Originations

TMSF Holdings, Los Angeles, has officially terminated its agreement to acquire certain wholesale assets of the now-defunct Central Pacific Mortgage, Folsom, Calif., due to what it calls "adverse market conditions."A nondepository, CPM closed its doors recently, as did its Florida affiliate, Ivanhoe Mortgage, a $2 billion-a-year funder. TMSF chief financial officer Daniel Rood told MortgageWire that CPM "went bust three days before the deal was supposed to close." Industry sources told MW that CPM, a mostly prime and alternative-A lender, had buyback requests it could not meet. "They were forced to close because of their warehouse lender," said one adviser, requesting anonymity. TMSF Holdings is a financial holding company that owns The Mortgage Store Financial, a nationwide mortgage banking firm. TMSF can be found online at http://www.tmsfholdings.com.

Amid the meltdown in the subprime sector, insiders at Countrywide Financial Corp. -- including chairman and chief executive Angelo Mozilo -- have sold 7.8 million shares over the past six months, according to figures compiled by Thomson Financial.Based on an average share price of $37, that means insiders -- officers and directors alike -- have unloaded $288 million worth of stock. Since March 1, Mr. Mozilo has exercised options, selling 186,000 shares at a market price of $6.77 million. According to the Quarterly Data Report, Countrywide is the nation's largest subprime servicer, and third-largest funder. Countrywide recently disclosed that $22 billion, or 19%, of its subprime receivables are in some form of delinquency. Its shares now trade at $4 above its 52-week low. Its high is $45.

ECC Capital Corp., the Irvine, Calif.-based real estate investment trust that sold its production operations to Bear Stearns, has been notified by the New York Stock Exchange that it has fallen below the exchange's continued listing standard related to minimum share price.The NYSE requires firms to have a minimum average closing price of $1 per share during a 30-day period. According to Yahoo! Finance, the last time ECC shares closed above $1 was on Jan. 29. The next day the company issued a $0.24 dividend. The last time ECC even traded at $1 was on Feb. 7. The sale of Encore Credit Corp. closed on Feb. 9, with ECC keeping a mortgage investment portfolio. Since that day shares have drifted further downward, closing at $0.75 on March 5. ECC has 10 business days to submit a plan to the NYSE showing how it intends to regain compliance and meet the standards within six months. ECC said it intends to continue to communicate with NYSE regarding compliance.

Home prices increased at an annualized rate of 4.9% nationwide in the fourth quarter, up from a revised rate of 4.4% in the third quarter, according to the Conventional Mortgage Home Price Index released by Freddie Mac.The Mountain states recorded the biggest price increases, with an 8.0% annualized growth rate, Freddie Mac said. The South Atlantic states of Delaware, Florida, Georgia, Maryland, North and South Carolina, Virginia, and West Virginia, plus the District of Columbia, experienced the second-highest annualized gains in the fourth quarter, with a 7.7% growth rate, and the West South Central states of Arkansas, Louisiana, Oklahoma, and Texas came in third, at 6.3%. "Home values grew 6.1% during 2006, down from the year-over-year growth rate of 8.0% that we saw in the third quarter, and less than half the rate of appreciation of 13.3% that we enjoyed in 2005," said Frank Nothaft, Freddie Mac's chief economist. "The CMHPI tends to lag other indicators of home-value change because some of the information is based on appraisal data, which can be based on home sales prices a few months earlier." The index was jointly developed by Freddie Mac and Fannie Mae. Freddie Mac's website address is http://www.freddiemac.com.

Meanwhile, Ruth's Chris Steak House will replace New Century Financial on the S&P SmallCap 600 index after the close of trading March 7, Standard & Poor's has announced.S&P said New Century, whose share price dived 70% on March 5, had fallen below the $300 million minimum market capitalization required for listing on the index. As of the close of trading on March 5, New Century's capitalization stood at approximately $253 million, S&P reported. S&P can be found online at http://www.standardandpoors.com.

Ailing subprime giant New Century Financial Corp., Irvine, Calif., "is running on fumes" and could file for bankruptcy protection if just one or two of its warehouse lenders force margin calls on the nondepository, according to a new research report by JPMorgan.At deadline time, a New Century spokeswoman declined to comment. JPMorgan also predicts that the company's board will fire "a number of senior executives," noting that its only hope for survival is to partner with a larger financial institution. In trading Monday, New Century's share price skidded by a stunning 70%, closing at $4.44. Meanwhile, the company is being hit with a new round of class action lawsuits filed on behalf of shareholders who have seen the value of their holdings decimated over the past month.

Domestic Bank of Rhode Island closed its wholesale division Monday, citing Wall Street's reluctance to bid any higher than 97 on certain nonconforming loan types it specialized in.A bank memo provided to MortgageWire reports that, "The major Wall Street firms and other national conduits that bid on our products effectively took down all of their product matrices or offerings this week therefore making our ability to accumulate a profitable product type virtually impossible." It adds that the market "took a drastic turn for the worse on March 1st and has left virtually no-bid for any doc type other that full or stated under [a 90% loan-to-value ratio]. Combo seconds are no longer a viable product type either." At deadline time the bank had not returned telephone calls about the matter. The memo, penned by Jeff Moore, a managing director at the bank, adds: "This is one of the worst liquidity crises for the mortgage industry in decades."

Citadel Investment Group LLC, a hedge fund, has agreed to buy the assets of bankrupt subprime wholesaler ResMae Mortgage for $180 million, beating out Credit Suisse, which earlier said it had a deal for the lender.Among subprime wholesalers, ResMae of Brea, Calif., ranked 14th nationwide, according to the Quarterly Data Report, a National Mortgage News publication. The privately held ResMae filed for Chapter 11 bankruptcy protection in February, leaving behind a long trail of Wall Street creditors including Merrill Lynch, which had a $308 million buyback dispute with the company. Citadel's bid includes $20 million for ResMae's lending operation and 98.5 cents on the dollar for the wholesaler's $160 million loan portfolio. At deadline time, Credit Suisse could not be reached for comment. ResMAE can be found on the Web at http://www.resmae.com.

Countrywide Financial Corp., Calabasas, Calif., has announced that it has received formal approval from the Office of Thrift Supervision to convert its national bank charter to a federal savings bank (or thrift) charter.The company said Countrywide Bank NA will begin operating as a thrift on March 12, and Countrywide Financial Corp. will become a savings-and-loan holding company, with the OTS as the regulator of both entities. "The conversion to a savings bank charter aligns the regulatory supervision of the company with our strategic objectives, and will help us better leverage our real-estate-finance-focused business model for competitive advantage in the current marketplace," said Angelo R. Mozilo, Countrywide's chairman and chief executive officer. The company can be found online at http://www.countrywide.com.

General Motors may need to contribute up to $945 million to cover delinquent mortgages made by the lending affiliates of General Motors Acceptance Corp., according to a new report by Lehman Brothers.Late last year, GM sold a controlling stake (51%) in GMAC to Cerberus Capital Management for $14.4 billion. A new Lehman report penned by analyst Brian Johnson says GM may need to make a cash contribution of $900 million to $945 million to cover loan losses at GMAC. Originally, Lehman had forecast that GM would take an additional $400 million hit on GMAC. GM and GMAC have yet to release fourth-quarter results. According to estimates made by the Quarterly Data Report, GMAC-RFC -- a correspondent buyer of mortgages -- acquired $21.7 billion in subprime loans in 2006, while its wholesale arm, Homecomings, table-funded $1.9 billion. GMAC-RFC is also the nation's second-largest warehouse provider, with lines of credit extended to several subprime funders.

Hospitality Properties Trust, Newton, Mass., has announced the pricing of $500 million of 3.80% convertible senior notes due in 2027.The real estate investment trust said the offering will include an option to the initial purchasers to acquire up to an additional $75 million in principal amount of the notes to cover any overallotments. HPT said it expects to use the net proceeds of the offering to repay a portion of the debt incurred to fund its recently completed acquisition of TravelCenters of America. Prior to March 15, 2026, the notes will be convertible, at the holder's option and upon the occurrence of certain events, into shares of HPT stock at $50.50 per share, which represents a 15.8% premium on the closing price of HPT's stock on March 1, the REIT reported. The hotel REIT can be found on the Internet at http://www.hptreit.com.

Brokerage firm Stifel Nicolaus has downgraded subprime lender Accredited Home Lenders, San Diego, from "hold" to "sell."The downgrade came a few days after the publicly traded Accredited said it will delay its annual 10-K filing with the Securities and Exchange Commission, adding that income for 2006 will likely be $100 million less than in 2005, when it earned $155 million. Accredited, a nondepository, said the delay in filing its annual 10-K is caused by its purchase of Aames Financial, another subprime lender. The integration of Aames into Accredited has slowed the company's reporting, it told the SEC. According to the Quarterly Data Report, Accredited is the nation's 13th-largest subprime funder. In trading Monday, Accredited's share price was down 20%.

Fremont General Corp., Santa Monica, Calif., is in discussions to sell its subprime division -- one of the largest in the nation -- after agreeing to a cease-and-desist order with the Federal Deposit Insurance Corp.The news broke late March 2. In trading Monday morning its share price was once again spiraling downward. The company said it will remain a commercial real estate lender and will continue to gather deposits. (FGC is the parent of an industrial loan company and subprime wholesaler called Fremont Investment & Loan.) In a filing with the Securities and Exchange Commission, FGC says it is exiting the subprime arena in light of "recent regulatory events, as well as changing competitive dynamics in the sub-prime market." The C&D order from the FDIC says FI&L will cease and desist from a long list of activities, including "Operating with a large volume of poor quality loans." According to the Quarterly Data Report, the company ranks seventh among subprime funders and 14th among servicers. After the SEC filing, Fitch Ratings downgraded Fremont General's long-term issuer default rating from B-plus to CCC, its short-term issuer rating from B to C, and its long-term senior debt from B to CC.

New Century Financial Corp., Irvine, Calif., disclosed late March 2 that it is the focus of a criminal probe by the U.S. attorney's office in central California regarding trading in the company's securities and errors tied to its accounting for loan repurchases.In trading Monday morning, its share price was down 60% to just over $6. (Its 52-week high is $51.97.) In a filing with the Securities and Exchange Commission, the nation's second-largest subprime funder said it expects to violate certain warehouse lending covenants stipulating that it must earn a profit for a minimum of two consecutive quarters. New Century notes that lenders on six of its 11 warehouse agreements have executed waivers. The company says it currently has $13 billion in committed lending facilities and $4.4 billion in uncommitted borrowing capacity. Over the past six months, company insiders have sold 796,445 shares while buying none, according to Thomson Financial. New Century recently cut 300 jobs, or about 4% of its work force, including 124 positions in Orange County.

AMB Property Corp., San Francisco, has announced the pricing of 8.0 million shares of its common stock at $58.78 per share.The company said it has granted the underwriters an option to buy up to 1.2 million additional shares to cover any overallotments. The joint bookrunners for the offering are Banc of America Securities, J.P. Morgan Securities, and Morgan Stanley & Co. AMB, an owner and operator of industrial real estate, can be found online at http://www.amb.com.

The percentage of first-time buyers in California able to afford an entry-level home stood at 25% in the fourth quarter of 2006, compared with 24% in the third quarter and 27% for the same period a year ago, according to the California Association of Realtors.The minimum household income needed to purchase an entry-level home at $477,400 in California was $96,760 in the fourth quarter, based on an adjustable interest rate of 6.36% and assuming a 10% downpayment, according to CAR's First-time Buyer Housing Affordability Index. (First-time buyers typically purchase a home equal to 85% of the prevailing median price.) The monthly payment, including taxes and insurance, stood at $3,230. At 41%, the High Desert and Sacramento regions were the most affordable regions in the state, and Santa Barbara and Los Angeles were the least affordable, at 19%. CAR can be found on the Web at http://www.car.org.

Zacks Equity Research, Chicago, announced March 2 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 focusing on development that "could prove beneficial down the road" but that won't add to near-term earnings. "We expect continued earnings dilution," with "little to zero" growth in funds from operations in 2007, Zacks said. "We find this troubling, as office and industrial real estate fundamentals continue to improve across the country," the research firm said. Zacks can be found online at http://www.zacks.com, and Liberty Property Trust can be found at http://www.libertyproperty.com.

The Eleventh Federal Home Loan District Cost of Funds Index barely moved in January.The Federal Home Loan Bank of San Francisco has calculated the January COFI at 4.392%, virtually unchanged from December's 4.396%. The monthly results for the Freddie Mac Primary Mortgage Market Survey of the one-year adjustable-rate mortgage show the average rate rising 2 basis points in January and another 4 bps in February. Looking at the weekly results for March 1, the average for the one-year ARM stood at 5.49%, the same level it has recorded for four of the last six weeks, dating back to Jan. 25.

Crescent Real Estate Equities Co., Fort Worth, Texas, has announced that it plans to simplify its business model and become a "pure play" office real estate investment trust.Elements of the plan include the sale of all resort and hotel assets, the sale of resort residential developments, and the opportunistic sale of office properties, Crescent said. Other elements include a reduction of general and administrative expenses by more than $17 million and the use of sale proceeds to retire debt. "By becoming a pure-play office REIT, we will have a simpler business model with a higher-quality earnings stream that will be easier to understand and to value," said John C. Goff, Crescent's vice chairman and chief executive officer. The REIT also announced that Jerry R. Crenshaw Jr., the company's chief financial officer, intends to resign as part of the simplification of the business model, at which time Jane E. Mody, managing director of capital markets, will be given the additional title of CFO. The company can be found online at http://www.crescent.com.

Subprime giant New Century Financial Corp., Irvine, Calif., says it expects to tell the Securities and Exchange Commission that it will delay the filing of its annual 10-K report for the year ending Dec. 31.A few weeks ago, the publicly traded nondepository said it would report a loss for the fourth quarter and restate earnings for the previous three quarters. According to the Quarterly Data Report, New Century ranked second among all subprime originators in the fourth quarter, funding $12.2 billion in loans, an 8% decline from the level of the fourth quarter of 2005. HSBC Finance, Prospect Heights, Ill., ranked first, with $12.2 million.