Originations

Opteum Inc., Vero Beach, Fla., posted a $78.1 million loss in the first quarter, blaming its problems on its residential mortgage business and "significant distress" in the secondary market. A publicly-traded real estate investment trust, Opteum's shares were hammered in trading the morning of May 11, falling by 23% to just over $4 a share. Its 52-week high is $9.24. The company recently announced that it would exit the residential funding business entirely, selling its retail network and shutting its wholesale/correspondent channel. In 2006 Opteum Financial Services, the residential arm of Opteum, funded $6.3 billion in loans, ranking 49th in the U.S., according to figures compiled by the Quarterly Data Report. (The ranking excludes subprime specialists.)

Impac Mortgage Holdings, one of the nation's largest alt-A funders, posted a $121.7 million loss in the first quarter, citing market-to-market losses on derivatives and charges tied to large loan buyback requests.Over the past two quarters the publicly traded Impac has lost $181 million. The Irvine-based company signaled that it is moving "aggressively" on settling loan buyback requests tied to early payment defaults. "We have closely monitored our reverse repurchase facilities to manage our margin call exposure," said CEO Joe Tomkinson. The nation's 10th largest alt-A originator, Impac funded or bought $2.2 billion of product in the quarter, compared to $2.1 billion in the year ago quarter. (In the fourth quarter in bought and funded $4.1 billion.) In response to a declining market it also laid off 15% of its 800 staffers.

NovaStar Financial earned $44.4 million in the first quarter thanks to an $84.2 million one-time tax gain tied to the subprime lender ending its REIT status next year.Without the one-time gain the Kansas City-based lender lost $39.8 million in the quarter. In the same period last year it earned $22.4 million. NovaStar funded $1.4 billion in the first quarter, a 21% decline from the same period last year. In a statement company chief financial officer Greg Metz explained the tax gain relates to "tax deductible temporary differences at the REIT that will reverse in 2008 and future years when the company will be a taxable entity." The market greeted NovaStar's earnings news positively, sending its shares up 7% to just under $7 a share in early afternoon trading on May 11.

Four certificates from Ace Securities Corp. Home Equity Loan Trust series 2005-SL1 have been downgraded by Moody's Investors Service.The downgrades were as follows: class M-6, from Baa2 to Ba2; class M-7, from Baa3 to B3; class B-1, from Ba1 to Caa1; and class B-2, from Ba2 to Caa2. "The actions are based on the analysis of the credit enhancement provided by subordination, overcollateralization, and excess spread relative to expected losses," Fitch said. The transaction is backed by second-lien, fixed-rate subprime mortgage loans.

Luminent Mortgage Capital Inc., San Francisco, has entered into a $1 billion warehouse facility with Greenwich Capital Financial Products Inc., according to Luminent.Of that total, $250 million is on a committed basis, the company said. Luminent, a real estate investment trust, can be found on the Web at http://www.luminentcapital.com.

New Vista Asset Management, a nationwide minority-owned asset management company, has announced an initiative to turn real-estate-owned properties into affordable housing that would increase minority homeownership.Minority-housing experts Gary Acosta and Jim Park, who own the company, will lead the effort that will include a nationwide network of nonprofit counseling agencies and minority real estate and mortgage professionals. Mr. Acosta, founder of the National Association of Hispanic Real Estate Professionals and a career mortgage banker, is chairman of the San Diego-based company. Mr. Park, who has worked at the Federal Housing Administration and Freddie Mac and heads the Asian Real Estate Association of America, is president. "New Vista’s mission is to turn a bad situation into a positive one by using REO properties to create more affordable housing opportunities for minority homebuyers and other underserved populations," Mr. Park said. New Vista can be found online at http://www.newvistareo.com.

The Market Composite Index, an overall measure of mortgage applications, rose from 657.2 to 680.7 on a seasonally adjusted basis during the week ended May 4, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications increased 4.0% on the week and were up 19.9% from the level recorded a year earlier. The Purchase Index rose from 427.3 to 438.3 on a seasonally adjusted basis, while the Refinance Index increased from 2015.8 to 2115.2. Refinancings represented 41.8% of total applications, up from 41.5% the previous week, while adjustable-rate mortgages accounted for 18.0%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages fell from 6.14% to 6.10%, and points (including the origination fee) rose from 1.31 to 1.48 for loans with 80% loan-to-value ratios, the association reported. The MBA can be found online at http://www.mortgagebankers.org.

The average 30-year fixed mortgage rate fell from 6.16% to 6.15% for the seven-day period ended May 10, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate was unchanged, at 5.87%, the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages climbed from 5.87% to 5.89%, and the average rate for one-year Treasury-indexed ARMs increased from 5.42% to 5.48%, Freddie Mac reported. Fees and points averaged 0.5 of a point for fixed-rate mortgages, 0.6 of a point for hybrid ARMs, and 0.7 of a point for one-year ARMs. "Low employment growth in April -- the slowest pace since November 2004 -- and downward revisions to both February and March job growth tempered market concerns of future increases in the rate of inflation," said Frank Nothaft, Freddie Mac's chief economist. "As a result, mortgage rates were little changed this week." A year ago, the average 30-year and 15-year fixed rates were 6.58% and 6.17%, respectively, and the average hybrid and one-year ARM rates were 6.22% and 5.62%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

The National Advisory Council has released national standards for consumer homeownership education and counseling that it says would help prevent a repeat of today's wave of foreclosures if widely adopted.The council said the standards are the product of a two-year development process led by industry stakeholders. It is "the first time that representatives from all corners of the housing industry have reached agreement on a set of benchmarks for the delivery of quality education and counseling to consumers across the nation," the council said. A 23-member National Homeownership Industry Standards Advisory Council that includes the Federal Reserve System, the Department of Housing and Urban Development, Fannie Mae, Freddie Mac, and Countrywide Financial Corp. has been established in connection with the new standards. Other members include NeighborWorks America, Bank of America, Chase, Citi, Wells Fargo, and the National Association of Realtors. A description of the National Industry Standards for Homeownership Education and Counseling can be found online at http://www.homeownershipstandards.com.

The National Community Reinvestment Coalition has filed a lawsuit against the subprime lender NovaStar, charging that the company discriminated against minorities wanting to buy row houses and individuals wanting to buy adult foster care for people with disabilities.Filed in U.S. District Court in Washington, the suit also charges that NovaStar refused to make loans to American Indians on reservations. While the lawsuit does not allege predatory lending by NovaStar, NCRC president and chief executive John Taylor said he found it "ironic that NovaStar was peddling loans with exploding interest rates and exorbitant fees to minorities in more traditional neighborhoods" while denying credit to other borrowers who qualified for loans. The NCRC says the suit represents the first time that the Federal Fair Housing Act has been used to bring charges of civil rights violations against lenders for refusing to make loans for row houses and adult foster care facilities. A media relations representative for NovaStar said the company had not received the lawsuit, but that "We believe the accusations in it are completely without merit, and we will defend against this lawsuit very vigorously."

The PNC Financial Services Group Inc., Pittsburgh, has announced an agreement to acquire ARCS Commercial Mortgage, Calabasas Hills, Calif.The terms of the agreement were not disclosed. ARCS, which has 10 origination offices in the United States, originated more than $2.1 billion of loans in 2006 and services approximately $13 billion of loans, PNC said. "ARCS will provide PNC with expertise and a customer base that complement our own," said William S. Demchak, PNC's vice chairman and head of corporate and institutional banking. "Together we will offer the full spectrum of financing and servicing options to multifamily owners and investors nationally." The acquisition is expected to be accretive to earnings within the first year, the company said. Beekman Advisors acted as financial adviser to ARCS on the transaction.

Class I of Credit Suisse First Boston Mortgage Securities Corp.'s commercial mortgage pass-through certificates, series 1998-C2, has been downgraded from B-minus to CCC/DR3 by Fitch Ratings.In addition, Fitch upgraded two classes and affirmed the ratings on six other classes in the deal. The downgrade was attributed to expected losses on two specially serviced assets.

Class M of PNC Commercial Mortgage Acceptance Corp.'s commercial mortgage pass-through certificates, series 2000-C1, has been downgraded from B-minus to CCC/DR2 by Fitch Ratings.In addition, Fitch downgraded the Distressed Recovery rating of class N from DR5 to DR6 and affirmed the ratings on 12 other classes in the transaction. The downgrade was attributed to increased loss expectations regarding the specially serviced loans and higher-than-expected losses on one disposed asset.

Michael McMinn has been named national broker sales executive of Thornburg Mortgage Inc.'s recently developed broker origination channel.Thornburg, based in Santa Fe, N.M., said Mr. McMinn will head the national expansion effort of its broker sales network. Joseph Badal, Thornburg's senior executive vice president, said the wholesale channel "has significant growth implications" for the company. Mr. McMinn was most recently vice president for wholesale mortgage lending in Wells Fargo's Western Region, and he has more than 25 years of experience in the mortgage industry, Thornburg said. Thornburg Mortgage, a real estate investment trust that focuses mainly on the jumbo segment of the adjustable-rate mortgage market, can be found online at http://www.thornburg.com.

The Department of Housing and Urban Development will sponsor a homeownership "security" conference May 14 offering industry officials advice on working with troubled borrowers who might be in danger of foreclosure.Speakers include: Richard Price, vice president of subprime servicer EMC Mortgage; Robin Stout Magala, senior delinquency resolution manager for Freddie Mac; and Federal Housing Commissioner Brian Montgomery, among others. (EMC is owned by Wall Street firm Bear Stearns & Co., which has been enforcing buyback agreements on lenders.) The conference, which starts at 9 a.m., will be held in Washington.

Thanks to a strong refinancing market, Countrywide Home Loans originated $40.4 billion of home mortgages in April, an 11% gain from its volume in the same month last year.However, its nonprime fundings plunged by 48% to just $1.68 billion. The company released its April results on May 9, a day after its stock ran up 7.2% on takeover rumors. Countrywide's policy is not to comment on takeover talk, but investment banking sources familiar with the company told MortgageWire that they do not think the firm is in play. In April, refinancings accounted for 61% of its production, compared with 54% for the same month last year. About 0.69% of all the loans Countrywide services ($1.4 trillion) are in some form of foreclosure. The company can be found online at http://www.countrywide.com.

The National Association of Realtors has lowered its forecast for home sales this year, citing the effects of stricter lending standards and a decline in subprime mortgage origination.The NAR, which was predicting 2007 existing-home sales of 6.42 million earlier this year, is now forecasting resales of 6.29 million. (Resales totaled 6.48 million in 2006.) NAR senior economist Lawrence Yun said new-home sales are now projected to reach a level of 864,000, down from the 1.06 million recorded last year. Housing starts are forecast to total 1.46 million, down from 1.80 million in 2006. "If it weren't for a favorable economic backdrop, housing would probably have a hard landing," Mr. Yun said. "As it is, we see this as a soft landing, with home sales rising gradually in the second half of the year and prices recovering a bit later." The association can be found on the Web at http://www.realtor.org.

Six classes of Fremont Home Loan Trust's residential mortgage-backed certificates, series 2006-B pool 2, have been downgraded by Fitch Ratings.The downgrades were as follows: class SL-M5, from A-plus to BBB-minus; class SL-M6, from A to BB-minus; class SL-M7, from A-minus to B; class SL-M8, from BBB-plus to C/DR6; class SL-M9, from BBB-plus to C/DR6; and class SL-B1, from BBB to C/DR6. Classes SL-M5, SL-M6, and SL-M7 were placed on Rating Watch Negative, as were classes SL-M3 and SL-M4 of pool 2, classes M-9, M-10, and M-11 of pool 1, and class M-6 of series 2003-B. Fitch also upgraded four classes from the Fremont deals and affirmed the ratings on 18 classes in the subprime transactions. The downgrades were attributed to deterioration in the relationship between credit enhancement and expected losses.

Thirteen classes of GS Mortgage Securities Corp. residential mortgage pass-through certificates from four GSAMP transactions have been downgraded by Fitch Ratings.Fitch also placed 11 classes on Rating Watch Negative, assigned Distressed Recovery ratings to five classes, and affirmed the ratings on 16 other classes in the transactions. The negative rating actions were attributed to faster-than-expected prepayments and earlier-than-expected collateral losses for series 2005-S1 and 2005-S2; losses that have exceeded excess spread for the past eight months for series 2006-S1; and losses that have exceeded excess spread for three of the past four months for series 2006-S2. The deals consist of closed-end fixed-rate mortgage loans secured by second liens on residential properties.

Family Lending Services Inc., the mortgage banking arm of Standard Pacific Corp., a homebuilder based in Irvine, Calif., has changed its name to Standard Pacific Mortgage Inc.Richard Ambrose, president of Standard Pacific Mortgage, said the name change will "create a stronger link" with the parent company. "Although we are changing our name, we are not changing our culture and values of providing Standard Pacific consumers a streamlined homebuying process," he said. The parent company, which provides mortgage financing and title services via subsidiaries and joint ventures, can be found online at http://www.standardpacifichomes.com.