Originations

Anglo Irish Bank is opening a new representative office in Chicago that will offer commercial real estate financing solutions for clients in the Midwest region.The Chicago office will be managed by Paul Doyle, a senior vice president with the bank, Anglo Irish reported. "This new office is in response to our clients' requests to handle more commercial real estate financing transactions in the Midwest," said Tony Campbell, president and chief executive officer of Anglo Irish Bank's North America operations. Mr. Doyle will oversee an initial staff of five employees. The bank has already financed a few commercial real estate properties in Chicago. Anglo Irish Bank, listed on the Irish Stock Exchange, is Ireland's third-largest bank, according to the company.

HomeBanc Corp., Atlanta, has revised the range of its expected third-quarter net loss (under generally accepted accounting principles) from $0.00-$0.04 per share to $0.04-$0.08 per share.Because HomeBanc is structured as a real estate investment trust, its management said REIT taxable income is also a meaningful measure of its performance. Using that measure, HomeBanc is estimating income available to holders of common stock at $0.25-$0.27 per share for the third quarter, up from the previous guidance of $0.22-$0.25. Origination volume for the quarter was $1.3 billion, down 28% from $1.8 billion for the same period in 2005. "The by-product of the industry downturn is overcapacity, margin compression, and aggressive credit practices," said Patrick S. Flood, HomeBanc Corp.'s chairman and chief executive officer. ".... As a result, we are accelerating certain expense reduction efforts to better position our company to confront the challenges of the environment in which we are operating." HomeBanc can be found on the Web at http://www.homebanc.com.

Allan Dalton, president of Realtor.com, has been named president of the real estate division of Move Inc., a provider of real estate and community information for homebuyers and renters who are relocating.Before joining Realtor.com, Mr. Dalton was president and co-owner of an independent real estate brokerage for 18 years, according to Move Inc. Move is the parent company of Realtor.com, the official website of the National Association of Realtors. Realtor.com can be found online at http://www.realtor.com, and Move can be found at http://www.move.com.

Fidelity National Title Group, Jacksonville, Fla., will replace Emmis Communications Corp. in the S&P MidCap 400 Index after the close of trading on Oct. 24, Standard & Poor's has announced.The 85% of Fidelity National Title owned by Fidelity National Financial Inc. is scheduled to be spun off to shareholders on or about that date, S&P said. As a result, the title insurer and provider of escrow services would replace Emmis, which now ranks 400th in the index. S&P can be found on the Web at http://www.standardandpoors.com.

Home price appreciation will undergo a "modest" decline next year in California, and home sales will fall a projected 7%, according to the California Association of Realtors.In its 2007 California Housing Market Forecast released at the California Realtor Expo in Long Beach, CAR predicted that the median home price in California will decline 2% next year to $550,000. (This year's projected median home price is $561,000.) The forecast calls for sales of 447,500 units, compared with this year's projected total of 481,200, the association said. "The housing market clearly downshifted in 2006 from the record-setting sales and robust price gains of the last few years," said CAR president Vince Malta. He said the 2007 sales decline is not expected to be as steep as this year's. The association can be found online at http://www.car.org.

Prudential Real Estate Investors, Parsippany, N.J., is getting in on Kimco Realty Corp.'s previously announced acquisition of Pan Pacific Retail Properties through a joint venture with Kimco.PREI is putting in a $1.1 billion equity investment on behalf of institutional investors to support the merger, according to the real estate investment management affiliate of Prudential Financial. Pan Pacific's portfolio includes 138 properties, which are primarily grocery-anchored shopping centers. All but two of the properties are located in the Western United States, with concentrations in California, Oregon, Washington, and Nevada. "This transaction gives our investors an opportunity to hold a stake in well-located shopping centers in the Western U.S.," said Steve Vittorio, principal in PREI's capital markets group. "The locations and tenants for these assets give them a solid inherent value that we hope to further enhance over time."

Citing higher-than-expected delinquencies and stiff pricing competition, Accredited Home Lenders Inc. forecast lower annual earnings on Thursday, sending its shares down 12% at one point.In a statement, the subprime lender also said its loan production has fallen short of expectations. Specifically, the company said its profits will not even reach the lower end of its previous guidance of $4.50 a share. Accredited chief executive James Konrath said "the ferocity of pricing competition" is due partly to lenders who are trying to maintain volume because they are takeover targets and want to look good. The San Diego-based Accredited recently disclosed that it bought back $38.6 million in mortgages in the second quarter, a 145% increase from the level of a year earlier. It will release third-quarter earnings in early November. Accredited can be found online at http://www.accredhome.com.

Transnational Financial Network Inc., a San Francisco-based mortgage banking firm, has announced an agreement to acquire the residential mortgage lending division of Texas Capital Bank NA, Dallas.Under the agreement, Transnational will issue up to three million shares of its common stock, of which more than 1.29 million shares are subject to two earn-out provisions. If the revenues of the division during the 12-month period ending Sept. 30, 2007, are greater than 20% of the $17.06 million of revenues generated by the division in the 12-month period ended Sept. 30, 2006, Transnational will issue an additional 337,355 shares, the company said. If the revenues during the 12-month period ending March 31, 2008, are greater than 60% of the revenues of the preceding 12-month period, Transnational will issue an additional 954,000 shares. The division "has been very successful in originating mortgages, building originations to their present level in three years and developing strong sales and broker service programs," said Joseph Kristul, Transnational's chief executive officer. "[The division] gives us significant geographic diversification beyond California and Arizona, with a deep and solid senior management team."

Meanwhile, Washington Mutual chairman and chief executive Kerry Killinger says the federal guidance on nontraditional mortgages will have a "limited" effect on its payment-option ARM lending program, but he wants to see a level playing field with regard to federal- and state-regulated entities."For the guidance to be truly effective in safeguarding consumers, we do believe all mortgage lenders should be held to the same standards," the CEO told investors and analysts during a conference call on the company's third-quarter results [see previous item]. State regulators are expected to issue similar guidance in a couple of weeks. "We continue to evaluate the guidance," Mr. Killinger said. "However, based on preliminary analysis and initial discussions with our regulator, the Office of Thrift Supervision, while we expect some changes, the impact on the origination of the option ARM products in our Home Loans group appears limited." The giant thrift originated $37.2 billion of home loans in the third quarter, and 30% were option adjustable-rate mortgages. The average credit score is 707, and the loan-to-value ratio of the portfolio is 57%, Mr. Killinger said, adding that demand for hybrid ARMs has increased.

Washington Mutual Inc., Seattle, has reported earnings of $748 million ($0.77 per share) for the third quarter, a decline from $821 million ($0.92 per share) a year earlier that WaMu attributed in part to efficiency initiatives and a sale of mortgage servicing rights.The company's Home Loans group recorded a net loss of $33 million in the third quarter, compared with net income of $302 million a year earlier, WaMu said. The results included net after-tax charges of $31 million related to the sale of $2.53 billion of mortgage servicing rights and after-tax charges of $33 million related to the company's efficiency initiatives, which are expected to continue into the fourth quarter, the company said. Home loan volume totaled $37.20 billion in the third quarter, down 10% from $41.36 billion in the second quarter and down 34% from $56.47 billion a year earlier. WaMu can be found online at http://www.wamu.com.

The average 30-year fixed mortgage rate fell from 6.37% to 6.36% over the seven-day period ended Oct. 19, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate was unchanged at 6.06%, the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages crept up from 6.10% to 6.11%, and the average rate for one-year Treasury-indexed ARMs increased from 5.56% to 5.57%, Freddie Mac reported. Fees and points averaged 0.5 of a point for fixed-rate mortgages and hybrid ARMs and 0.8 of a point for one-year ARMs. "Mortgage rates didn't move much either way this week as the markets wait for the next scheduled [Federal Open Market Committee] meeting," said Frank Nothaft, Freddie Mac's chief economist. "General consensus leans heavily toward the notion that the Fed will not raise rates at that meeting, taking upward pressure off mortgage rates this week." A year ago, the average 30-year and 15-year fixed rates were 6.10% and 5.65%, respectively, and the average hybrid and one-year ARM rates were 5.59% and 4.89%, respectively, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

Realty Income Corp., Escondido, Calif., has priced an offering of 6.0 million shares of common stock at $26.40.Realty Income said the offering will raise net proceeds of approximately $150.7 million, which are expected to be used to fund a portion of the purchase price of a previously announced acquisition of restaurant properties. The sole book-running manager of the offering is Merrill Lynch & Co. The company can be found on the Web at http://www.realtyincome.com.

Public Storage Inc., Glendale, Calif., has priced a public offering of 8.0 million depositary shares -- each representing one-thousandth of a share of 6.75% series L cumulative preferred stock -- at $25 per share.The real estate investment trust said gross proceeds are expected to total $200 million. The joint book-running managers for the offering were Citigroup Global Markets Inc., Merrill Lynch & Co., Morgan Stanley, and Wachovia Securities. The REIT can be found on the Web at http://www.publicstorage.com.

NetGain, a weblog on evaluating income property investments headquartered in Mountain View, Calif., has announced the introduction of a national index aimed at increasing return on investment and minimizing investment risk.NetGain said the National Income Property Index provides recommendations to investors based on "the two most crucial influences" on the value of income property: jobs and the cost of debt service. NetGain co-founder Allen Cymrot said the index fills "a void in the marketplace for solid, up-to-date analysis on the current investment climate" and offers investors "a trusted resource that takes into account historical and present-day statistics, along with data to guide them toward establishing critical negotiating tactics effective in any real estate market." The company can be found online at http://www.netgainrealestate.com.

JPMorgan Chase & Co., New York, has reported net income of $3.3 billion ($0.92 per share) for the third quarter, up from $2.5 billion ($0.71 per share) a year earlier, but the company's mortgage banking operations took a net loss of $83 million.A year earlier, the mortgage banking operations had recorded net income of $53 million. The company said mortgage production revenue totaled $197 million in the third quarter, down $32 million from a year earlier and reflecting a 28% decline in mortgage originations, which totaled $28.4 billion. Net mortgage servicing revenue totaled $1 million, which was down dramatically from $163 million in the third quarter of 2005 largely as a result of the negative-$251 million in revenue for the risk management of mortgage servicing rights. The plunge in MSR risk management revenue reflected a $235 million negative valuation adjustment to the MSR asset due to "changes and refinements to inputs and assumptions used in the MSR valuation model," the company said. The company can be found online at http://www.jpmorganchase.com.

The Market Composite Index, an overall measure of mortgage applications, fell from 599.1 to 585.8 on a seasonally adjusted basis during the week ended Oct. 13, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications decreased 2.3% on the week and were down 11.4% from the level recorded a year earlier. The Purchase Index crept up from 383.3 to 384.7 on a seasonally adjusted basis, while the Refinance Index fell from 1857.0 to 1758.2. Refinancings represented 45.0% of total applications, down from 46.4% the previous week, while adjustable-rate mortgages accounted for 26.5%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages increased from 6.27% to 6.33%, and points (including the origination fee) rose from 1.08 to 1.15 for loans with 80% loan-to-value ratios, the association reported. The MBA can be found online at http://www.mortgagebankers.org.

Single-family housing starts rose 4.3% in September, but some economists believe it is a temporary blip since homebuilders are struggling with cancellations of sales contracts and high inventories of unsold homes.The U.S. Census Bureau reported that single-family starts jumped from a seasonally adjusted annual rate of 1.37 million in August to 1.43 million in September. David Seiders, chief economist of the National Association of Home Builders, said it is a "little bit disrupting" to see the starts jump up with the level of inventory many builders are carrying. "My judgment is that a falloff of starts is virtually inevitable for October," he said. The NAHB economist noted that cancellations are still rising. However, it appears that sales of new homes may be stabilizing thanks to lower mortgage rates and gasoline prices, as well as concessions by builders and price cuts. "We expect that to sort of stop the bleeding on the demand side fairly soon," Mr. Seiders said.

Thornburg Mortgage Inc., Santa Fe, N.M., has reported net income (before preferred stock dividends) of $75.3 million ($0.64 per share) for the third quarter, compared with $74.0 million ($0.70 per share) a year earlier.Thornburg said it originated $1.4 billion in mortgage loans during the quarter, up 10% from the level recorded a year earlier. "In the third quarter, our earnings benefited from new asset acquisitions financed with collateralized debt obligations, gains in our hedged mortgage loan commitments, slowing portfolio prepayment rates, and the additional utilization of some of our excess capital," said Larry Goldstone, Thornburg's president and chief operating officer. 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.

Wells Fargo & Co., San Francisco, has reported record net income of $2.19 billion ($0.64 per share) for the third quarter, up from $1.98 billion ($0.58 per share) a year earlier, although revenues fell at Wells Fargo Home Mortgage.(Earnings per share reflect a two-for-one stock split in August.) Home Mortgage revenue totaled $923 million, down from $1.4 billion in the third quarter of 2005, largely due to a recovery a year earlier of $356 million in the valuation of mortgage servicing rights, Wells Fargo reported. Mortgage originations totaled $104 billion, down from $116 billion in the second quarter but up from $103 billion a year earlier. "Our owned real estate servicing portfolio grew to $1.33 trillion, up $215 billion for the quarter," said Mark Oman, senior executive vice president in the Wells Home and Consumer Finance Group. "This growth included $172 billion of servicing acquired during the quarter." The company can be found online at http://www.wellsfargo.com.

The insurance commissioner for Washington state has issued a report maintaining that title insurers "routinely" break state law by allegedly using illegal incentives and inducements to attract business.The real shocker, said Mike Kreider, "was the scope and the extent of the abuse." Washington state law limits incentives and inducements to $25 per person per year. Even companies that received praise for being in substantial compliance had a number of violations over the 18-month period studied, the report said. The department said it will issue no fines, but will focus on prevention and compliance. Mr. Kreider also announced the formation of a work group to study issues such as whether Washington state should adopt a system similar to one used in Iowa, under which there is no title insurance but the state government provides title protection services. A statement from LandAmerica, one of the companies cited, said: "All too often, these laws and regulations are unclear at the state and federal level. There are many ambiguities in the current regulations regarding inducements, producing disagreement between the title insurance industry and the Washington DOI concerning what's proper and improper." Other national companies cited in the report are Fidelity, First American, Old Republic, and Stewart.