as 1st Metro, was "the requirement of being a W2 employee instead of a 1099 DRE licensee." The company can be found online at http://www.1stmetro.com.

Fidelity National Title Group, Jacksonville, Fla., has announced the introduction of a new product offering (in partnership with Experian Consumer Direct) aimed at helping its customers protect themselves against mortgage fraud.Under the partnership, Experian will offer Fidelity customers one year of credit monitoring, fraud resolution assistance, and a credit report at no cost. "We recognize that mortgage fraud and identity theft are a growing concern not only for our industry, but for our customers as well," said Randy Quirk, co-president of Fidelity National Financial, the parent company of Fidelity National Title. ".... Now, when our customers purchase title insurance from participating locations of our companies -- Fidelity National Title, Chicago Title, Ticor Title, Security Union Title, or Alamo Title -- they will receive a one-year membership to Experian Consumer Direct's CreditCheck Basic at no cost." The companies can be found online at http://www.fnf.com and http://www.experian.com.

A new association, the National Association of Mortgage Professionals Inc., has been formed to "[raise] the professional standards of the industry in an effort to bolster consumer confidence."The Irvine, Calif.-based association said the NAMP seal, the Mortgage "M," will serve as the "gold stamp of approval" for the industry. The NAMP said its Mortgage "M" program will qualify mortgage and loan professionals by requiring them to pass a series of credential checks in order to become a member. The credential checks will verify that an applicant has a valid license, is continuing education within the field, abides by and promotes the NAMP Code of Ethics, and passes a background check. Credentials will be confirmed annually, and the confirmation will include a check to ensure that the person is a member in good standing. "Consumers have lost faith in the lending industry as a whole, and we need a solution in place that will improve the way people experience the loan process -- NAMP does just that," said Michael Lefevre, founder and chief executive officer of NAMP. The association can be found online at http://www.namp.org.

The mortgage brokerage share of loan originations dipped to 58% in 2006, according to a preliminary tabulation by Wholesale Access Mortgage Research and Consulting, Columbia, Md.The small decline in market share from 63% of total loan volume in 2005 "could change" by the time the company releases its final tabulation, depending on the size of firms yet to be counted, the firm's Larry Pearl said at the National Association of Mortgage Brokers convention in Seattle, where the figures were released. But it seems highly unlikely the share could jump back to the 69% benchmark figure that was recorded by the firm as recently as 2004. Wholesale Access founder David Olsen said brokers "still dominate" the market, largely because they "do a better job for less." Brokers "do it cheaper and they do it better," he said. The firm now counts 53,000 brokerage firms, down from 54,000 in 2005 but the same number as in 2004. The count includes 3,500 net branches, or 6.5% of the total. That number has "increased considerably" in the last two years, Mr. Olsen told a convention session, and is likely to continue to grow -- "possibly at a faster rate" -- because government regulations are becoming more restrictive. The company counts a broker as being in business if someone answers to phone or the company does at least one loan a year.

Oxford Funding Corp., Houston, has announced plans to acquire Huntington Financial Corp., a Houston-based commercial and residential mortgage broker, citing a desire to expand its subprime lending.The terms of the deal were not disclosed. Huntington was founded in 1998 as a mortgage financing broker for real estate developers, investors, and private owners throughout Texas. "The acquisition of Huntington is another important step in our strategy of broadening Oxford's franchise in the subprime residential mortgage business," said Ron Redd, Oxford's chief executive officer. "The subprime meltdown delivers an unprecedented opportunity for Oxford Funding unheard of since the crisis of the 1990s. Acquisition of Huntington Financial provides Oxford with open origination capabilities in the nonprime market, which we can build upon to provide access to high-quality deal flow." Oxford can be found online at http://www.oxfordfunding.com.

A hedge fund called Pacifico is working on a deal to buy into Quality Home Loans of Agoura, Calif., industry sources have confirmed to MortgageWire.A QHL spokeswoman described the hedge fund as a "partner" but said a public announcement has yet to be made. A nondepository, QHL is owned by John Gaiser, who is also the lender's chief executive officer. QHL funds about $500 million a year in loans. In recent months hedge funds have been bottom-fishing for both subprime franchises and delinquent loan pools. QHL can be found online at http://www.qualityhomeloans.com.

Mortgage wholesaler First Street Financial, Irvine, Calif., a top-40-ranked subprime lender, has closed its doors and transferred all its servicing to a third-party company believed to be Option One Mortgage.In the fourth quarter, First Street originated $173 million in loans, ranking 35th nationwide among all subprime lenders, according to figures compiled by the Quarterly Data Report. Its chief executive officer was Dan Perl, an industry veteran who helped pioneer the NINA (no-income, no-asset verification) loan at Life Bank. Mr. Perl confirmed First Street's closing to MortgageWire.

After a 12.5% jump in new-homes sales in April, sales fell by only 1.6% in May, according to the government's latest report, indicating that sales may be stabilizing at a new level.Lynn Reaser, an economist at Bank of America, Boston, said sales may have hit their low point in the first quarter. "Perhaps the worst is behind us," she said. But she added that builders still face "difficult months ahead" until they get their inventories of unsold homes under control. The U.S. Census Bureau reported that sales of new single-family homes fell from a seasonally adjusted annual rate of 930,000 in April to 915,000 in May. April sales were revised downward by 51,000 units. Nevertheless, the revised number for April shows that sales surged by 103,000 units, or 12.5%, from the level recorded in March.

The class D notes and the preference shares of Trainer Wortham First Republic CBO III Ltd., a collateralized debt obligation consisting partly of residential and commercial mortgage-backed securities, have been placed on Rating Watch Negative by Fitch Ratings.In addition to residential and commercial MBS, the CDO consists of asset-backed securities, corporate debt, and other CDOs. The move was attributed to the fact that approximately 8.8% of the underlying portfolio collateral has been downgraded since the rating agency's last review in April.

Forty-five classes backed by closed-end second-lien collateral in 14 securitizations from nine issuers have been downgraded by Standard & Poor's Ratings Services, as well as 11 subprime classes in nine deals from three issuers.Of the closed-end second-lien classes, 27 were placed on CreditWatch with negative implications, 12 were left on CreditWatch negative, and six were removed from CreditWatch negative, S&P reported. Of the subprime classes, five were placed on CreditWatch negative, four remain on CreditWatch, and two were removed from CreditWatch. In addition, the ratings on 46 other classes (from 11 issuers) backed by closed-end second-lien collateral were placed on CreditWatch negative, as were 31 other classes (from 15 issuers) backed by subprime collateral. S&P said the downgrades and CreditWatch placements "reflect early signs of poor performance of the collateral backing these transactions." For the closed-end second-lien transactions, the percentage of severely delinquent (90-plus days, foreclosure, and real estate owned) loans in the pools ranges from 3.30% to 18.20% of the current pool balances, S&P reported. For the subprime transactions, the comparable percentages range from 5.27% to 17.06%. The rating agency can be found online at http://www.standardandpoors.com.

America First Apartment Investors, an Omaha, Neb.-based real estate investment trust, is being acquired by Sentinel Omaha for about $532 million, including the assumption of debt, in a deal that will take the multifamily REIT out of the publicly traded arena.Sentinel Omaha, an affiliate of the privately held Sentinel Real Estate Corp., is paying $25.40 in cash for each America First common share, the REIT reported. This represents a 24.9% premium over America First's recent share price on April 2, just prior to its announcing plans to explore its strategic alternatives with the help of Lazard Freres, the REIT said. David Weiner, vice chairman of Sentinel Real Estate, said he expects the REIT's portfolio to complement Sentinel's existing portfolio. He said he also expects to see "significant economies of scale" by integrating the REIT's approximately 7,000 units with the approximately 50,000 units Sentinel currently manages.

Jamison Law Group, Los Angeles, has announced the launch of Credit CRM, an out-of-the-box software and training system designed to empower mortgage originators to offer credit repair services to Americans with poor credit.Credit CRM includes full credit training as well as a credit and sales software system, unlimited telephone support, and a full Internet-based marketing system. Credit CRM is offered to businesses and individual entrepreneurs who are looking to start a credit repair business, and is often used as a supplemental business opportunity for mortgage professionals. The system provides Web-based sales management modules, over 20 hours of credit repair training, and a full marketing program. The announcement came at the National Association of Mortgage Brokers annual conference in Seattle. Jamison Law Group can be found on the Web at http://www.jamisonlawgroup.com.

In a move to enable affiliated credit reporting agencies to help borrowers raise their credit scores, Credit Systems Design has announced that it will make the credit analysis system Deal Maker Score available to its broad base of credit reporting company clients.The announcement came at the National Association of Mortgage Brokers annual conference in Seattle. CSD's affiliated credit reporting agencies service the mortgage industry's lenders and brokers on CSD's UltraAMPS mortgage processing system. By providing access to Deal Maker Score, CSD said it is making it easy for mortgage originators to show borrowers how they can raise their credit scores to a target score. CSD, which provides the technology that enables credit reporting companies to deliver merged credit reports to their clients, can be found online at http://www.creditsystemsdesign.com.

A new Freddie Mac subprime purchase program in development for release this summer is expected to support prepayment penalties, but in a more consumer-friendly manner than in the past, according to a presentation at the National Association of Mortgage Brokers annual convention in Seattle.The program, which Freddie has been testing with five or six lenders, will be in line with the government-sponsored enterprise's new restrictions on certain nontraditional mortgage purchases set to take effect Sept. 1, said Charles Coulter, vice president of sourcing strategies and solutions at Freddie Mac. When asked for further details, he said he could not be much more specific about the program because it is "still in development." However, when asked about prepayment penalties, he said the planned move down the credit curve is expected to support them, but would never allow them to go beyond the fixed period of the loans carrying them. Freddie Mac can be found online at http://www.freddiemac.com.

Unlike in past downturns, mortgage lenders are trying to hold mortgage brokers responsible for buybacks, but there are ways that brokers can protect themselves, according to Douglas Lowell Davies, an attorney with Lane Powell Attorneys and Counselors.Speaking at the National Association of Mortgage Brokers annual conference in Seattle, Mr. Davies said he has successfully represented several mortgage brokers that have been sued by lenders to pay for buybacks that investors have pushed back to the lender. He predicted that this is a trend that is likely to escalate and force brokers out of business if they are held liable in some cases. Mr. Davies advised brokers to come up with a short, one-page disclosure detailing all of the pertinent loan terms in plain English for each of their borrowers to sign. For stated-income loans, Mr. Davies added that brokers should have borrowers sign a document swearing, under penalty of law, that the income provided in the application is accurate.

Realtors have their capital "R," Good Housekeeping has its Seal of Approval, and now the National Association of Mortgage Brokers wants its own symbol so would-be borrowers will know its 25,000 members are honest and qualified.The branding initiative is part of the agenda for the coming year of the new NAMB president, George Hanzimanolis. "The seal would be a way for NAMB brokers to set ourselves apart in the mortgage community as responsible mortgage originators that consumers can rely on for ethical behavior, knowledge, and honesty," the Tannersville, Pa., broker said in his acceptance speech at the NAMB's annual convention in Seattle. Under the program, which is still in development, a "Lending Integrity" seal would be made available to all qualified NAMB members, said Mr. Hanzimanolis, who is president of Bankers First Mortgage. Besides the new seal, the NAMB is working on creating new specialized professional certifications and designations that will be useful in marketing to potential customers.