Originations

A subsidiary of New York-based CharterMac has completed a $455 million, fixed-rate bond securitization transaction with a weighted average term of eight years.The transaction was completed through the sale of Class A Medium Term Tax-Exempt Multifamily Housing Trust Certificates, Series 2006A (the "Class A Certificates") to third-party investors. The purpose of the securitization was to reduce the company's floating interest rate exposure with the proceeds being used to retire existing bond securitizations that have floating-rates and shorter terms. As a result, more than 70% of the company's capital structure is fixed-rate, based on amounts outstanding at June 30, 2006, as adjusted to include this transaction, the incremental financing to acquire ARCap and hedges associated with the new debt facility put in place at that time. The company can be found on the Web at http://www.chartermac.com.

Standard & Poor's has made some changes to the S&P MidCap 400, SmallCap 600 and REIT Composite indices that impact some REITs that play in the mortgage space.First, S&P REIT Composite constituent Mid-America Apartment Communities Inc., a REIT engaged in the acquisition, ownership, and operation of apartment communities, primarily in the southeastern United States and Texas, will replace ESS Technology Inc. in the S&P SmallCap 600 after the close of trading on Aug. 22. Second, S&P REIT Composite constituent Senior Housing Properties Trust, a REIT that invests in hospitals, nursing homes, senior apartments, independent living properties, and assisted living properties headquartered in Newton, Mass., will replace Shurgard Storage Centers Inc. in the S&P SmallCap 600, and Highland Hospitality Corp., a lodging REIT focused on hotel investments in upscale full-service, premium limited-service and extended stay segments based in McLean, Va., will replace Shurgard in the S&P REIT Composite, after the close of trading on Tuesday, Aug. 22. S&P will monitor these transactions, and post any relevant updates on its website: http://www.standardandpoors.com.

The percentage of first-time buyers in California able to afford a median-priced home stood at 23% in the second quarter of 2006, compared with 30% for the same period a year ago, according to a newly developed index released today by the California Association of Realtors.The minimum household income for first-time buyers needed to purchase a home at $482,000 in California in the second quarter of 2006 was $98,720, based on an adjustable interest rate of 6.48%, assuming a 10% down payment. First-time buyers typically purchase a home equal to 85% of the prevailing median price. The monthly payment including taxes and insurance was $3,290 for the second quarter of 2006. At 39%, the High Desert region was the most affordable region in the state, followed by the Sacramento region at 38%. Santa Barbara was the least affordable region in the state at 14%, followed by San Luis Obispo at 17%. CAR's First-time Buyer Housing Affordability Index measures the percentage of first-time buyer households that can afford to purchase a home in California. CAR also reports first-time buyer indexes for regions and select counties within the state. CAR can be found on the Web at http://www.car.org.

A New York-based merger and acquisitions advisory firm is claiming mortgage companies for sale are undervalued.The chairman and chief executive of RJ Easton, Richard Easton said, "Several privately held mortgage companies are available for acquisition at two to three times their lowest earning before taxes. Compared with like companies that sold during the boom years at five to six times their highest EBT, today's privately held mortgage companies are a bargain at one-third the purchase price. We see the opportunity to acquire healthy mortgage companies now at bargain basement prices." Recently his firm was the advisor for Bay Capital Corp., an Owings Mills, Md.-based retailer and wholesaler that was acquired by Clear Choice Financial, a publicly traded company headquartered in Tempe, Ariz. RJ Easton was an investor in this transaction.

The Market Composite Index, an overall measure of mortgage applications, rose from 553.3 to 561.2 on a seasonally adjusted basis during the week ended Aug. 11, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications increased 0.4% on the week but were down 25.6% from the level recorded a year earlier. The Purchase Index fell from 388.9 to 385.9 on a seasonally adjusted basis, while the Refinance Index increased from 1518.1 to 1587.5. Refinancings represented 39.6% of total applications, up from 38.0% the previous week, while adjustable-rate mortgages accounted for 27.2%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages increased from 6.45% to 6.54, and points (including the origination fee) decreased from 1.01 to 0.98 for loans with 80% loan-to-value ratios, the association reported.

Freddie Mac, McLean, Va., released the results of its Primary Mortgage Market Survey in which the 30-year fixed-rate mortgage averaged 6.52% with an average 0.3 point for the week ending August 17, 2006, down from last week's average of 6.55%.By contrast, the 30-year FRM averaged 6.80% four weeks ago. Last year at this time, the 30-year FRM averaged 5.80%. The average for the 15-year FRM this week is 6.20%, with an average 0.3 point, unchanged from last week. A year ago, the 15-year FRM averaged 5.40%. Five-year Treasury-indexed hybrid adjustable-rate mortgages fell to 6.18% this week, with an average 0.4 point, from last week's rate of 6.21%. A year ago, the five-year ARM averaged 5.34%. One-year Treasury-indexed ARMs averaged 5.65% this week, with an average 0.5 point, was down from last week when it averaged 5.69 %. At this time last year, the one-year ARM averaged 4.58%.

Delinquencies on commercial mortgage-backed securities were down to 0.59% in July, from 0.65% a month earlier, Fitch Ratings, New York, reported.The credit rating agency said that half of the six-basis-point delinquency rate decline stems from the addition of seven new deals totaling $15.2 billion to Fitch's deal universe. The rest of the decline is due to loans becoming less than 60 days delinquent, being paid off, defeased, or liquidated and therefore dropping out of the delinquent universe. And Fitch's "seasoned delinquency index," which includes transactions with at least a year of seasoning, dropped five basis points in July to 0.77%. The rating agency also reported that multifamily properties in the 2003 to 2005 vintages represent over 75% of delinquent loans by balance in those vintages, and almost 50% of the 2002 vintage's delinquencies. This is "significantly higher" than its overall delinquency share for all vintages (30%).

Single-family housing starts declined by 2.3% in July to the lowest level in three years as homebuilders are finally trying to come to grips with a buildup in inventories of new and existing homes.The U.S. Census Bureau reported that SF starts fell from a record seasonally adjusted annual rate of 1.49 million in June to 1.45 million in July -- the lowest level since May 2003. Since June 2005, SF starts are down 16.6% and permits are down 23.5%. "The decline in housing activity has been a little bit sharper than we anticipated," said Michelle Girard, senior economist at RBS Greenwich Capital. RBSGC economists originally forecast a 10% slowdown in housing starts and sales this year and now it looks like it will be 15% decline. "We have not seen bottom yet," Ms. Girard said. But it could be a "positive sign," she added, noting that -- as a result -- housing activity should stabilize more quickly at around late 2003 and early 2004 levels. Despite the slowdown in starts, mortgage lenders that finance new homes should have a good year due to the high level of homes under construction at the end of last year. "We are headed toward a record year in housing completions," National Association of Home Builders economist Michael Carliner said. And he noted that a slowdown in completions is still six months down the road.

The real estate downturn has hit the condo market -- though it's not exactly a blood bath, at least not yet.According to figures compiled by the National Association of Realtors, condominium prices in metropolitan areas fell 0.3% in the second quarter compared to the same quarter a year ago. According to the trade group, the national median existing condo price was $225,800 in the second quarter. Condo markets suffering the most include the MSA of Palm Bay-Melbourne-Titusville, Fla. (down 11.8%), and Toledo, Ohio (down 9.7%). NAR also reported that median prices in the single-family market rose 3.7% in the second quarter. "With more sellers competing for the pool of buyers, the pressure on home prices has evaporated in most metro areas," said NAR chief economist David Lereah. He described the price slowdown and correction as a "soft landing in the housing sector."

KeyCorp, Cleveland, has put its subprime residential lending division, Champion Mortgage, on the auction block.KeyCorp bought the subprime retail lender back in 1997, paying $289 million in stock for the company. A year later the subprime business began a severe correction that lasted about three years. In a statement, bank CEO Henry Meyer said Champion "no longer fits our longer-term strategic priorities." For years KeyCorp has refused to disclose production and servicing information on the Parsippany, N.J.-based company. In a statement it would only say that Champion has a $2.5 billion "loan portfolio." According to estimates made by the Quarterly Data Report, Champion/Key ranks 22nd among subprime servicers and 34th among funders. A few weeks back, another Cleveland bank, National City, disclosed that it might sell its subprime residential division, First Franklin.

Countrywide Home Loans has named Brian Hale as head of its consumer markets division, located in Plano, Texas.In his new role Mr. Hale oversees all sales, operational and support activities of Countrywide's retail division, which includes a network of more than 900 branches nationwide, several call centers and numerous business-to-business channels, the company said. The division employs 16,500 staff members. Mr. Hale joined Countrywide in 2001, serving previously as managing director and chief production officer. Prior to joining Countrywide, he worked at Wells Fargo Home Mortgage, Fleet Mortgage Corp. and Household Finance.

The Mills Corp., Chevy Chase, Md., plans to sell its interests in some overseas properties to Ivanhoe Cambridge, a Canadian property investor, and expects to net about $500 million from the sales.The real estate investment trust is currently in the process of exploring its strategic alternatives, with the help of Goldman Sachs and JP Morgan. The retail properties are located in Ontario, Canada; Glasgow, Scotland; and Madrid, Spain. The Mills Corp. and Ivanhoe Cambridge each currently own 50% of the Ontario and Glasgow properties and Mills is the sole owner of the Madrid property, the real estate investment trust reports. The transaction values the three centers at approximately $1.5 billion, Mills reports. The REIT plans to apply proceeds from the sale to pay down a part of its senior term loan with Goldman Sachs Mortgage Co. The consent of lenders under the senior term loan is required to close the sale and Mills is in the process of seeking such consent.

Class L of First Union-Lehman Brothers-Bank of America Commercial Mortgage Trust commercial mortgage pass-through certificates, series 1998-C2, has been downgraded from Caa2 to Caa3 by Moody's Investors Service.In addition, Moody's upgraded five classes and affirmed the ratings of seven other classes from the transaction. The downgrade was attributed to realized and expected losses from specially serviced loans. Forty-two loans have been liquidated from the trust, resulting in realized losses of approximately $40.3 million, the rating agency said. Nineteen loans, representing 5.1% of the pool, are in special servicing, and Moody's said it estimates that they will result in losses of approximately $4.7 million. The certificates are collateralized by 527 mortgage loans, consisting of conduit loans (54.5%), defeased loans (21.6%), large loans (16.7%), and credit tenant leases (7.2%). Moody's can be found online at http://www.moodys.com.

Class F-1 of Commercial Mortgage Acceptance Corp.'s commercial mortgage pass-through certificates, series 1997-ML1, has been downgraded from Caa1 to Caa3 by Moody's Investors Service.In addition, Moody's upgraded two classes in the transaction and affirmed the ratings on eight others. Moody's attributed the downgrade to a decline in the performance of the Newton Oldacre McDonald Loan, the second-largest loan in the pool. The rejection of leases in three locations by Winn-Dixie and the departure of other anchor tenants have caused a drop in the portfolio's occupancy from 90.2% to 80.9%, the rating agency said. Moody's can be found online at http://www.moodys.com.

Equity One Inc., a real estate investment trust based in North Miami Beach, Fla., has announced the pricing of $125 million of 6.25% senior unsecured notes at 99.517.The notes, due Jan. 15, 2017, have a yield to maturity of 6.315%. The joint book-running managers of the offering are Banc of America Securities LLC; Bear, Stearns & Co.; and Merrill Lynch & Co. Equity One, a shopping center REIT, can be found online at http://www.equityone.net.

Digital Realty Trust Inc., San Francisco, has announced a private placement of $150 million of 4.125% exchangeable senior debentures by its operating subsidiary, Digital Realty Trust LP.The company said that, before July 2026 and upon the occurrence of specified events, the 20-year debentures will be exchangeable at the option of holders into cash and, at the option of the operating subsidiary, shares of common stock of Digital Realty Trust Inc. at an initial exchange rate of 30.6828 shares per $1,000 principal amount of the debentures. The initial purchasers have been granted an option to buy up to $22.5 million of the debentures to cover any overallotments. Digital Realty, a real estate investment trust that specializes in the ownership of technology real estate, can be found online at http://www.digitalrealtytrust.com.

Franklin Credit Management Corp., a New York-based company that specializes in the purchase, servicing, and resolution of performing, re-performing, and nonperforming residential mortgage loans, has announced changes to its borrowing agreements.The company said new term loans will no longer be subject to a 50-basis-point success fee upon payoff, and that its 75-bp origination fee has been reduced to 50 bps. It also reported that its lead lending bank has agreed to reduce the interest rate margin on approximately $475 million of term debt at least 25 bps by Oct. 1 and another 25 bps by Jan. 1. Franklin Credit, which also buys, manages, and sells subprime residential mortgage assets, can be found on the Web at http://www.franklincredit.com.

New York State has the highest mortgage closing costs in the nation, followed by Texas and Hawaii, according to Bankrate Inc.'s 2006 National Closing Cost Survey.The survey found average closing costs of $3,887 in New York, $3,578 in Texas, and $3,407 in Hawaii, compared with $2,713 in Missouri, which had the lowest closing fees among the 50 states and the District of Columbia. In conjunction with the survey, Bankrate commissioned a national poll by Roper asking 1,005 homeowners about their closing costs. Of those surveyed, 13% said they paid more than their lender's estimate, 8% said they paid less, and 60% said their closing costs were about the same as the estimate. "No matter where you live, it pays to shop around," said Daniel P. Ray, editor in chief of Bankrate.com. "Our closing cost estimates, teamed with our mortgage rate table data, provide consumers the knowledge and confidence needed during the home purchasing process." Bankrate's Closing Cost Survey was conducted by obtaining eight to 10 good-faith estimates in each state from the websites of online lenders. To view the survey, go to http://www.bankrate.com/closing.

The average 30-year fixed mortgage rate fell from 6.63% to 6.55% over the seven-day period ended Aug. 10, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate fell from 6.27% to 6.20%, the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages declined from 6.27% to 6.21%, and the average rate for one-year Treasury-indexed ARMs was unchanged, at 5.69%, Freddie Mac reported. Fees and points averaged 0.4 of a point for fixed-rate mortgages and hybrid ARMs and 0.8 of a point for one-year ARMs. "The weaker-than-expected jobs report, combined with the [Federal Reserve Board]'s decision to pass on raising rates at its last meeting, led directly to lower rates this week," said Frank Nothaft, Freddie Mac's chief economist. ".... Lower rates may bring about a rise in refinancing activity as homeowners with ARMs getting ready to reset decide to take advantage by locking into fixed-rate mortgages now rather than waiting until the adjustment date, when rates may be higher." A year ago, the average 30-year and 15-year fixed rates were 5.89% and 5.47%, respectively, and the average hybrid and one-year ARM rates were 5.40% and 4.57%, respectively, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

Fannie Mae and Freddie Mac are not likely to regain their former dominance over the secondary mortgage market, according to a blueprint for the future prepared by a blue-ribbon panel of lending industry leaders.The Council to Shape Change also believes that elimination of the mortgage interest tax deduction would have a major impact on people who already own homes but would not substantially alter the playing field for future homebuyers. "There would not be a fundamental change in the manner in which borrowers finance the purchase of a home," the committee says in a wide-ranging report entitled "Outlook for the Real Estate Industry." The 182-page tome is the product of six months of meetings, deliberations, and freewheeling debate among the council's 19 members, who were appointed last October by MBA chair Regina Lowrie to help prepare the industry for expected changes over the next 10 years. The panel focused on what's likely to happen rather than what "should" happen, the report says. "This is not a policy document -- it has nothing to do with policy," said council leader Andrew Woodward, the retired chairman of Bank of America Mortgage and a former MBA chairman. "We are simply forecasting how things might shake out." The council predicts that the private-label market for residential and commercial mortgages will continue to grow significantly, regardless of what lies ahead for the government-sponsored enterprises. Fannie and Freddie will continue to focus on long-term fixed-rate products, and will rise to the occasion when there is a shock to the economy. But whenever the market drifts away from the GSEs' "sweet spot," the private-label sector's share of issuances will increase, the report says.