Originations

The National Association of Mortgage Brokers is calling on federal banking regulators to delay implementation of their underwriting guidance on nontraditional mortgage products until state regulators are ready to implement similar guidance.NAMB president Harry Dinham said the guidance will be "ineffective" unless it applies to all mortgage originators. "Uneven or uncoordinated implementation of the federal guidance will simply create consumer confusion and marketplace inefficiencies," according to a resolution adopted by the NAMB's board of directors. State regulators are working on nontraditional mortgage guidance for state-licensed mortgage bankers and brokers that is similar to federal guidance on interest-only and payment-option adjustable-rate mortgages. The state guidance is expected to be issued very soon. Under the federal guidance, banks and thrifts are required to monitor broker originations and take corrective action if a broker does not follow the federal guidance.

Inland Real Estate Corp., Oak Brook, Ill., has announced the pricing of $170 million in aggregate principal amount of convertible senior notes due 2026 in a private placement.The offering will include an option to the initial purchasers to acquire up to an additional $10 million in principal amount of the notes, the company said. The 4.625% notes will initially be convertible, at the company's option, into shares of Inland's stock at approximately $20.70 per share, which represents a 15% premium on the closing price of Inland's stock on Nov. 7, Inland reported. The company can be found online at http://www.inlandrealestate.com.

New York Mortgage Trust Inc., a New York-based mortgage lender and real estate investment trust, has reported a consolidated net loss of $3.9 million ($0.21 per share) for the third quarter, compared with net income of $2.9 million ($0.16 per share) a year earlier.The company's loan origination volume totaled $602.8 million for the third quarter, down from $1.0 billion in the third quarter of 2005. "The deterioration in third-quarter operating results is attributable to continued pressure in both our Mortgage Portfolio Management and our Mortgage Lending segments," said Steven B. Schnall, chairman, president, and co-chief executive of the company. In the former segment, the earnings decline was attributed largely to "the persistence of a flat to inverted yield curve" and declining net interest spreads. In the lending arena, the results were linked to a 19% decline in origination volume from that of the second quarter and "continued pricing pressure" on premiums earned on loans sold to third parties. The REIT can be found online at http://www.nymtrust.com.

Crescent Real Estate Equities Co., Fort Worth, Texas, has announced that it is reviewing its strategic options, although a special committee of its board of trust managers has rejected a recent offer to buy certain of its assets.The real estate investment trust said it does not expect to make any further announcements regarding the review until it has been completed or an announcement is required by federal law. Crescent also reported net income available to common stockholders of $1.3 million ($0.01 per share) for the third quarter, compared with $71.6 million ($0.71 per share) a year earlier.

Colonial Properties Trust, a real estate investment trust based in Birmingham, Ala., has announced an acceleration of its plan to focus more of its efforts on the multifamily business.Colonial said it plans, over the next six to 12 months, to sell the majority of its wholly owned office assets and retail assets into several joint ventures that it will manage. It will also sell outright certain other office and retail assets. "Once the anticipated sales are complete, the company estimates that annualized net operating income from multifamily operations will be approximately 80% of the company's total net operating income, compared to approximately 50% today," the REIT said. Colonial can be found on the Web at http://www.colonialprop.com.

The Market Composite Index, an overall measure of mortgage applications, rose from 570.8 to 620.9 on a seasonally adjusted basis during the week ended Nov. 3, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications increased 8.0% on the week but were down 5.0% from the level recorded a year earlier. The Purchase Index rose from 375.6 to 402.2 on a seasonally adjusted basis, while the Refinance Index rose from 1709.2 to 1897.9. Refinancings represented 46.3% of total applications, up from 45.0% the previous week, while adjustable-rate mortgages accounted for 26.4%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages was unchanged at 6.24%, and points (including the origination fee) slipped from 1.09 to 1.08 for loans with 80% loan-to-value ratios, the association reported. The MBA can be found online at http://www.mortgagebankers.org.

Standard & Poor's has announced that CB Richard Ellis Group Inc., El Segundo, Calif., will replace Fisher Scientific International in the S&P 500 Index instead of BellSouth Corp., as originally indicated.CBRE, a commercial real estate services firm, will be added to the index following the close of trading Nov. 9, S&P said. Fisher is being acquired by another constituent of the S&P 500. A new replacement for BellSouth will be named at a later date. S&P can be found online at http://www.standardandpoors.com.

Health Care Property Investors, a Newport Beach, Calif.-based real estate investment trust, has priced an offering of 29.15 million shares of common stock at $29.85 per share.The gross proceeds are expected to be approximately $870 million, or about $1 billion if the underwriters exercise their overallotment option in full, the REIT said. The joint book-running managers of the offering were Goldman, Sachs & Co., Merrill Lynch & Co., Banc of America Securities LLC, and UBS Investment Bank. The REIT can be found online at http://www.hcpi.com.

Scottsdale/Phoenix, Ariz., Orlando, Fla., and Milwaukee have been identified by Chicago-based Rizzo Realty Group as key markets for residential real estate investment.Rizzo, which specializes in investment, vacation, and second-home condominium properties, said it considered the following factors in choosing the best areas for long-term real estate investing: resale marketability, location, rental market vacancy rates, and median-home-price-to-median-income ratios. Rizzo said Scottsdale/Phoenix is "fast becoming the hottest market in the country," noted that Orlando benefits from the 800 people per day who move to Central Florida, and said Milwaukee is "one of the best places to live and invest," where downtown real estate appreciation has averaged 12% over 30 years. "Real estate is the safest investment consumers can make, and right now buyers are in the driver's seat," said Santo Rizzo, chief executive officer of Rizzo Realty Group. "We cannot stress enough that consumers should take advantage of today's real estate cool-down for their own long-term investment needs." The company can be found on the Web at http://www.rizzorealtygroup.com.

Atlantic-Pacific Capital has announced the final close of Dune Real Estate Fund, an opportunistic real estate fund established by Dune Capital Management.The fund, which closed on a total of $727 million of committed capital, makes opportunistic investments in a wide rage of real-estate-related assets, portfolios, joint ventures, and operating companies worldwide, according to Atlantic-Pacific Capital, a global placement agent that raises capital for alternative investment funds and direct private-placement transactions. It can be found online at http://www.apcap.com.

HomeBanc Corp., an Atlanta-based mortgage lender that operates under a real estate investment trust structure, says it expects to give up that status in 2007 in large part because of adverse market conditions."This decision will enable the organization to preserve book value in the short-term and to retain future earnings to grow book value in the long-term," said Patrick S. Flood, HomeBanc's chairman and chief executive officer. "In addition, our board of directors continues to consider and evaluate a wide range of strategic options, all geared to maximizing shareholder value." Under generally accepted accounting principles, HomeBanc recorded a net loss attributable to common stockholders of $2.4 million ($0.04 per share) for the third quarter, compared with a loss of $783,000 ($0.01 per share) in the third quarter of 2005. Net gain on sale of mortgage loans for HomeBanc fell to 113 basis points in the most recent quarter from 144 bps a year earlier. The company can be found on the Web at http://www.homebanc.com.

Columbia Equity Trust Inc., Washington, D.C., has announced an agreement with a subsidiary of JPMorgan Asset Management's Special Situation Property Fund whereby SSPF will acquire Columbia in a transaction valued at approximately $502 million.Columbia, a real estate investment trust, said the estimated value of the all-cash merger includes the assumption of approximately $213 million of its debt. Under the terms of the pact, SSPF will acquire all the outstanding common stock of Columbia for $19 per share, which represents a 12.6% premium to the volume-weighted average closing price over the past 30 days, according to the REIT. Columbia also reported that Oliver T. Carr III, its chairman, president, and chief executive officer, and John A. Schissel, its executive vice president and chief financial officer, have entered into employment agreements with SSPF that will supersede their current employment agreements with Columbia upon completion of the merger. Columbia can be found online at http://www.columbiareit.com.

H&R Block Inc., Kansas City, Mo., is considering selling Option One Mortgage Corp., Irvine, Calif., one of the nation's largest subprime lenders and servicers.The tax preparation company has also initiated cost-cutting measures at the lender and has hired Goldman Sachs & Co. as an adviser. The nation's sixth-largest subprime originator said it will "consolidate by one-third its loan fulfillment operations by closing 12 branches over the next four months." If Block cannot sell Option One, it might consider spinning it off through the public markets. According to the Quarterly Data Report, Option One services $74 billion in loans, ranking fourth among all subprime servicers. Subprime profit margins are extremely tight right now, and consolidation in the sector is picking up steam. On Monday, NetBank of Georgia said it would close its subprime division. Option One can be found online at http://www.optiononemortgage.com.

The First American Corp., Las Vegas, has announced the availability of an index of screened and certified mortgage lenders that have incorporated nontraditional credit scoring techniques into their underwriting processes.The company said the Anthem Lender Directory includes a growing list of more than 200 loan officers nationwide. The directory will help real estate agents, community groups, and consumers identify lenders who are using "the latest" credit evaluation methods, First American said. "By helping consumers efficiently identify trusted lenders who are now embracing alternative credit solutions, First American is continuing to serve as a catalyst in creating homebuying opportunities within the emerging minority and new-immigrant homebuyer segments," said Mark F. Catone, senior vice president of First American Credco, the company's credit information subsidiary. "Connecting those homebuyers with committed lenders who have undergone our rigorous compliance screening process will enable many more deserving families to secure prime-grade mortgage loans." Further information can be found online at http://www.credco.com/anthem.

CIT Group, a New York-based commercial real estate lender, and BRT Realty Trust, a New York mortgage real estate investment trust, have entered into a joint venture to offer short-term commercial real estate mortgage loans.The venture, BRT Funding, will have an initial capitalization of up to $100 million and will offer bridge loans, CIT said. The REIT, which is managing the venture, is funding 25% of the investment, and CIT is funding 75%. "This new alliance will immediately allow us to broaden our ability to serve the full range of commercial real estate financing needs of our customers," said Rick Wolfert, vice chairman of commercial finance at CIT. The companies can be found online at http://www.cit.com and http://www.brtrealty.com.

NetBank Inc., Atlanta, has pulled the plug on its Meritage Mortgage subprime affiliate, but has agreed to transfer many of the account executives working there to another company.NetBank, which is in the throes of restructuring its entire mortgage business, will also shut a division that finances recreational vehicles, boats, and aircraft. Closing the two businesses will cost the struggling bank as much as $7.5 million. Even though NetBank is exiting subprime, it has found a home for many of Meritage's 80-plus AEs at Lime Financial, Lake Oswego, Ore. (The transaction will cost Lime nothing.) A wholesale funder that works through brokers, Meritage is based in Beaverton, Ore. The company was created by current Lime executives Fred and Mike Baldwin, among others. Meritage was eventually bought by one of NetBank's predecessor companies. Among subprime originators, Meritage ranked 35th in the first quarter, but has not reported funding numbers since then. The companies can be found online at http://www.netbank.com and http://www.limefinancial.com.

BRT Realty Trust, a real estate investment trust based in Great Neck, N.Y., has reported closing on an amendment to its credit facility that boosts its line of credit from $155 million to $185 million.The facility is provided by North Fork Bank, VNB New York Corp., Signature Bank, and Manufacturers and Traders Trust Co., the company said. It has a maturity date of Feb. 1, 2008, and provides for two one-year renewal options. "The line of credit is secured primarily by mortgage receivables held by BRT, and the maximum availability is contingent on the collateral posted from time to time," the company said. BRT, a mortgage REIT, can be found online at http://www.brtrealty.com.

Equity Residential, Chicago, has reported net income of $56.4 million ($0.19 per share) for the third quarter, a major falloff from $250.2 million ($0.87 per share) for the third quarter of 2005.The company, the largest multifamily real estate investment trust by market capitalization, attributed the decline primarily to higher gains on the sales of properties in the third quarter of 2005. The REIT is revising downward its outlook for funds from operations, an alternative earnings measure used in the REIT world, from the current range of $2.30-$2.50 per share to $2.32-$2.35 per share, mainly as a result of "slightly higher-than-expected debt prepayment costs from the sale of Lexford as well as a lower-than-expected contribution from our condominium business." Equity Residential completed the sale of its Lexford Housing division last month. The company can be found online at http://www.equityapartments.com.

Friedman, Billings, Ramsey Group Inc., an investment banking firm based in Arlington, Va., has reported a net after-tax loss of $67.4 million ($0.39 per share) for the third quarter that it attributed largely to various mortgage-related developments.The results contrasted sharply with net income of $23.0 million ($0.14 per share) for the third quarter of 2005. Noting that it had reclassified its mortgage loan portfolio in connection with a re-evaluation of its mortgage strategy, FBR said the result was a $146.8 million mark-to-market writedown in the value of the portfolio. The company also recorded a $20 million writedown of "other than temporary impairments" in its merchant banking portfolio, the majority of which it attributed to companies doing business in the nonprime mortgage sector. Also contributing to FBR's weakness in the third quarter was a $7.4 million after-tax loss at First NLC Financial Services, a wholly owned nonconforming mortgage lending subsidiary of FBR. The company can be found online at http://www.fbr.com.

IndyMac Bancorp Inc., Pasadena, Calif., has reported record mortgage loan volume and net earnings of $86 million ($1.19 per share) for the third quarter, compared with $78 million ($1.16 per share) a year earlier.IndyMac's mortgage loan production totaled a record $24 billion in the third quarter, up 41% from that of a year earlier, the company said. "While mortgage industry volumes continued to decline, our mortgage production hit a record level for the 11th consecutive quarter, growing 19% over the prior quarter," said Richard H. Wohl, IndyMac Bank's president. "As a result, our market share nearly doubled over last year to an estimated 3.87%, an all-time high for IndyMac, demonstrating strong progress in our core strategy of leveraging our mortgage banking infrastructure." The company said its mortgage servicing portfolio had reached $124 billion, representing 180% growth over the past two years. IndyMac can be found online at http://www.indymacbank.com.