Originations

Four classes of Salomon Brothers Mortgage Securities VII Inc. asset-backed pass-through certificates, series 2002-CIT1, have been downgraded by Fitch Ratings.The downgrades were as follows: class M-2, from A to BBB-plus; class M-3, from A-minus to BBB; class M-4, from BBB to BB; and class M-5, from BBB-minus to BB-minus. Fitch also affirmed the ratings on two other classes in the deal. The downgrades were attributed to a deterioration in the relationship between credit enhancement and loss expectations.

Six classes from three Ameriquest Mortgage Securities Inc. and Argent Securities Inc. home equity issues have been downgraded by Fitch Ratings.The downgrades were as follows: AMSI series 2003-8, class M-5, from BBB to BB, and class M6, from BBB-minus to BB-minus; AMSI series 2004-R3, class M-6, from BBB-minus to BB-plus, and class M7, from BB-plus to BB; and ARSI series 2004-PW1, class M-10, from B-plus to B, and class M-11, from B to CC/DR2. The rating agency also placed classes M2, M3, and M4 of AMSI series 2003-8 on Rating Watch Negative. In addition, Fitch affirmed the ratings on 18 classes from the three deals. The downgrades were attributed to monthly losses that have generally exceeded excess spread and caused a deterioration in the amount of overcollateralization. Fitch can be found online at http://www.fitchratings.com.

Senior Housing Properties Trust, a real estate investment trust based in Newton, Mass., has priced a follow-on public offering of 5.0 million common shares of beneficial interest at $22.06 per share.The joint book-running managers of the offering are UBS Investment Bank and Merrill Lynch & Co. The REIT said it has granted the underwriters an option to buy up to 750,000 additional shares to cover any overallotments. The company can be found online at http://www.snhreit.com.

The Hispanic National Mortgage Association has announced the launch of HAUS, the first automated mortgage underwriting system that is calibrated to make credit decisions using the nontraditional characteristics prevalent in Hispanic and other immigrant communities.The association said the new system will enable mainstream lenders to expand their market share within these rapidly expanding customer segments and to sell their loans automatically to the HNMA's new correspondent lending company. "Underwriting loans for Hispanic, immigrant, and other nontraditional borrowers has historically been a manual, labor-intensive process," said Leonardo Simpser, managing director of the HNMA. " .... HAUS gives lenders a turnkey, automated solution to this problem and gives them access to customized loan programs and additional liquidity." HAUS takes into consideration more data than traditional AU systems in order to get a better picture of the true creditworthiness of Hispanic and immigrant borrowers, the association said.

As part of a general session at the Western Regional Mortgage Brokers Conference in Las Vegas, a senior economist at the National Center for Policy Analysis spoke hopefully about a return of business expansion and volume increases in the near future.Barry Asmus pointed to good demographics and population growth as a positive factor for future industry health and well being. Currently, 75 million people in the United States are between the ages of 40 and 60, and there is a large number of people right below that age group as well, Mr. Asmus said. He compared this to the situation in Western Europe, where population is decreasing, and predicted that the U.S. population will grow by 60 million people in the next 25 years. He also maintained that there is no sign of inflation on the horizon, which he said is a good indicator that there will be an opportunity for business growth in the near future.

Webster Financial Corp., Waterbury, Conn., has announced that it is undertaking a balance sheet restructuring that will include the sale of $250 million of residential mortgage loans.The proceeds of the sale will be used to pay down $250 million in short-term borrowings. Webster said it expects to take a pretax loss of $7.0 million on the sale, which will be recognized in the fourth quarter. This sale is in addition to the sale of its $1.9 billion held-for-sale portfolio of mortgage-backed securities, which was announced in its third-quarter earnings report. At that time, the company said it expected to have a pretax loss on the sale of $6.0 billion in the fourth quarter. The actual loss was $2.4 billion, the company reported. Webster also announced that it is securitizing $1 billion of residential mortgage loans into the held-to-maturity securities portfolio, primarily for collateral purposes. The company can be found on the Web at http://www.websteronline.com.

New York-based iStar Financial Inc., a commercial real estate finance company, has announced the pricing of 11 million shares of its common stock at $44.50 per share.The net proceeds of the offering are expected to be approximately $471.1 million. The joint book-running managers for the offering were Bear Stearns, Citigroup Corporate and Investment Banking, and Lehman Brothers. The company can be found online at http://www.istarfinancial.com.

Europe's first commercial real estate collateralized debt obligation deal appears "imminent," according to a Commercial Mortgage Securities Association executive's report from the recent CMSA European conference in Rome.Despite the collateral sourcing and prepayment-related challenges that the European CRE CDO market faces, a deal will likely be done before the end of the year, CMSA-Europe chairman Ronan Fox told MortgageWire. The CMSA-Europe chairman, a director in the London office of the Standard & Poor's structured finance group, said he could not disclose any more information about the pending transaction.

The sales of existing homes are expected to hold steady in 2007, although new-home sales are likely to fall another 8.7% next year, according to the National Association of Realtors.The association's latest forecast, released Nov. 10 at the NAR Conference & Expo in New Orleans, calls for resales to total 6.47 million this year, an 8.6% decline, and to hold steady next year around 6.43 million, a less than 1% decline. New-home sales are forecast to fall to 1.07 million this year, a 16.8% drop, and to 975,000 in 2007, an 8.7% decline. Overall home price gains are expected to be modest, with median resale prices rising an estimated 1.9% this year and a forecast 1.7% next year, according to the NAR. The association can be found online at http://www.realtor.org.

Lehman Brothers has hired First Franklin Financial Corp. executive Steve Skolnik to run its BNC Mortgage affiliate, MortgageWire has learned.A spokesman for Lehman Brothers confirmed the news, which was first reported by National Mortgage News. The spokesman also said BNC's current chief executive officer, Kelly Monahan, will remain with the company but "will have other duties" at Lehman. A spokesman for National City Corp., Cleveland, which owns First Franklin, confirmed that Mr. Skolnik has left the subprime lender. The San Jose, Calif.-based First Franklin is being sold to Merrill Lynch & Co. BNC is headquartered in Irvine, Calif.

Four classes of Credit Suisse First Boston Mortgage Securities Corp.'s commercial mortgage pass-through certificates, series 2005-CND2, have been downgraded by Moody's Investors Service.The downgrades were as follows: class K, from Baa1 to Baa2; class L, from Baa2 to Baa3; class M, from Baa3 to Ba1; and class N, from Ba1 to Ba3. Classes M and N are also on review for possible further downgrade. In addition, the ratings on 17 other classes in the deal were affirmed or confirmed. Moody's attributed the downgrades to "weakening conditions in the South Florida condominium market and performance issues concerning the Prestige Portfolio and Mizner Court at Broken Sound loans." Moody's can be found on the Web at http://www.moodys.com.

Class B-2 of CDC Mortgage Capital Trust mortgage pass-through certificates, series 2003-HE1, has been downgraded from BB-minus to B-plus by Fitch Ratings.In addition, Fitch affirmed the ratings on four other classes from the CDC deal. The rating agency attributed the downgrade to a deterioration in the relationship between credit enhancement and expected losses. The pool consists of fixed- and adjustable-rate subprime mortgages, primarily for one- to four-family residential properties. The rating agency can be found online at http://www.fitchratings.com.

The third quarter was another solid quarter for the national office market, although absorption of office space declined, according to Colliers International, a Boston-based commercial real estate manager.Absorption totaled 23.4 million square feet, down from 27.8 million square feet in the second quarter and 33.6 million square feet in the third quarter of 2005, Colliers reported. The national vacancy rate stood at 13.0%, down from 13.2% in the second quarter and 14.1% a year earlier. "Demand for office space continues at a steady pace, broadly in line with gains in office-using employment -- while construction remains relatively subdued," said Ross Moore, senior vice president and director of research at Colliers. "Market participants should not become complacent, however, as this pattern is almost certain to reverse as a slowing economy will be met by a significant increase in completions." The company can be found online at http://www.colliers.com.

Fieldstone Investment Corp., Columbia, Md., has reported a loss of $45.0 million ($0.97 per share) for the third quarter, compared with net income of $23.0 million ($0.47 per share) a year earlier.The company, structured as a real estate investment trust, is the parent of nonconforming lender Fieldstone Mortgage Co. Michael J. Sonnenfeld, president and chief executive, said the loss resulted from increased reserves needed to cover delinquencies of the newer loans in its portfolio and continued market pressures on sale margins. Servicing initiatives include accelerated intervention on delinquent loans, engagement of a delinquency- and loss-mitigation monitor for 2006 production, and elimination of high-delinquency products. It is reducing yield-spread premiums and consolidating operations centers. "Our origination initiatives include introduction of new [alternative-A] products, a simplified rate sheet that reflects the actual rates at which we lend, and a new commission plan based on a loan's net value to the company," Mr. Sonnenfeld said. "We have not reduced our credit quality nor changed our pricing discipline to increase originations, and we have eliminated the lowest-credit, highest-risk loans from our guidelines."

Fidelity National Information Services has completed its acquisition of Fidelity National Financial Inc., Jacksonville, Fla., a major step in a complicated transaction that splits FNF's title insurance and information service businesses into two separate companies.Until now, FNF had been the majority owner of two other publicly traded firms, FNIS and Fidelity National Title Group Inc. As part of the transaction, most of FNF's assets were transferred to Fidelity National Title and the shell that remains of FNF was merged with FNIS. FNF shareholders received slightly over one-half of one share of FNIS for each FNF share. The last day of trading for the old FNF shares was Nov. 9. Meanwhile, Fidelity National Title is changing its name to Fidelity National Financial Inc., and its ticker symbol is changing to FNF effective Nov. 10. FNIS can be found online at http://www.fidelityinfoservices.com.

Countrywide Financial Corp., Calabasas, Calif., has announced that it intends to convert its national bank charter to a federal savings bank (or thrift) charter.The company said it has notified the Federal Reserve Board of San Francisco, the Office of Thrift Supervision, and the Office of the Comptroller of the Currency of the decision, which came after "several months of strategic analysis." Upon the approval of the application, Countrywide Bank NA would be converted to a thrift and Countrywide Financial Corp. would become a savings-and-loan holding company, with the OTS as the regulator of both entities. "In our continuous efforts to maximize efficiencies, the company has determined that Countrywide is better positioned for future growth as a savings institution with a single primary regulator, as opposed to the current dual-regulator structure," said Angelo R. Mozilo, Countrywide's chairman and chief executive officer. "Based on our analysis, we believe that the OTS's focus on the housing market and its unitary supervisory approach aligns more closely with Countrywide's existing business activities and future diversification efforts." The company can be found online at http://www.countrywide.com.

Legislation authorizing the REIT structure is likely to take effect in Germany next year, according to a participant in the annual convention of the National Association of Real Estate Investment Trusts in San Francisco.Lutz Ristow, chief executive officer of TAG Tegernsee Immobilien, said at a global summit session that the first draft of German REIT legislation passed the German Cabinet on Nov. 2 and that the legislation is likely to go through the entire legislative process by the end of the year. Even if it takes longer, the legislation is likely to be enacted with retroactive effect to Jan. 1, 2007, he said. The German government's sole concern relates to the loss of any tax revenue, and the legislation calls for a payout of 90% from the REITs to shareholders (similar to the U.S. REIT format), which will be taxed at the individual shareholder level. Residential properties are not allowed in the REIT format in the first draft, but Mr. Ristow said he sees a better than 50% chance of getting residential REITS in later versions of the legislation.

Opteum Inc., Vero Beach, Fla., has announced that it will delay filing its third-quarter earnings report and restate earnings for the first and second quarters due to an accounting irregularity involving a subsidiary's valuation of interest-rate lock commitments.Opteum, a real estate investment trust, said it believes the restatements will reduce its year-to-date consolidated pretax earnings by less than $1 million. The policy issue relates to the way the company's taxable REIT subsidiary, Opteum Financial Services LLC, accounts for changes in the fair value of rate-lock commitments, the REIT reported. Opteum invests in residential mortgage-related securities and originates loans through its subsidiary. The company can be found on the Web at http://www.opteum.com.

The average 30-year fixed mortgage rate rose from 6.31% to 6.33% over the seven-day period ended Nov. 9, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate rose from 6.02% to 6.04%, the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages climbed from 6.05% to 6.08%, and the average rate for one-year Treasury-indexed ARMs increased from 5.53% to 5.55%, Freddie Mac reported. Fees and points averaged 0.6 of a point for fixed-rate mortgages, 0.7 of a point for hybrid ARMs, and 0.8 of a point for one-year ARMs. "Mortgage rates rose earlier in the week on news of large upward revisions over the past three months in employment figures, but began to drift lower as the market looked more deeply into the numbers," said Frank Nothaft, Freddie Mac's chief economist. "For instance, in October the construction industry lost jobs, primarily due to the slowing housing market." A year ago, the average 30-year and 15-year fixed rates were 6.36% and 5.89%, respectively, and the average hybrid and one-year ARM rates were 5.81% and 5.12%, respectively, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

NetBank -- which is restructuring its entire mortgage operation -- posted a $73 million loss in the third quarter, while revealing that it has signed a supervisory agreement with its regulator, the Office of Thrift Supervision.In its earnings release, the company said it has been hurt by loan buybacks, noting that "Although repurchase demands improved from last quarter, they remained at an elevated level." The Atlanta-based NetBank recently pulled the plug on its subprime affiliate, Meritage Mortgage, Beaverton, Ore. In mid-October, it sold 70% of its residential servicing portfolio ($8.5 billion in receivables), booking a $19.3 million loss on the sale. The company can be found online at http://www.netbank.com.