Originations

At least one major lender, Bank of America, has a totally no-cost loan on its drawing board, a BoA executive told a gathering of the country's real estate writers in Charlotte, N.C., over the weekend."I know it's a revolutionary change, but I truly believe that's where the market's going," Floyd Robinson said at the National Association of Real Estate Editors' annual conference. Mr. Robinson, who is president of consumer real estate and insurance services at BoA, said the myriad of closing costs and fees now attached to home loans only serve to confuse borrowers, and promised that the bank's no-fee loans would have the same annual percentage rates at those with fees so borrowers could readily see there would be no hidden charges. He also said the big Charlotte-based bank is considering offering to refinance its customers' mortgages without charge. "All they'll have to do is call the servicing department and it's done," he said. BoA thinks it has enough economies of scale and clout with service providers to offer no-cost loans, an executive with the bank said. But even if the bank has to take a loss to originate such a mortgage, he explained, it will be worth it to get customers in the door so it can start building banking relationships with them. NAREE can be found online at http://www.naree.org.

Jerry Schiano, president and chief executive officer of Wilmington Finance, Plymouth Meeting, Pa., has left the company, industry sources have confirmed to MortgageWire.Neither Mr. Schiano nor Wilmington Finance could be reached for comment by deadline time. A subprime lender, Wilmington Finance is a subsidiary of insurance giant American International Group. A receptionist at Wilmington Finance had no information on Mr. Schiano, but said the new CEO is George Roach.

Tony Meola, the production chief for Washington Mutual Inc., Seattle, has resigned from the company, accepting a position with competitor New Century Financial Corp., Irvine, Calif.A spokeswoman for WaMu, the nation's third-largest residential lender, confirmed his departure to MortgageWire on Friday. Mr. Meola, who served as executive vice president of WaMu's home loan production unit, will hold a similar title at New Century, the nation's second-largest subprime funder. New Century released a statement on Monday saying it had hired Mr. Meola. The executive will be charged with expanding the company's national production franchise and broadening its product menu. "He's known as a problem solver," said one executive familiar with his career.

Standard & Poor's has announced plans to replace three real estate investment trusts in the S&P REIT Composite index.Digital Realty Trust, a San Francisco-based technology REIT, will replace MeriStar Hospitality in the REIT index after the close of trading May 2 because MeriStar is being acquired by The Blackstone Group and affiliates, S&P said. Sunstone Hotel Investors Inc., a San Clemente, Calif.-based lodging REIT, will replace Arden Realty in the index, also after the close of trading May 2, because Arden is being acquired by GE Real Estate. And First Potomac Realty Trust, a Bethesda, Md.-based industrial and flex-property REIT, is replacing Bedford Property Investors Inc. after the close of trading May 3 because Bedford is being acquired by an affiliate of LBA Realty LLC. S&P can be found online at http://www.standardandpoors.com.

Technology Credit Union, San Jose, Calif., has announced the introduction of a line of customized home loans and lines of credit for California homebuyers and investors.The product line includes the HLPR program, which enables first-time homebuyers to qualify for loans of up to $700,000 with as little as 3% down and no mortgage insurance requirement, Tech CU said. For investors interested in buying a building that includes apartment units and retail space, the Mixed-Use program offers financing of up to $7.5 million on properties with five or more units. Line-of-credit products include Prime Advantage, a one-year fixed-rate home equity line of credit designed to offer peace of mind amid rising interest rates, and Apartment Lines of Credit, a stand-alone product aimed at apartment owners seeking to improve cash flow, remodel, or buy new investments. The credit union can be found online at http://www.techcu.com.

Public Storage Inc., Glendale, Calif., has priced a public offering of 18 million depositary shares, each of which represents one-thousandth of a share of series I 7.25% cumulative preferred stock, at $25 per share.The real estate investment trust said gross proceeds are expected to total $450 million. The joint book-running managers for the public offering were Citigroup Global Markets Inc., Merrill Lynch & Co., Morgan Stanley, and Wachovia Securities. The REIT can be found online at http://www.publicstorage.com.

Hersha Hospitality Trust, a Philadelphia-based real estate investment trust, has announced the pricing of a public offering of 6.52 million shares of common stock at $9 per share.The hotel REIT said the estimated net proceeds of $55.2 million are expected to be used to repay debt, fund acquisitions and development loans, and for general corporate purposes. UBS Investment Bank and Merrill Lynch & Co. are the joint book-running managers of the offering. The company said it has granted the underwriters an option to buy up to 978,000 additional shares to cover any overallotments. Hersha can be found on the Web at http://www.hersha.com.

Ventas Realty LP has closed a new $500 million unsecured revolving credit facility, according to Ventas' parent company, Ventas Inc., Louisville, Ky.The facility is initially priced at 75 basis points over the London interbank offered rate, compared with the pricing of LIBOR plus 145 bps on its previous $300 million secured credit facility. The new facility matures in 2009 and includes a one-year extension option, as well as a $100 million accordion feature that permits Ventas to expand its borrowing capacity to $600 million. The joint lead arrangers for the facility were Banc of America Securities LLC and Calyon Corporate and Investment Bank. Ventas Inc., a health care real estate investment trust, can be found online at http://www.ventasreit.com.

Kilroy Realty Corp., Los Angeles, has increased the size of its unsecured revolving credit facility to $550 million and extended its term to April 2010.The facility is priced at 85-135 basis points over the London interbank offered rate, depending on the company's leverage ratio at the time of borrowing. The facility was syndicated to a group of 19 U.S. and foreign banks led by J.P. Morgan Securities Inc. and Banc of America Securities LLC. Kilroy, an office and industrial real estate investment trust, can be found online at http://www.kilroyrealty.com.

The National Association of Mortgage Brokers has announced the signing of a memorandum of understanding with PRBC, a national credit bureau, to educate consumers on how to document their creditworthiness with commonly recurring bill payments."It is estimated that more than 70 million Americans make rental, mortgage, and other recurring bill payments that are not reported to traditional credit bureaus," said Michael Nathans, founder and chairman of PRBC. "As a result, these consumers often have lower credit scores than they should, and pay more for housing, credit, and insurance than they deserve." The organizations said the partnership will educate mortgage brokers in how to enroll low- and no-credit-score prospects in the PRBC service and to qualify more applicants for affordable homeownership and better rates on auto loans and insurance. The organizations can be found online at http://www.namb.org and http://www.prbc.com.

Countrywide Financial Corp., Calabasas, Calif., has reported net earnings of $683.5 million ($1.10 per share) for the first quarter, a 1% decline from $688.9 million ($1.13 per share) in the first quarter of 2005.Pretax earnings by the company's mortgage production sector rose from $102 million in the fourth quarter to $284 million, chiefly as a result of improved gain-on-sale margins, the company said. However, these earnings were down dramatically from $735 million a year earlier because of higher interest rates and a flatter yield curve, according to Countrywide. Angelo R. Mozilo, Countrywide's chairman and chief executive officer, said the production sector's pretax margin rose to 30 basis points in the first quarter, compared with 9 bps in the fourth quarter. The loan servicing sector produced $249 million in pretax earnings, up from $17 million a year earlier, the company reported. Countrywide can be found online at http://www.countrywide.com.

The average 30-year fixed mortgage rate rose from 6.53% to 6.58% over the seven-day period ended April 27, representing its highest level since June 2002, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate rose from 6.17% to 6.21%, the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages increased from 6.16% to 6.21%, and the average rate for one-year Treasury-indexed ARMs climbed from 5.63% to 5.68%, 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 0.7 of a point for one-year ARMs. "Indications of a stronger economy gave rise to an increase in mortgage rates this week," said Frank Nothaft, Freddie Mac's chief economist. "Consumer confidence and existing-home sales unexpectedly rose. Much of this strength is attributed to a healthy labor market, which translates into greater consumer spending. This should support an active housing market over the next few months." A year ago, the average 30-year and 15-year fixed rates were 5.78% and 5.33%, respectively, and the average one-year ARM rate was 4.21%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

The nation's homebuilders are reporting that purchase cancellation rates are up and that housing speculators are walking away from properties, according to the industry's leading trade group.At a forecast conference Thursday morning, National Association of Home Builders economist David Seiders told the audience: "I want speculators out of the business, and so do builders." He added, however, that the industry doesn't want speculators dumping properties back on the market. The NAHB is forecasting a slight decline in new-home sales this year and an 8% decline in existing units. "I'm starting to worry about rates," he said, noting that 30-year conventional fixed-rate mortgages could rise to 6.7% by year-end. Speaking at the same conference, J.P. Morgan Chase economist Jim Glassman said housing has shifted "from a seller's market to a buyer's market."

Fidelity National Financial Inc., Jacksonville, Fla., has sent a proposal to two majority-owned firms -- Fidelity National Information Services Inc. and Fidelity National Title Inc. -- that would result in the creation of two independent public companies.Under the proposal, FNF would totally divest itself of FNIS through a series of transactions. These include the sale of Sedgwich CMS Inc. to FNT in exchange for stock in FNT; the spinoff of FNF's ownership position in FNT to FNF shareholders, leaving FNF's ownership stake in FNIS as its only asset; merging FNF and FNIS, with FNIS as the surviving entity; and finally, renaming FNT as FNF and trading under that ticker symbol. "While we were hopeful that the holding company structure, with FNF having ownership stakes in public and private operating subsidiaries, would allow for a simpler valuation of the pieces of FNF, that simply has not proven to be the case, as the market has meaningfully discounted the value of FNF in relation to the sum of its parts," said William P. Foley, chairman and chief executive of FNF and chairman of FNIS and FNT. Mr. Foley said FNF's majority stake in the other two companies "limits the public float for each company, which may be significantly shrinking the universe of eligible shareholders" for FNT and FNIS and "limiting the trading liquidity, and thus the valuation" of the companies' stock.

Capital Lease Funding, New York, has priced a public offering of 5 million shares of its common stock at $10.55 per share.The company said it has granted the underwriters an option to buy up to 750,000 additional shares to cover any overallotments. The joint book-running managers for the offering are Friedman Billings Ramsey and Wachovia Securities.

Spectrus Real Estate Group, a company specializing in the sale of tenants-in-common ownership in commercial, retail, and industrial properties and undeveloped land, has been formed in Boise, Idaho.Spectrus said it was recently launched by "the leaders behind FOR 1031," which it termed the company that pioneered the TIC industry. FOR 1031 has become a part of Spectrus, which will continue to offer the former's signature triple-net-lease product, FOR 1031 NNN Plus, along with an expanded group of real estate investment products. Spectrus said the product line includes Replacement Properties for 1031 Exchanges (tax-deferred real estate exchanges under Sec. 1031 of the Internal Revenue Code), Spectrus Undeveloped Land, Spectrus Projected Income Properties, and Spectrus Ground Lease. Spectrus can be found online at http://www.spectrusgroup.com.

The Market Composite Index, an overall measure of mortgage applications, fell from 569.6 to 548.6 on a seasonally adjusted basis during the week ended April 21, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications decreased 3.2% on the week and were down 22.4% from the level recorded a year earlier. The Purchase Index fell from 407.4 to 389.4 on a seasonally adjusted basis, while the Refinance Index declined from 1526.1 to 1489.4. Refinancings represented 36.7% of total applications, up from 36.4% the previous week, while adjustable-rate mortgages accounted for 28.2%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages decreased from 6.56% to 6.53%, and points (including the origination fee) remained at 1.10 for loans with 80% loan-to-value ratios, the association reported. The MBA can be found on the Web at http://www.mortgagebankers.org.

The top commercial and multifamily loan originators for 2005 were Wachovia, Wells Fargo, and Capmark Financial Group (previously GMAC Commercial Mortgage), according to the Mortgage Bankers Association.Others in the top 10 list, based on the MBA's annual origination volume report, are: HFF; KeyBank REC; CBRE/Melody; Lehman Brothers; Column Financial/Credit Suisse; Bank of America; and PNC Real Estate Finance. Doug Duncan, the trade association's chief economist, said 2005 was a record year for commercial/multifamily originators, adding that the MBA listings "show the breadth and depth of those doing business in this expanding market." The MBA report also lists originators by investor groups. Wachovia was the top originator for commercial bank/savings institutions and conduits; Capmark Financial Group for Freddie Mac and FHA/Ginnie Mae investors; MetLife for life insurance companies; Deutsche Bank Berkshire for Fannie Mae investors; TIAA-CREF for pension funds; Cohen Financial for credit companies; Key Bank for real estate investment trusts, investment funds, and other investors; and Tremont Realty Capital for specialty finance companies.

Fannie Mae needs to "do more" so that working families trying to afford a home have an alternative to exotic mortgages, according to the mortgage giant's top executive.Being a low-risk enterprise does not mean "avoiding risk entirely," Fannie Mae president and chief executive Daniel Mudd told a National Association of Realtors regional summit. "Our job is to look deeply into our mortgage data and try to stretch our tolerances so that we can serve more people who need serving the most -- working families struggling to own or rent a home," Mr. Mudd said. He noted that borrowers are choosing interest-only and payment-option adjustable-rate mortgages so they can "squeeze" into a house. "But there's a problem here, of course. For working families, exotic mortgages can be a poison apple," he said, as the mortgages reset and the monthly payment goes up. Fannie Mae can be found online at http://www.fanniemae.com, and the NAR can be found at http://www.realtor.org.

New-home sales rebounded 13.8% in March and exhibited new strength despite rising mortgage rates and growing inventories of unsold homes.The U.S. Census Bureau reported that the sales of new single-family homes jumped from a seasonally adjusted annual rate of 1.07 million in February to 1.21 million in March. Sales numbers for January and February were revised downward. "Thank God we got the rebound," said David Seiders, chief economist of the National Association of Home Builders. "It will quell some gathering thinking about whether or not the housing market is in the process of collapsing." The NAHB economist said the housing market is now in a "reasonably orderly slowing-down process" and that at the end of this year new-home sales should be down 11% from last year's record pace. The Census Bureau report shows first-quarter sales off 8.2% from those of the first quarter of 2005.