Originations

Anglo Irish Bank's Boston and Chicago representative offices have hired two senior vice presidents in the commercial real estate lending area.Richard Muraida will be responsible for originating loans in the Boston market and will report to Eddie Bryne, executive vice president and head of lending, the bank reported. Michael Goorvich will be senior vice president of commercial real estate lending for the Chicago representative office. Both have over 25 years' experience in the commercial real estate finance area, according to Anglo Irish Bank. Most recently, Mr. Goorvich was with Capmark Finance and Mr. Muraida was with Eastern Bank in Boston.

Bill Templeton, a former president of The Money Store who was a pioneer in developing the subprime sector, has been named chief operating officer of Liberty American Mortgage, Roseville, Calif.At The Money Store, Mr. Templeton managed a financial services company with $14 billion in assets and 150 U.S. branches in 47 states, Liberty American said. He participated in the $2.2 billion sale of the company to First Union Bank in 1998, remaining as president and chief executive officer of the Money Store subsidiary of First Union for a year after the sale. Liberty American CEO Patrick White said the company plans to expand further into the alternative-A market.

IndyMac Bancorp Inc., Pasadena, Calif., the holding company for IndyMac Bank, has reported record net earnings of $343 million ($4.82 per share) for 2006, up 17% from profits recorded in 2005.Mortgage loan production totaled a record $90 billion, up 48% from the volume recorded the year before, IndyMac said. For the fourth quarter, the company reported net earnings of $72 million, compared with net earnings of $70 million in the fourth quarter of 2005. Earnings per share amounted to $0.97, down 8%, IndyMac said. Mortgage loan production totaled a record $26 billion for the quarter, up 44% from that of a year earlier. Michael W. Perry, IndyMac's chief executive officer, said the company's management is "clearly disappointed with these results because they were considerably below our normal earnings growth." However, Mr. Perry said the company "maintained reasonable and prudent credit quality in our mortgage loan production," adding that subprime loans represented only 3% of fourth-quarter production. The company can be found online at http://www.indymacbank.com.

New-home sales jumped 4.8% in December after a 7.4% rebound in November, but builders still experienced a 17.3% drop in sales last year -- the largest drop in 16 years.The U.S. Census Bureau reported that the sales of new single-family homes rose from a seasonally adjusted annual rate of 1.07 million in November to 1.12 million in December. "I think the market has reached a floor," Wells Fargo Bank senior economist Eugenio Aleman said, adding that he expects home sales to stabilize at current levels. "My biggest concern is that the Federal Reserve might have to raise interest rates, which could push mortgage interest rates higher. That is the biggest risk," he said, which could push home sales a bit lower and make it difficult for homeowners to refinance and increase foreclosures. The Census Bureau reported that inventory of unsold new homes edged down to a 5.9-month support level in December, the lowest level since last January. However, builders' inventories are "still very high," the Wells Fargo economist said, and that will "keep the new construction market weak for the rest of the year."

Four classes of Ace Securities Corp. mortgage-backed securities have been downgraded by Fitch Ratings, and three classes have been placed on Rating Watch Negative.The downgrades were as follows: series 2002-HE3, class M-2, from A to BBB (and removed from Rating Watch Negative), and class M-3, from BB to B; and series 2004-HE1, class M-5, from BB to B-plus, and class M-6, from BB-minus to B. The securities placed on rating watch were class B-2 of series 2005-HE2, class B-2 of series 2005-HE3, and class B-1 of series 2005-RM2. In addition, the rating agency affirmed the ratings on 55 other classes from six transactions. Fitch said the negative rating actions were taken because monthly losses have generally exceeded the available excess spread in recent months, causing a deterioration in the amount of overcollateralization. The rating agency can be found on the Web at http://www.fitchratings.com.

Slowing home price appreciation and decreased affordability have boosted the risk of home price declines in the nation's 50 largest housing markets, according to PMI Mortgage Insurance Co., Walnut Creek, Calif.The average score in the PMI U.S. Market Risk Index rose from 328 to 342 in the fourth quarter, the company reported. This means the company's estimate of the probability of experiencing a home price decline in the next two years has risen from 32.8% to 34.2% in the 50 largest metropolitan statistical areas. According to the index, there are now 19 markets with a greater than 50% chance of price declines over two years, up from 18 in the third quarter. "Years of rapid appreciation have made homes less affordable in many areas, and that's not sustainable over the long term, so that what we are seeing is not unexpected," said Mark F. Milner, chief risk officer of PMI Mortgage Insurance. "Over time, moderating appreciation will bring prices back in line with economic fundamentals, particularly incomes, bringing the market back to a healthy balance." PMI can be found online at http://www.pmigroup.com.

Bank of America says it is getting an encouraging response to the "no-fee mortgage" that it started offering to bank customers in the state of Washington back in September."We're currently in the pilot program stage," BoA chief financial officer Joe Price said during a teleconference on the bank's fourth-quarter earnings. "Customer reaction so far has been pretty good, but we're at the stage of evaluation to see where it leads." Under the pilot program, the prime mortgage lender waives all application and origination fees. It also pays all third-party fees and even private mortgage insurance, if necessary. "There is no defined time line for expanding it" to other states, a company spokesman said.

Global real estate investors are planning to include higher-risk properties in their U.S. real estate acquisitions in 2007, according to the Association of Foreign Investors in Real Estate, Washington, D.C.About 30% of the respondents to the AFIRE survey said they would consider new property types as part of their U.S. investment strategy, including infrastructure, resorts, housing for senior citizens, storage, student housing, research and science projects, and the acquisition of real estate companies. "The findings reflect investors' desire to invest in U.S. real estate despite macro uncertainties and competition from U.S. institutional investors," said François Ortalo-Magne, who holds the Robert E. Wangard Chair in Real Estate at the University of Wisconsin's Center for Real Estate. "Consequently, they are showing a greater willingness to consider diversification strategies into secondary markets, outside of the core property types, and with creative financing and ownership structures." Respondents identified New York, Washington, Los Angeles, San Francisco, and Seattle as the most attractive cities for real estate investments.

Following the emergence of a competing bid for Equity Office Properties Trust from New York-based Vornado Realty Trust and its partners, The Blackstone Group has raised its offer to $54 per share in cash.This would value the transaction, including the assumption of debt, at about $38.3 billion, the Chicago-based real estate investment trust reported. The revised Blackstone offer represents an increase of over 11% from the real estate investment firm's previous offer of $48.50 per share and is also higher than the $52 per share offered by the Vornado partnership (which includes Starwood Capital Group and Walton Street Capital). In addition, Blackstone has negotiated a termination fee of $500 million, up from $200 million, if Equity Office decides to back off from the Blackstone proposal and pursue another offer. The Equity Office board continues to recommend the Blackstone proposal, the REIT reported, and Equity Office shareholders are scheduled to vote Feb. 5 on the deal. The REIT can be found online at http://www.equityoffice.com.

The average 30-year fixed mortgage rate rose from 6.23% to 6.25% over the seven-day period ended Jan. 25, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate was unchanged at 5.98%, the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages declined from 6.04% to 6.00%, and the average rate for one-year Treasury-indexed ARMs decreased from 5.51% to 5.49%, 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. "Mortgage rates were mixed this week on news that December's leading indicators, a measure of future economic activity, signaled steady growth in the coming months," said Frank Nothaft, Freddie Mac's chief economist. "And in the housing market, December's new construction came in stronger than expected despite a decline in one-unit residence starts." A year ago, the average 30-year and 15-year fixed rates were 6.12% and 5.70%, respectively, and the average hybrid and one-year ARM rates were 5.75% and 5.20%, respectively, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

Millennium Bankshares Corp., Reston, Va., has announced that it is winding down its mortgage operating subsidiaries and will take any related one-time charges in its fourth-quarter results for 2006.The company said it has not yet determined the amount of wind-down costs, and will delay its year-end earnings announcement until the amount of the one-time charges can be determined. "Although the mortgage banking business was profitable under the restructuring which took place in September 2005, management determined that it was in the company's best interest to focus its efforts solely on core banking strategies," said Carroll C. Markley, Millennium's chief executive officer. "We were concerned about future volatility in earnings as a result of the soft housing market and wanted to eliminate ... the risks normally associated with mortgage banking activities." The company can be found online at http://www.millenniumbank.com.

Mandalay Mortgage, Woodland Hills, Calif., a top-30-ranked subprime wholesale originator, is closing its doors at the end of the month and will stop funding loans, sources familiar with the situation have told MortgageWire.At deadline time, company officials had not returned telephone calls about the matter. A source close to the situation said the company "will fund out everything" it has "in the system." One executive said Mandalay sent out e-mail messages informing employees about the closing on Wednesday evening. Mandalay is the eighth nonprime lender of note to fail within the past 60 days. (For more details, see the Jan. 29 issue of National Mortgage News.)

Sales of existing single-family homes slipped 1.3% in December and fell by 8.1% for the year (the biggest annual drop since 1989), but 2006 was still the third-best year in terms of sales, according to the National Association of Realtors.The NAR reported that December sales of previously owned single-family homes fell from a seasonally adjusted annual rate of 5.51 million in November to 5.44 million in December. The median single-family home price rose 2.3% in December to $221,600, after declining for three months. For the year, the median price was up 1.1%. However, prices were down 4% since July, when the median price peaked at $230,900. NAR chief economist David Lereah said the "good news" is that the inventory of existing single-family homes, condominiums, and cooperatives fell to a 6.8-month supply, down from a 7.3-month supply in November, and most of the housing market indicators are "favorable." He said most speculators have left the market, and prime homebuyers are coming back in "because they understand it is a buyer's market." Sales of existing condos and co-ops rose 2.1% in December to a seasonally adjusted rate of 770,000 units. Sales are off 8.1% from the level recorded in 2005 and prices are up 0.3%. [Editor's note: The accompanying chart excludes resales of condos and co-ops.] The NAR economist is predicting that overall resales will decline 1.2% in 2007 and prices will edge up 1.4%.

The issuer default rating and senior unsecured notes ratings of Reckson Operating Partnership LP have been downgraded from BBB-minus to BB-plus by Fitch Ratings in view of the pending merger of SL Green Realty Corp. with Reckson Associates Realty Corp.The ratings remain on Rating Watch Negative. Fitch attributed the actions to several factors. "After the merger, giving effect to the sale of Reckson Associates Realty Corp.'s Long Island and New Jersey office properties to an investor group that includes Reckson senior management, Reckson OP's pro forma EBITDA [earnings before interest, taxes, depreciation, and amortization] coverages decline significantly," the rating agency said. "The assets acquired by the investor group are almost entirely unencumbered, reducing the remaining unencumbered asset support of unsecured debt at Reckson OP." In addition, the company's liquidity and financial flexibility will weaken due to the retirement of its unsecured revolving credit facility, Fitch said. The rating agency can be found online at http://www.fitchratings.com.

Thornburg Mortgage Inc., Santa Fe, N.M., has reported net income (before preferred stock dividends) of $297.7 million ($2.58 per share) for 2006, compared with $282.8 million ($2.79 per share) a year earlier.Thornburg said it originated $5.6 billion in mortgage loans during the year, up 13% from the level recorded in 2005. Larry Goldstone, Thornburg's president and chief operating officer, attributed the company's success to its operating model, "disciplined" interest rate risk management, and a strong capital position. "By successfully executing a number of financing and alternative capital-raising transactions, we strengthened our balance sheet and sustained our earnings in an environment where our core spread-lending business was impacted by competitive market and interest rate pressures." The company also touted its new wholesale channel, which it said now supports more than 200 brokerage firms. 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 Market Composite Index, an overall measure of mortgage applications, fell from 667.2 to 611.3 on a seasonally adjusted basis during the week ended Jan. 19, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications decreased 5.7% on the week but were up 3.8% from the level recorded a year earlier. The Purchase Index fell from 439.7 to 402.7 on a seasonally adjusted basis, while the Refinance Index fell from 2045.8 to 1848.8. Refinancings represented 47.8% of total applications, down from 49.9% the previous week, while adjustable-rate mortgages accounted for 20.3%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages rose from 6.19% to 6.22%, and points (including the origination fee) fell from 0.98 to 0.97 for loans with 80% loan-to-value ratios, the association reported. The MBA can be found online at http://www.mortgagebankers.org.

First Financial Bancorp, Hamilton, Ohio, has announced a strategic partnership with PHH Mortgage, a provider of private-label mortgage services and a subsidiary of PHH Corp., Mt. Laurel, N.J.Under the arrangement, PHH Mortgage will provide First Financial with mortgage loan processing, servicing, secondary-market functions, and other mortgage-related loan origination services for new loans, First Financial said. The company said the partnership will offer its clients a greater variety of mortgage products, faster approvals, reduced documentation requirements for most loans, and 24-hour access to the status of their loan applications. "Partnering with PHH gives us a new mortgage loan operating model with more channels for originating loans, freedom to use our name to create brand equity with our clients, and greater access to technology, products, competitive pricing, and world-class client service," said Claude E. Davis, president and chief executive officer of First Financial. The company can be found online at http://www.ffbc-oh.com.

Friedman, Billings, Ramsey Group, Arlington, Va., has announced a partnership with former Washington, D.C. Mayor Anthony A. Williams to create a real estate company focused on serving the government and nonprofit markets.The company, Public Properties Realty Investment Trust, will initially operate as a wholly owned subsidiary of FBR, but FBR said it expects the trust to raise additional third-party capital and eventually to qualify as a real estate investment trust. The company "will allow any government, quasi-governmental organization, or not-for-profit entity -- including those with limited sources of funding, borrowing limits, and other constraints -- to unlock the embedded value within its real estate," Mr. Williams said. "Public Property Trust will provide alternative funding that can revitalize neighborhoods, fund new educational facilities, finance large-scale mixed-use projects, or support ongoing operations." FBR can be found online at http://www.fbr.com, and the new company can be found at http://www.publicpropertytrust.com.

Wireless Capital Partners, Santa Monica, Calif., a company that provides real estate services for cellular real estate landlords, has formed WCP Commercial Lending, a company that will make loans to commercial real estate properties with a cellular lease income component.Properties that the lender will target include multifamily housing, offices, light industrial, retail, mobile home parks, and churches, WCP said. "We have long recognized that most lenders either ignore cellular lease income entirely or severely discount it, so we started offering loan products to this underserved segment of real estate owners," said Brad Knyal, chief executive officer and president of WCP. Brian Weiner, who has been named director of commercial lending, told MortgageWire that WCP sees an opportunity to provide hybrid solutions for cell tower owners. The company said it plans to make loans of up to $20 million and will initially broker the loans to other financial institutions. Ultimately, the company, which has a pipeline of about $60 million worth of loans, plans to securitize the loans.

An unnamed investor that may pump money into the struggling Mortgage Lenders Network of Connecticut cannot do so for four to six weeks, according to a company e-mail message provided to MortgageWire.The message, written to laid-off employees by MLN vice president of human resources Gary Porter, reports that the nondepository took what it calls a "viable business plan" to its current investors and lenders, "two of whom surprised us by passing on it because of some short-term cash requirements." As for the "new investor" whose identity is undisclosed, Mr. Porter says, "We and the new investor remain committed to building a wholesale platform." As reported in MW Jan. 23, MLN sent official layoff notices this past weekend to 832 workers that had been on furlough. (The official termination date for the workers is Jan. 19.) The nondepository now employs 960, compared with 1,800 in early December before it shuttered its entire wholesale network (which accounts for 90% of its originations). In the e-mail message, Mr. Porter tells the laid-off workers that once its investor is on board, "we hope you consider rejoining us." MLN can be found on the Web at http://www.mlnapproves.com.