Originations

Kite Realty Group Trust, Indianapolis, will replace CarrAmerica Realty Corp., Washington, in the S&P REIT Composite Index after the close of trading on July 11, Standard & Poor's has announced.S&P said the reason for the change is that CarrAmerica is being acquired by an affiliate of The Blackstone Group. Kite Realty owns, develops, leases, and manages a portfolio of neighborhood and community shopping centers. S&P can be found online at http://www.standardandpoors.com.

CapitalSource Inc., Chevy Chase, Md., has reported a $595 million increase in its committed credit facilities.The increase includes a $500 million initial commitment from Citigroup Global Markets Realty Corp. aimed chiefly at funding CapitalSource's growth in real estate and real-estate-related assets, the company said. In addition, CapitalSource's senior unsecured credit facility has been increased by $95 million, to $640 million. The company can be found online at http://www.capitalsource.com.

As expected, Brad A. Morrice has assumed the title of chief executive officer at New Century Financial Corp., an Irvine, Calif.-based real estate investment trust.Mr. Morrice, who will continue as the company's vice chairman and president, succeeds Robert K. Cole, who remains as New Century's chairman. The company announced the planned transition, effective July 1, in February. New Century can be found online at http://www.ncen.com.

Mortgage companies reduced their payrolls by 1,600 full-time positions during May as refinancing activity ratcheted down from nearly 50% of originations in the first quarter.The U.S. Bureau of Labor Statistics reported that employment in the mortgage banker/broker sector fell from 501,600 in April to 500,000 in May. Employment in the mortgage sector hit a 12-month high of 504,800 in February, when refinancings were running at 49% of originations. In May, refi applications as a percentage of total originations dropped into the mid-30s, according to the Mortgage Bankers Association's mortgage application survey. The latest BLS employment report shows that the U.S. economy created 121,000 new jobs in June, compared with 92,000 in May. (There is a one-month lag in reporting mortgage industry employment data.) The BLS reported that construction employment was "essentially unchanged for the fourth consecutive month" and that there has been "little job growth" in the financial services sector for the second month in a row. The BLS can be found online at http://stats.bls.gov.

Wells Fargo Home Mortgage, Des Moines, Iowa, has announced a joint venture with Florida-based WCI Mortgage that will originate, process, and fund mortgage loans in Florida for WCI's customers and others.Susan Walker, a veteran of the mortgage industry, has been named president of the joint venture, which will be called WCI Mortgage, an affiliate of Wells Fargo Home Mortgage. The venture will also service Prudential Florida WCI Realty, which has approximately 60 locations throughout Florida. Wells Fargo Home Mortgage can be found online at https://www.wellsfargo.com/mortgage. WCI Mortgage is a subsidiary of WCI Communities Inc., a homebuilder that can be found online at http://www.wcicommunities.com.

The Market Composite Index, an overall measure of mortgage applications, rose from 529.6 to 561.0 on a seasonally adjusted basis during the week ended June 30, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications increased 5.9% on the week and were down 33.3% from the level recorded a year earlier. The Purchase Index rose from 389.0 to 414.2 on a seasonally adjusted basis, while the Refinance Index climbed from 1356.0 to 1423.9. Refinancings represented 35.0% of total applications, down from 35.3% the previous week, while adjustable-rate mortgages accounted for 29.5%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages decreased from 6.86% to 6.80%, and points (including the origination fee) increased from 1.10 to 1.13 for loans with 80% loan-to-value ratios, the association reported.

The average 30-year fixed mortgage rate inched up from 6.78% to 6.79% over the seven-day period ended July 6, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate rose from 6.43% to 6.44%, the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages was unchanged, at 6.39%, and the average rate for one-year Treasury-indexed ARMs crept up from 5.82% to 5.83%, Freddie Mac reported. Fees and points averaged 0.5 of a point for fixed-rate mortgages, 0.6 of a point for hybrid ARMs, and 0.8 of a point for one-year ARMs. "Since last week's rate increase by the Federal Reserve came as no great surprise, mortgage rates remained nearly unchanged from [those of] the previous week," said Frank Nothaft, Freddie Mac's chief economist. "This is fairly consistent with our economic outlook, which continues to forecast that the interest rate for the 30-year fixed-rate mortgage will gradually drift upward, but should remain under 7% for the year." A year ago, the average 30-year and 15-year fixed rates were 5.62% and 5.20%, respectively, and the average one-year ARM rate was 4.33%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

A leading indicator of existing-home sales edged up 1.3% in May, signaling that the housing market may be stabilizing after a long but gradual decline, according to the National Association of Realtors.The NAR's pending sales index rose from 111.9% in April to 113.4 in May. However, the index has been trending downward over the past eight months and is down 10.1% since May 2005. "The slight change in pending home sales indicates the market is beginning to level off," said NAR chief economist David Lereah. "We are entering the second phase of the transition period from the housing boom, in which sellers are becoming more realistic about their expectations -- sales are stabilizing and annual home price appreciation is returning to historic norms." Pending sales indicate that a contract has been signed and the sale is within one or two months of closing.

Triad Guaranty Inc., a mortgage insurer based in Winston-Salem, N.C., has announced its inclusion in the new NASDAQ Global Select Market.Triad said the market has the highest initial listing standards of any exchange in the world, based on financial and liquidity requirements. Before the relisting, Triad had been listed on the NASDAQ National Market. Beginning July 3, companies listed on NASDAQ markets were reclassified into three tiers: the NASDAQ Global Select Market, the NASDAQ Global Market, and the NASDAQ Capital Market. The companies can be found online at http://www.triadguaranty.com and http://www.nasdaq.com.

CB Richard Ellis Group Inc., Los Angeles, has announced the acquisition of The Polacheck Co., a full-service commercial real estate services firm in Wisconsin, for approximately $20 million.Polacheck employs a staff of 117 in three offices. CBRE said the acquisition reflects its strategy of purchasing affiliate companies to extend the company's presence in key markets across the country. CBRE can be found on the Web at http://www.cbre.com.

Phoenix Realty Group, New York, has announced the formation of the $250 million Metropolitan Workforce Housing Fund to provide market rate housing to middle-income families and commercial development to communities in New York, New Jersey, and Connecticut that are in need of revitalization.J. Michael Fried, founder and chief executive officer of PRG, said the fund's capital will be leveraged to provide over $1 billion of residential and commercial development. "At a time when the tri-state region has experienced significant growth in jobs and population and tremendous inflation in housing costs, it's essential to increase the availability of housing that is affordable to the key middle-income work force, including teachers, office workers, firefighters, and police," said Keith Rosenthal, president and co-founder of PRG. The company can be found online at http://www.phoenixrg.com.

IndyMac Bancorp Inc., Pasadena, Calif., has announced that it will increase its ownership stake in Financial Freedom Senior Funding Corp. from 93.75% to 100%, a change in direction from an earlier move to consider going public with the subsidiary.IndyMac said it decided to change course after announcing in May that its board had authorized management to plan for an initial public offering of Financial Freedom shares. "After thorough analysis, we determined that it is in the best interest of our shareholders for IndyMac to keep Financial Freedom as a wholly owned subsidiary focused on the senior market," said Michael W. Perry, IndyMac's chairman and chief executive officer. "This will allow us to fully leverage IndyMac's systems, infrastructure, and mortgage banking expertise in a way that will enable Financial Freedom to remain a highly profitable and dominant player in the fast-growing but ever more competitive reverse mortgage market." IndyMac Bank can be found online at http://www.indymacbank.com.

Bank Mutual Corp., Milwaukee, has hired Thomas H. Koepp as director of investment real estate lending for its Bank Mutual subsidiary bank.Mr. Koepp will have overall responsibility for the origination of "investment real estate mortgage loans" and for the development and implementation of investment real estate mortgage lending objectives, policies, and practices, Bank Mutual said. "Tom has a proven track record and will have a major impact on achieving our strategic goals in the important investment real estate lending line of business," said Michael T. Crowley Jr., chairman and chief executive officer of Bank Mutual Corp. Mr. Koepp has over 25 years of experience in investment real estate lending, according to Bank Mutual, and joins the bank from the Milwaukee-based St. Francis Bank division of MAF Bancorp, where he was most recently a vice president in the commercial real estate finance area.

The Eleventh Federal Home Loan District Cost of Funds Index stands at 3.884% for May, an increase of over 12 basis points from 3.759% in April.Several recent surveys noted that the 30-year fixed mortgage rate was at its highest point in four years. Similarly, COFI is at its highest level since October 2001, when the index stood at 3.628%. It is likely that COFI will continue to rise because the index is a weighted average of what it costs thrifts in California, Arizona, and Nevada to obtain money to originate mortgages. That includes the deposits these institutions gather. As the Federal Reserve Board continues to raise the federal funds rate (the rate banks charge each other for overnight loans), institutions have been increasing the amount they pay for deposits. On top of that, because COFI is a weighted average, it lags movements in other rates by three to six months.

The dollar volume of new primary mortgage insurance written rebounded in May from the dismal numbers recorded in April, according to data collected by the Mortgage Insurance Companies of America.During the month, the group's members wrote $13.0 billion of traditional mortgage insurance and $5.2 billion of bulk, for a total of $18.2 billion, up 34% from that of April. In the traditional category, the industry had its best month of the year so far. Application volume for mortgage insurers increased by 25%, from 101,070 in April to 126,608 in May. The volume of new pool risk written rose from $22.0 million in April to $59.5 million in May. However, the cure/default ratio slipped significantly in May, from 98.0% in April to 71.0%, with 29,433 cures and 41,450 defaults reported during the month. MICA can be found online at http://www.micanews.com.

Monmouth Real Estate Investment Corp., Freehold, N.J., has announced the closing of a new $25 million line of credit.Monmouth, a real estate investment trust that specializes in net-leased industrial properties, said $20 million of the line is designated for property acquisitions and $5 million will be used as working capital. The LOC was provided by North Fork Bank, Melville, N.Y.

Grubb & Ellis Co., a Northbrook, Ill., commercial real estate services firm, has priced the sale of 10 million shares of its common stock at $9.50 per share.The company said the shares would be sold by the company and its majority-controlling stockholder. Deutsche Bank Securities Inc. is the sole book-running manager of the offering. Grubb & Ellis said it has granted the underwriters an option to buy up to 1.5 million additional shares to cover any overallotments. The company can be found online at http://www.grubb-ellis.com.

Highwoods Properties Inc., a real estate investment trust based in Raleigh, N.C., has reported that its board of directors recently rejected an unsolicited proposal from Capital Partners Inc. to acquire the company.Ed Fritsch, president and chief executive officer of Highwoods, said the board rejected the proposal because it believes that remaining independent and executing the REIT's strategic management plan is the best course of action for the company. Highwoods can be found on the Web at http://www.highwoods.com.

Accredited Home Lenders Holding Co., a San Diego-based mortgage company specializing in nonprime residential mortgage loans, has announced an agreement to absorb the wholesale operations of Aames Investment Corp., Los Angeles, in advance of the companies' planned merger.Accredited said the move, expected to be completed by mid-July, is designed to reduce employee attrition and "maximize the expected synergies" from the combination of the companies' wholesale operations. Accredited has approximately 1,300 employees in its wholesale operations and Aames, a mortgage real estate investment trust, has 225. Accredited said it will make offers to employ Aames' wholesale sales personnel and certain processing personnel. "This move allows us to expedite the restructuring of the wholesale platform announced previously by Aames and provide training and additional products to the Aames sales and sales support staffs," said James Konrath, Accredited's chairman and chief executive officer. The companies can be found online at http://www.accredhome.com and http://www.aames.com.

The monetary policy-making committee of the Federal Reserve Board has once again raised the federal funds rate by 25 basis points, noting that inflation concerns have persisted despite the gradually cooling housing market and other signs that economic growth is moderating."Ongoing productivity gains have held down the rise in unit labor costs, and inflation expectations remain contained," the Federal Open Market Committee said June 29. "However, the high levels of resource utilization and of the prices of energy and other commodities have the potential to sustain inflation pressures." Stephen Stanley, chief economist at RBS Greenwich Capital, said the Fed in its statement "is telling all the pundits who are squawking about overtightening that 'Yeah, we know that the economy may be slowing down, but it doesn't matter until we make sure that inflation is under control'." The Fed can be found on the Web at http://www.federalreserve.gov.