Originations

Roughly 18% of the mortgage bankers and mortgage brokers in New York state have not yet paid their general assessment and are in immediate suspension, according to a New York Banking Department official who addressed the New York Association of Mortgage Brokers convention in Melville, N.Y.If the bill, plus a $100 late fee, is not paid by Oct. 10, the registration is considered to be expired, and if it is not paid by Dec. 10, the expiration is considered permanent, said Robert A. Mengani, assistant deputy superintendent of banks in the department's mortgage banking division. The department is seeing an increasing number of violations of advertising regulations, which Mr. Mengani attributed to the shrinking mortgage origination market. A particular problem involves materials using the words "United States of America" or having a picture of the Statue of Liberty, which are protected words and images. Violators open themselves up to a $15,000 fine and must send out retraction letters, he said.

After a 20-year wait, a mortgage originator education bill is awaiting the signature of New York Gov. George Pataki, the outgoing president of the New York Association of Mortgage Brokers announced Thursday at the group's annual convention in Melville, N.Y.The NYAMB executive, Don Romano, said the bill also requires that originators who work for any state-regulated entity, including mortgage bankers and state-chartered banks and thrifts, be registered and that the background check be performed by the New York Banking Department. As for specifics, Mr. Romano said there are no rules established for the law, which would go into effect on Jan. 1, 2007, although implementation would be one year later. But among the people who would have to be registered is "anyone with direct contact with the consumer," he said. The law establishes an even playing field among state-regulated entities, and "it is going to be a plus for us" in competing with federally chartered entities, Mr. Romano said. The NYAMB is going to push the idea that, by dealing with a mortgage broker, a consumer is dealing with someone who is regulated by a local authority, he said.

Corporate Office Properties LP has priced a $175 million offering of exchangeable senior notes due 2026, according to its parent company, Corporate Office Properties Trust, a real estate investment trust based in Columbia, Md.The notes will bear a fixed interest rate of 3.5%. Up to $25 million of additional notes may be issued by the initial purchasers to cover any overallotments, COPT said. The REIT can be found on the Web at http://www.copt.com.

Ventas Inc., a health care real estate investment trust based in Louisville, Ky., has priced a public offering of $225 million of 6-3/4% senior notes issued by its operating partnership, Ventas Realty LP, and a wholly owned subsidiary, Ventas Capital Corp.The senior unsecured notes, due 2017, were priced at 99.375, Ventas reported. The company said it plans to use the net proceeds of the offering to fund a portion of the cash purchase price of a previously announced transaction with Senior Care. The REIT can be found online at http://www.ventasreit.com.

Health Care Property Investors, a Long Beach, Calif.-based real estate investment trust, has priced an offering of $1 billion of senior unsecured notes.The offering consisted of $300 million of floating-rate notes due 2008, $300 million of 5.95% notes due 2011, and $400 million of 6.30% notes due 2016. The floating-rate notes were priced at 100.0, the 5.95% notes were priced at 99.971, and the 6.30% notes were priced at 99.877. The net proceeds will be used to fund a portion of the cash needed for its proposed merger with CNL Retirement Properties Inc., the REIT said. The joint book-running lead managers for the offering were Barclays Capital Inc. and J.P. Morgan Securities Inc. The REIT can be found online at http://www.hcpi.com.

Donahue Schriber, a private real estate investment trust based in Costa Mesa, Calif., has announced the closing of a new $700 million secured line of credit.The new facility increases available borrowings by $225 million and reduces the interest rate by 30 basis points, the REIT said. "Our development and acquisition activity in California, Nevada, and Arizona totals $475 million, and the tremendous support we have received from the banks involved will allow us to continue our growth," said Lisa Hirose, Donahue Schriber's chief financial officer. The facility was arranged by Banc of America Securities. The company can be found online at http://www.donahueschriber.com.

A new service offered by HSBC Credit Center Inc. enables homebuyers in Texas and California to complete the entire mortgage application and approval process, including all documentation, in Spanish.HSBC Credit Center, an indirect subsidiary of Prospect Heights, Ill.-based HSBC North America Holdings Inc., operates 16 full-service branches staffed by certified bilingual employees, the company said. The loan choices offered include traditional fixed- and adjustable-rate first-lien mortgages and 40-year mortgages. The company can be found on the Web at http://www.hsbccreditcenter.com.

Health Care REIT Inc., Toledo, Ohio, and Windrose Medical Properties Trust, Indianapolis, have announced a merger agreement under which Health Care REIT will acquire Windrose for approximately $877 million.The total consideration includes the assumption of Windrose's outstanding debt, which stood at approximately $426 million as of June 30, the real estate investment trusts reported. George Chapman, chief executive officer of Health Care REIT, said the merger would result in an entity with a bigger tenant base and greater asset diversification. "We intend to capitalize on the additional opportunities presented in property management and development, while the increased diversification provided by this combination should provide a more secure revenue stream through different operating cycles, generating higher-quality dividends and incremental value for our shareholders," he said. The REITs can be found online at http://www.hcreit.com and http://www.windrosempt.com.

Hurricane Katrina-related delinquencies have dropped to just over a third of their peak but are still 3.5 times higher than pre-storm levels, according to Fitch Ratings.The rating agency said its delinquency index for loans collateralizing U.S. commercial mortgage-backed securities fell 4 basis points, to 0.55%, in August. The majority of outstanding Katrina-related delinquencies are located in Louisiana, mostly in and around New Orleans, as the city's recovery continues to lag well behind that of other storm-affected regions, said Patty Bach, a Fitch senior director. "With New Orleans' population estimated at 215,000, less than 50% of its pre-storm level of 465,000, large sections of the city remain mostly uninhabited as flood-damaged property owners have been waiting for resolution of questions surrounding level protection and financial assistance for rebuilding," Ms. Bach said. Fitch said its seasoned CMBS delinquency index, which omits transactions with less than one year of seasoning, dropped 9 bps, to 0.69%. Fitch can be found online at http://www.fitchratings.com.

The Market Composite Index, an overall measure of mortgage applications, rose from to 566.3 to 584.2 on a seasonally adjusted basis during the holiday-shortened week ended Sept. 8, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications decreased 8.3% on the week and were down 22.8% from the level recorded a year earlier. The Purchase Index rose from 389.7 to 410.2 on a seasonally adjusted basis, while the Refinance Index rose from 1594.7 to 1597.0. Refinancings represented 40.3% of total applications, down from 41.0% the previous week, while adjustable-rate mortgages accounted for 25.5%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages increased from 6.31% to 6.32%, and points (including the origination fee) fell from 1.10 to 1.06 for loans with 80% loan-to-value ratios, the association reported. The MBA can be found online at http://www.mortgagebankers.org.

While the overall mortgage delinquency rate, at 4.39%, declined by two basis points in the second quarter, underlying data suggest a slight decline in overall credit quality, according to the Mortgage Bankers Association.In fact, the improvement from the first quarter was largely driven by a decrease in the delinquency rate for loans 90-or more days past due, particularly in the states of Louisiana and Mississippi, which were heavily affected by Hurricane Katrina last year. Meanwhile, the percentage of loans in foreclosure increased by 1 bp to 0.99% as of June 30. The percentage of loans entering the foreclosure process also rose slightly from that of the first quarter. Doug Duncan, the MBA's chief economist, said the data reflect a cooling housing market, noting that some states experienced home price declines in the second quarter. "We are seeing increases in delinquency rates for subprime loans, particularly for subprime ARMS," he said.

"Exotic" mortgages -- in particular, payment-option ARMs and interest-only loans -- were a factor in the nation's housing boom of the past few years, a panel of economists told a Senate subcommittee on Wednesday.Richard A. Brown, chief economist of the Federal Deposit Insurance Corp., told the Senate Banking subcommittee on housing that in "hot housing markets" payment-option adjustable-rate mortgages and IO loans were used to help qualify homebuyers. Mr. Brown and other panelists said exotic loans and other factors -- including low interest rates, market demand, lack of developable land, and rising commodity prices -- fueled a home price boom that began in 2003. David Seiders, chief economist for the National Association of Home Builders, said the performance of option ARMs and IO loans is an "area of substantial uncertainty" for the market. He said "we know the dollar volume" of option ARMs originated, but "we don't know the features. Is it a payment-option ARM with a piggyback loan too?" Some economists believe that when option ARMs adjust at higher note rates, many consumers may default on the loans. Next week the subcommittee will hold a hearing on the role exotics play in the mortgage market.

Ashford Hospitality Trust, a real estate investment trust based in Dallas, has announced an increase in its secured revolving credit facility to $150 million.The interest rate on the facility was reduced to a range of 160 to 185 basis points over the London interbank offered rate, Ashford said. The facility, which matures in August 2008, has two one-year extension options and can be increased to $200 million under certain conditions. Calyon New York Branch was the sole lead arranger. The REIT can be found online at http://www.ahtreit.com.

The seasonally adjusted annual rate of housing starts in Canada fell to 213,700 units in August from 236,500 units in July, according to Canada Mortgage and Housing Corp."Housing starts decreased in August solely due to a decline in the multiple [multifamily] starts segment," said Bob Dugan, chief economist at CMHC. "After three consecutive months of increases, the volatile multiple starts segment dropped to its lowest level of the year in August. Single-detached starts moved higher from their lackluster performance in July, but not markedly so." Canada Mortgage and Housing Corp. can be found online at http://www.cmhc.ca.

Oak Street Mortgage, Carmel, Ind., a top-40-ranked subprime lender, is exiting the business, agreeing to sell 21 retail branches to NovaStar Mortgage, Kansas City, Mo.No purchase price was disclosed, but NovaStar said in a statement that it is paying a "slight premium over the book value of the assets" being acquired. NovaStar said the new branches will increase its production by $75 million to $100 million a month. Oak Street said it is exiting the residential business entirely, but will remain a commercial mortgage lender. In the second quarter Oak Street originated $581 million, ranking 36th nationwide, according to the Quarterly Data Report, a MortgageWire affiliate. It also table-funds loans through the wholesale channel. It is unclear what will happen to its wholesale operation. The company could not be reached for comment at deadline time.

Despite the slowdown in the housing market, 2006 is shaping up to be a very good year for the mortgage market and Freddie Mac, according to the company's chairman and chief executive officer, Richard Syron."I am concerned about the housing market," Mr. Syron told investors at a Lehman Brothers conference. He said the market is entering a "tumultuous" period with the dramatic falloff in price appreciation in the second quarter and buyers facing affordability problems. However, Freddie has not noticed any significant impact on its business, according to Mr. Syron. "I still expect 2006 will be the third-best year for the mortgage market," he said. The CEO also noted that Freddie continues to increase its investments in highly rated variable-rate mortgage securities, which made up 40% of its retained portfolio at the end of June. "These purchases are essential to meeting our housing goals, and they also provide good financial returns," Mr. Syron said. Freddie Mac can be found online at http://www.freddiemac.com.

Class B-1 of Credit Suisse First Boston Mortgage Securities Corp. series 2002-HE11 has been downgraded from Baa2 to B1 by Moody's Investors Service.The downgrade was based on the fact that the bond's credit enhancement levels, including excess spread, are low compared with the projected losses, the rating agency said. The pool is backed by subprime first-lien loans.

Two classes of Salomon Brothers Mortgage Securities VII Inc. commercial mortgage pass-through certificates, series 2000-C1, have been downgraded by Moody's Investors Service.Class M was downgraded from B2 to B3, and class N was downgraded from B3 to Caa2. In addition, Moody's upgraded five classes in the deal and affirmed the ratings on eight other classes. The rating agency attributed the downgrades to $12 million of realized losses and the dispersion of loan-to-value ratios. Approximately 8.7% of the pool has an LTV greater than 100%, Moody's said. The certificates are collateralized by 228 loans on properties in 36 states. Moody's can be found online at http://www.moodys.com.

Two classes of NationsLink Funding Corp.'s commercial mortgage pass-through certificates, series 1998-1, have been downgraded by Fitch Ratings.Class G was downgraded from BB-plus to B-plus, and class H was downgraded from B to CC/DR4. Fitch also affirmed the ratings on seven other classes in the transaction. The downgrades were attributed to expected losses on the largest specially serviced asset in the deal, a hotel in Kissimmee, Fla., that is now real estate owned. "The hotel has lost its flag, and a recent valuation of the property indicates significant losses upon liquidation of the asset." the rating agency said. Fitch can be found online at http://www.fitchratings.com.

Realty Income Corp., Escondido, Calif., has priced an offering of 4.1 million shares of common stock at $24.32.Realty Income said the offering will raise gross proceeds of approximately $99.7 million, which will be used in part to fund a portion of the purchase price of a previously announced acquisition and to repay borrowings under the company's $300 million unsecured acquisition credit facility. 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.