Originations

Clayton Holdings Inc., a provider of information and analytics to the banking and fixed-income securities markets, has announced the acquisition of Mortgage Resource Network, a Dallas-based provider of outsourced mortgage origination support and pre-close due diligence services.The terms of the deal were not disclosed. Clayton noted that the acquisition expands its presence in the mortgage services sector. MRN provides turnkey front-end fulfillment, imaging, contract underwriting, closing, funding, and investor delivery services required by mortgage originators and warehouse lenders. In addition, MRN provides post-transaction and servicing transfer support services, including trailing document management and MERS research and registration. Clayton, based in Shelton, Conn., can be found online at http://www.clayton.com.

The Market Composite Index, an overall measure of mortgage applications, fell from 626.8 to 619.3 on a seasonally adjusted basis during the week ended Feb. 3, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications increased 2.2% on the week but were down 16.4% from the level recorded a year earlier. The Purchase Index fell from 435.7 to 425.1 on a seasonally adjusted basis, while the Refinance Index climbed from 1747.2 to 1751.0. The four-week moving average for the Purchase Index fell from 452.7 to 444.6, and the comparable average for the Refinance Index rose from 1666.0 to 1729.3. Refinancings represented 42.1% of total applications, down from 43.0% the previous week, while adjustable-rate mortgages accounted for 29.8%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages rose from 6.20% to 6.25%, and points (including the origination fee) rose from 1.17 to 1.23 for loans with 80% loan-to-value ratios, the association reported. The MBA can be found online at http://www.mortgagebankers.org.

Community bank and thrifts are adopting new mortgage products, practices, and technology even though they continue to retain two-thirds of their loan volume in portfolio, according to a survey by America's Community Bankers.ACB's 13th annual real estate survey shows that 8% of 200 community banks (less than $1 billion in assets) originated interest-only ARMs in 2005, up from 1% in 2004. Nearly 40% of community banks made no-document loans and 63% made no-downpayment loans, although the actual loan volume is small. Meanwhile, 37% of community banks accept mortgage applications online and 17% approve and reject applications online. When selling in the secondary market, small banks generally sell half those loans to private conduits/wholesalers and the other half to Fannie Mae and Freddie Mac. The most frequently cited conduit/wholesalers in the ACB survey are Countrywide, CitiMortgage, Washington Mutual, SunTrust, and Wells Fargo.

Impac Multifamily Capital Corp. has been renamed Impac Commercial Capital Corp., according to Impac Mortgage Holdings Inc., the parent company and a real estate investment trust based in Newport Beach, Calif.The newly named subsidiary will offer a wider range of commercial lending products to cover mobile home parks and multitenant offices as well as retail and mixed-use projects. ICCC has also opened a new full-service center in Chicago to provide its Midwestern and East Coast brokers with additional support.

Resource Capital Corp., a Philadelphia-based real estate investment trust, has priced an initial public offering of 4.0 million shares of its common stock, including approximately 1.9 million shares sold by the selling stockholders, at $15 per share.Underwriters for the IPO were Credit Suisse, Friedman Billings Ramsay, Citigroup, J.P. Morgan, Bear, Stearns & Co. Inc., Piper Jaffray, and Flagstone Securities, the company said. The underwriters have been granted an overallotment option for an additional 600,000 shares of common stock, exercisable within 30 days. Shares will begin trading on the New York Stock Exchange on Feb. 7 under the symbol RSO.

CBA Commercial LLC, Stamford, Conn., has announced a partnership arrangement with GMAC Commercial Mortgage to participate in the CBAC Authorized Lender Program.CBA specializes in purchasing and securitizing small-balance multifamily, commercial, and mixed-use mortgage loans. The Authorized Lender Program features loans of up to $3 million; multifamily, office, retail, light industrial, and mixed-use property types; two-, three-, five-, seven-, and 10-year adjustable-rate mortgages; and 30-year financial maturities and 30-year amortization. Craig Knutson, CBA's executive vice president, said the company views the partnership with GMACCM as "a validation of our efforts to provide a simplified and streamlined process to originate small-balance commercial mortgage loans."

Paragon Financial Corp., Ponte Vedra Beach, Fla., has announced an agreement to acquire Shearson Home Loans Inc. from Consumer Direct of America Inc.Under the agreement, Paragon will issue to Consumer Direct the equivalent of four shares of Paragon's common stock for each outstanding Paragon share and share equivalent. Paragon said Shearson, a consolidator of independent mortgages brokerages, employs over 300 people and had a closed-loan volume of $1.1 billion in 2004. "We view Shearson as an ideal partner in our quest to consolidate the mortgage brokerage industry," said Paul Danner, Paragon's chief executive officer. Paragon can be found online at http://www.pgnf.com.

The Mortgage Bankers Association's ranking of top commercial and multifamily mortgage loan servicers places Wachovia at the top of the list in total primary and master servicing volume, at $233.2 billion.Following Wachovia are GMAC Commercial, with $231.5 billion, Midland Loan Services, with $159 billion, and Wells Fargo, with $95.5 billion. (They are also the top four primary and master servicers for commercial mortgage-backed securities.) Rankings of servicing for life company loans place Prudential Asset Resources at the head of the list, the trade group reported, followed by GMAC, NorthMarq Capital, and Q10 Capital. Deutsche Bank is ranked No. 1 for servicing of Fannie Mae and Freddie Mac loans, followed by Washington Mutual, GMAC, and ARCS Commercial Mortgage. Wachovia is No. 1 for servicing of commercial bank and savings institution loans. The MBA can be found online at http://www.mortgagebankers.org.

Originations of commercial and multifamily loans were 48% higher in 2005 than in 2004, according to the Mortgage Bankers Association.Fourth-quarter 2005 originations were also 16% higher than third-quarter originations, and the highest ever recorded in the trade association's quarterly survey, according to the MBA. "The favorable conditions that led to records in 2005, such as continued low interest rates, an abundance of capital, and a strong economy, should remain strong as we progress through 2006," said MBA chief economist Doug Duncan. For 2005, originations for commercial banks rose 60%, commercial mortgage-backed securities conduit originations rose 83%, and originations for life insurance companies increased 25%. Multifamily was the dominant property type for the year, accounting for 36% of originations. In a press briefing at the MBA's commercial real estate finance convention in Orlando, Fla., Mr. Duncan said he expects this year to be as good as 2005, or even better, in terms of loan production. He said he expects consumer spending to slow down this year, and his forecast calls for the 10-year Treasury note to be in the 4.8%-5.0% range and for the Federal Reserve to raise its target federal funds rate at least once more.

Freddie Mac has announced that it closed a record $26.2 billion in new multifamily business transactions in 2005, a 10% increase from $23.8 billion in 2004.The record volume includes approximately $2 billion in targeted affordable housing products, which finance apartments that receive some form of government subsidy. All together, Freddie Mac said its multifamily transactions financed approximately 436,000 apartment homes affordable to families earning low or moderate incomes. Of the multifamily business, nearly $10 billion came through Freddie Mac's flow programs, and another $1.3 billion consisted of low-income housing tax-credit investments, the government-sponsored enterprise said. Freddie can be found online at http://www.freddiemac.com.

Bimini Mortgage Management Inc., a real estate investment trust based in Vero Beach, Fla., has announced a corporate name change to Opteum Inc.The REIT invests in residential mortgage-related securities and originates loans through its taxable REIT subsidiary, Opteum Financial Services. It will begin trading on the New York Stock Exchange on Feb. 10 under the symbol OPX. The company can be found on the Web at http://www.opteum.com.

The Eleventh Federal Home Loan Cost of Funds Index stood at 3.296% in December, a 10-basis-point rise from 3.190% in November.The index is compiled by the Federal Home Loan Bank of San Francisco based on the cost of mortgage money for thrifts in Arizona, California, and Nevada and is commonly used to index adjustable-rate mortgage loans. In 2005, the index increased 110 bps. COFI has risen every month since May 2004, when it bottomed out at 1.708%. Last year was the first year since 2000 in which COFI rose in all 12 months. Ironically, COFI declined every month in 2001. The increase in 2000 was just 71 bps, while the decline the following year totaled 204 bps.

NetBank Inc., an Atlanta-based online bank, has reported a mortgage-related net loss of $180,000 ($0.00 per share) for 2005, compared with net income of $4.2 million ($0.09 per share) in 2004, although the company did record a profitable fourth quarter.Net income for the fourth quarter totaled $895,000 ($0.02 per share), compared with a net loss of $17.7 million ($0.38 per share) a year earlier, NetBank reported. The production of conforming mortgages totaled $2.5 billion in the fourth quarter, a decline of 14.7% from that of the third quarter, and the production of nonconforming mortgages totaled $807 million, a decline of 8.6%, the company reported. "As we had reported throughout the year, our mortgage operations were under pressure due to a highly competitive pricing environment," said Douglas K. Freeman, NetBank's chairman and chief executive officer. "This pressure, although not surprising, was simply more irrational than anticipated, particularly within the nonconforming business where our revenue margins dropped an average of 64 basis points during the year. Our mortgage operations went from a positive pretax contribution of $21.1 million a year ago to a pretax loss of $17.7 million this year." The company can be found online at http://www.netbank.com.

Starwood Capital Group Global LLC, an investment management firm based in Greenwich, Conn., has announced the closing of two real estate funds.The Starwood Global Opportunity Fund VII is a $1.475 billion fund focused on investing in undervalued real estate and real-estate-related assets and operating companies. The second fund, the $900 million Starwood Hospitality Fund I, will invest in and develop hotel, resort, and related leisure properties around the world at all levels of the capital structure, Starwood said. The company also reported that it opened three new offices in the United States last year, in Ft. Lauderdale, Fla.; Washington, D.C.; and Phoenix.

New Century Warehouse Corp. has completed the purchase of certain assets (and the assumption of certain related liabilities) of Access Lending Corp., according to New Century Financial Corp., the Irvine, Calif.-based parent company of New Century Warehouse.Access Lending, Sugar Land, Texas, provides warehouse lending services to middle-market residential mortgage bankers. The purchase price was approximately $10 million in cash, and Access Lending is entitled to receive additional payments for two years, based on profitability, New Century said. New Century Financial, a real estate investment trust, can be found online at http://www.ncen.com.

Entertainment Properties Trust, a real estate investment trust based in Kansas City, Mo., has priced a public offering of 1 million shares of its common stock at $41.25 per share.The underwriter, RBC Capital Markets, has been granted an option to buy an additional 150,000 shares of the stock to cover any overallotments. The REIT specializes in the acquisition of real estate assets leased to entertainment operators.

In addition to a merger offer from Magazine Acquisition and a competing offer from Oriole Partnership, the Town and Country Trust has received a third acquisition offer from Berkshire Property Advisors.TCT, a Baltimore-based multifamily real estate investment trust, said Berkshire has sent an unsolicited proposal to acquire the REIT at $37 per share/operating partnership unit, as well as a prorata payment of TCT's dividends. Meanwhile, TCT's board has determined that the Oriole offer of $36 per share/OPU, plus the payment of prorated dividend, is superior to the Magazine offer of $33.90 per share/OPU. Magazine Acquisition has until Feb. 7 to match Oriole's offer before the TCT board can change its mind about the Magazine offer. In response to this development, Morgan Stanley Real Estate and Onex RE, which constitute the Magazine Acquisition group, said, "We are currently reviewing our options, and we expect to make further announcements as appropriate." TCT and Berkshire can be found online at http://www.tctrust.com and http://www.berkshire-group.com.

In a sign of where the mortgage industry may be heading, the volume of primary new insurance written by members of the Mortgage Insurance Companies of America that came through the bulk channel in December topped the volume of the traditional channel for the first time ever.The bulk volume totaled $13.9 billion, compared with $12.8 billion in traditional volume. The bulk channel is where the private mortgage insurers get most of the riskier product, such as nonprime loans. The total volume, $26.7 billion, made December by far the best month of the year for private mortgage insurers. The other months in which over $20 billion in volume was recorded were June, at $23.1 billion; August, at $22.2 billion; and September, at $23.8 billion. It was also because of large growth in the bulk channel that for the year, MICA members did more volume than in 2004. Volume in 2004 totaled $219.0 billion, with $179.8 billion in traditional and $39.2 billion in bulk. Last year, volume totaled $225.0 billion, with $158.1 billion in traditional and $66.9 billion in bulk business. MICA can be found online at http://www.micanews.com.

Ongoing investigations and examinations of institutions flagged by Home Mortgage Disclosure Act data for possible fair-lending violations are focusing on pricing discretion at the retail and wholesale level, according to an industry attorney and litigator.As the inquiries peel back several layers of the onion, "an awful lot of the focus has really turned on pricing discretion," Skadden Arps attorney Andrew Sandler said. Justice Department and state attorney general investigators, as well as bank examiners, are looking at what kind of discretion retail lenders are giving their employees in pricing prime and subprime loans. On the wholesale side, they are looking at how the lender regulates the pricing practices of mortgage brokers. "There has been some focus on redlining, reverse redlining, steering," Mr. Sandler said, in cases where pricing disparities between minorities and whites seem to have a geographical explanation. Mr. Sandler spoke at an American Law Institute - America Bar Association financial services institute in Washington.

Sky Financial Group, Bowling Green, Ohio, has agreed to purchase Union Federal Bank of Indianapolis, and its parent company, Waterfield Mortgage, for $330 million in stock and cash.A spokesman for Sky said the company will not purchase much in the way of mortgage banking assets belonging to Waterfield. In mid-January, American Home Mortgage, Melville, N.Y., agreed to buy most of Waterfield's production offices, with its $19 billion in residential servicing rights reportedly going to Citigroup. (The Citigroup part of the transaction has not been confirmed, and both parties refuse to comment.) Union Federal, the fourth-largest bank in the state, has 44 full-service centers. The sale includes Waterfield's insurance and settlement services divisions. Sky can be found on the Web at http://www.skyfi.com.