Originations

Two publicly traded mortgage lenders -- one prime, the other subprime -- are delaying financial disclosures because of valuation and accounting concerns.PHH Corp., Mt. Laurel, N.J., which owns the nation's 10th-largest servicer, said it will not file its annual 10-K statement with the Securities and Exchange Commission on March 16 as originally scheduled. At MortgageWire's deadline on Thursday, PHH's shares were trading down 16%, at $24.17. Fitch Ratings placed the company on Rating Watch Negative. PHH gave several reasons for the holdup, saying it needs more time to document and analyze goodwill, intangibles, and "certain tax assets." Meanwhile, Saxon Mortgage, Glen Allen, Va., a top-40-ranked subprime funder, is delaying is fourth-quarter and full-year results for several weeks as management reviews its application of Statement of Financial Accounting Standards No. 133, accounting for derivatives and hedging.

Sen. Christopher Bond, R-Mo., is throwing cold water on Bush administration proposals to revive the Federal Housing Administration single-family program, and he suggested Thursday that it may be time to shut down or privatize the FHA."Maybe it is time to close out FHA mortgage insurance for single families or re-establish FHA as a private government corporation," Sen. Bond said at an appropriations subcommittee hearing on the Department of Housing and Urban Development's budget. The chairman of the HUD appropriations subcommittee noted that the FHA's share of the mortgage market has declined to 4% and its default rate is above 6% -- and he questioned whether the FHA is "needed any more." To revive the federal mortgage insurance program, the FHA wants congressional approval to charge risk-based insurance premiums so it can offer subprime borrowers safer and lower-cost loans. "This will help more low-income families own and keep their homes," HUD Secretary Alphonso Jackson testified. But Sen. Bond complained that the FHA would take on more risk under the new risk-based premiums.

The slow but steady rise in the Eleventh Federal Home Loan District Cost of Funds Index continued in January, according to the Federal Home Loan Bank of San Francisco.The index rose just over 5 basis points in January, from 3.296% in December to 3.347%. This was the smallest increase in COFI since last summer, when the index went up 8 bps in July. Since then, it has gone up by 11.3 bps in August, 10.2 bps in September, 10.2 bps in October, 10.6 bps in November, and 10.6 bps in December. The January index is at its highest point in over four years. The last time it was at this level was in November 2001, when it stood at 3.368%.

Fieldstone Mortgage Co., Columbia, Md., has announced a name change for nine East Coast retail branch offices that had been operating under the d/b/a of Broad Street Mortgage Co.The offices will now operate under the Fieldstone Mortgage name, the company said. The offices are in Tampa, Fla., the Maryland towns of Bethesda, Havre de Grace, Lexington Park, Rockville, Upper Marlboro, and Waldorf, and the Virginia towns of Manassas and Virginia Beach. Fieldstone Mortgage is a wholly owned subsidiary of Fieldstone Investment Corp., which can be found on the Web at http://www.fieldstoneinvestment.com.

New Century Bank, Dunn, N.C., has announced the formation of a separate mortgage division under the name NC Bank Mortgage to avoid confusion with New Century Mortgage, the wholesale mortgage division of New Century Financial Corp., Irvine, Calif."We recently were made aware that there is a mortgage company with a name similar to ours," said John Q. Shaw, president and chief executive officer of New Century Bank. "In order to avoid any confusion, and because the mortgage area of our bank is important to us and to our customers, we created a division of the bank to handle our mortgage lending function and gave it its own name." The mortgage division is headed by Sandra Heath. The bank can be found online at http://www.newcenturybanknc.com.

Delta Financial Corp., Woodbury, N.Y., has reported earnings of $5.7 million ($0.27 per share) for the fourth quarter, up from $215,000 ($0.01 per share) a year earlier.However, the company said it took a $1.7 million pretax charge for probable hurricane-related losses. This was partially offset by adding $1.3 million of pretax income related to cumulative adjustments from prior periods with respect to Statements of Financial Accounting Standards Nos. 91 and 133. For the full year, Delta had net income of $18.0 million ($0.84 per share), up from a loss of $9.3 million ($0.51 per share) for 2004. The loss was a result of Delta's shifting from gain-on-sale accounting to portfolio accounting in the first quarter of 2004. For the fourth quarter of 2005, Delta had record loan originations of $1.1 billion, up 45% from the same period last year and 7% from the third quarter of 2005. For the full year, it did $3.8 billion in production, also a record. Company president and chief executive Hugh Miller said Delta expects loan volume to grow by at least 15% this year. Delta can be found online at http://www.deltafinancial.com.

The Market Composite Index, an overall measure of mortgage applications, fell from 578.5 to 571.5 on a seasonally adjusted basis during the week ended Feb. 24, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications decreased 9.6% on the week and were down 18.9% from the level recorded a year earlier. The Purchase Index fell from 408.7 to 400.8 on a seasonally adjusted basis, while the Refinance Index climbed from 1571.4 to 1573.5. The four-week moving average for the Purchase Index fell from 415.3 to 406.6, and the comparable average for the Refinance Index fell from 1676.6 to 1633.2. Refinancings represented 38.1% of total applications, down from 38.2% the previous week, while adjustable-rate mortgages accounted for 28.3%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages decreased from 6.22% to 6.18%, and points (including the origination fee) fell from 1.23 to 1.19 for loans with 80% loan-to-value ratios, the association reported. The MBA can be found online at http://www.mortgagebankers.org.

Central Pacific Mortgage, Folsom, Calif., has announced that it is acquiring the mortgage production operations, including the retail branch offices and wholesale production platform, of Ivanhoe Financial Inc., Orlando, Fla.The terms of the deal were not disclosed. The company will operate as Ivanhoe Mortgage and maintain its Orlando offices, CPM said. "In the past, Central Pacific Mortgage's primary focus has been on the West Coast," said John Courson, CPM's president and chief executive officer. "Ivanhoe has a great footprint on the East Coast and will allow us to increase our presence there." CPM said its growth strategy includes expanding Ivanhoe's production network by opening new retail offices in the East and expanding its wholesale business through the addition of account executives. CPM can be found online at http://www.centralpacificmortgage.com.

Highland Hospitality Corp., a real estate investment trust based in McLean, Va., has closed on a three-year, $150 million unsecured revolving credit facility.Highland said the facility will replace its $100 million secured term loan facility, which was fully drawn at the time of closing. The interest rate on the new facility will be based on grid pricing, with a range of 150 to 225 basis points above the London interbank offered rate. Wells Fargo Bank was the administrative agent and sole lead arranger of the facility. The REIT can be found on the Web at http://www.highlandhospitality.com.

Thomas Litzler has been named executive vice president for development and new business initiatives at Ramco-Gershenson Properties Trust, a real estate investment trust based in Farmington Hills, Mich.The shopping center REIT said Mr. Litzler will oversee the development of new shopping centers. The company can be found online at http://www.rgpt.com.

More lenders will be able to use new bilingual tools designed to bring Spanish-speaking borrowers to the marketplace thanks to a partnership between Freddie Mac and Wolters Kluwer Financial Services, Minneapolis.WKFS said the effort is in the initial stages of preparing bilingual mortgage documents and developing educational brochures that are expected to help reduce barriers to understanding the mortgage lending process. The company's loan origination system provider, Dynatek, is one of the partners involved in selecting and inserting data into various conventional mortgage loan documents. In addition to bilingual origination and loan closing documents created in collaboration with Freddie Mac, the informational brochure, "A Home Buyer's Guide to the Mortgage Process and Paperwork," will also be available to customers. Freddie Mac vice president Tricia McClung said Freddie is working with lenders "to help them increase homeownership among the fastest-growing segment of the population, Hispanic-Latino families."

BentleyForbes, a Los Angeles-based commercial real estate investment and operations company, has announced its entry into the resort and hotel market with the formation of an independent operating affiliate, BentleyForbes Hospitality Group LLC.The new affiliate will employ its own team of analysts and sector specialists as well as consulting the capital market experts and legal counsel of BentleyForbes, the company said. Chris Pfohl has been named executive vice president of BentleyForbes Hospitality and will oversee its investment program and operations, the company said. BentleyForbes can be found online at http://www.bentleyforbes.com.

Grubb & Ellis Realty Advisors, Northbrook, Ill., has priced an initial public offering of approximately 20.8 million units at $6 per unit, for expected total proceeds of about $106 million after underwriting discount and commissions.Each unit consists of one share of common stock of the company, an affiliate of Grubb & Ellis Co., and two warrants that give the holder the right to buy one share per warrant at a price of $5 each. In a filing with the Securities and Exchange Commission, Grubb & Ellis Realty Advisors reported that it will focus primarily on industrial and office property and assets. The company said it will concentrate on secondary and tertiary geographic markets, as well as the suburbs close to major metropolitan markets, believing that these markets offer opportunities to buy underperforming properties that can be repositioned. Deutsche Bank Securities, the underwriter of the offering, has an option to buy up to another 3.125 million units from the company to cover any overallotments. The units began trading Feb. 28 on the American Stock Exchange under the symbol GLA.U.

Wells Fargo Home Mortgage, Des Moines, Iowa, and Dominion Homes, a homebuilder based in Dublin, Ohio, have announced plans to form a joint venture that will originate and fund mortgage loans for Dominion customers and the general public.Wells Fargo said it will hold a majority interest in the yet-to-be-named venture, which will operate as a mortgage bank originating and funding loans for central Ohio, Kentucky, and Indiana. It will eventually replace Dominion's mortgage affiliate, Dominion Homes Financial Services. The joint venture will use Wells Fargo's underwriting, compliance, and loan processing services. The companies can be found online at http://www.wellsfargo.com and http://www.dominionhomes.com.

ECC Capital Corp., Irvine, Calif., saw its share price get clobbered Feb. 27 after the subprime lender revealed that it would not pay a dividend for the first quarter of 2006.The lender blamed the dividend policy on "losses in its mortgage banking segment." The lender's general counsel declined to discuss the matter with MortgageWire. Its shares closed down 28%, to $1.36 a share, on Feb. 27. ECC, a real estate investment trust, trimmed 440 full-timers in early January, about 27% of its work force. ECC, the parent of Encore Credit Corp., went public a year ago. It is scheduled to report fourth-quarter and full-year 2005 earnings by the end of March.

Subprime funders originated a record $809 billion in home mortgages in 2005, a 28% increase from the level of the year before, according to newly released figures from the Quarterly Data Report.Almost one in every four mortgages originated in the United States is now subprime- (or nonprime-) related, QDR found. (QDR is published by National Mortgage News a SourceMedia company.) Lenders of all stripes originated $3.29 trillion in home loans in 2005, the industry's second-best year ever, according to QDR. The results are somewhat distorted because subprime firms are increasingly funding other types of nonconforming credits that are not A-minus to D in quality. These other loan types include interest-only loans, payment-option adjustable-rate mortgages, and stated-income loans.

Existing-home sales fell by almost 3% in January to their weakest level in almost two years, according to figures released Tuesday morning by the National Association of Realtors.Compared with resales in the same month a year ago, the performance was even worse -- down 5.2% (to 6.56 million units, annualized) with the Northeast taking the most severe hit, 13.2%. Moreover, the supply of existing homes has risen by a startling 43% over the past 12 months. The trade group says there is now a 5.3-month supply of housing in the United States. Scott Anderson, senior economist for Wells Fargo & Co., described the situation as a "housing glut" but said his biggest concern is declining home values. He said a drop in prices will lead to a shutdown of the "home equity fountain of youth." Mr. Anderson said he believes consumers have kept the U.S. economy chugging along despite higher energy costs by tapping home equity.

Classes B-1 and B-2 of GS Mortgage Securities Corp. residential mortgage pass-through certificates, series 2003-HE1, have been placed on Rating Watch Negative by Fitch Ratings.In addition, four classes from two other GSAMP transactions were upgraded, and the ratings on 42 classes from eight GSAMP deals were affirmed. The negative rating actions were attributed to monthly losses that have exceeded excess spread in four of the last six months, causing overcollateralization to fall below its target.

Two classes from two Ameriquest Mortgage Securities Inc. home equity issues have been placed on Rating Watch Negative by Fitch Ratings.The affected securities are class M2 of series 2002-C and class M-4 of series 2002-3. In addition, Fitch upgraded 22 classes from eight Ameriquest transactions and affirmed the ratings on 89 classes from 24 deals. The negative actions were attributed to a deterioration in the relationship between credit enhancement and expected losses, the rating agency said.

Class A of Structured Finance Advisors Collateralized Asset Backed Securities Trust I Ltd. has been downgraded from B to CCC by Fitch Ratings.SFA CABS I is a collateralized debt obligation supported by residential and commercial mortgage-backed securities and CDOs, Fitch said. The downgrade "reflects the continued deterioration of the collateral and the decline in the coverage of the notes," the rating agency said.