Originations

Urdang Capital Management Inc., a real estate investment manager based in Plymouth Meeting, Pa., has announced an agreement under which it will be acquired by The Bank of New York Co. for an undisclosed amount.E. Scott Urdang, the company's chief executive officer, said Urdang's entire management team will remain in place. "Urdang's significant real estate expertise, coupled with The Bank of New York's substantial asset management and distribution strengths, makes this a perfect fit for both parties," he said. Urdang said it manages more than $3 billion in private equity investments and portfolios of real estate investment trust securities. Bank of New York can be found on the Web at http://www.bankofny.com.

Fieldstone Investment Corp., Columbia, Md., has announced an agreement under which Fieldstone Mortgage Co. will sell certain assets related to its conforming lending division to Wausau Mortgage Corp., Pleasanton, Calif.The assets consist of personal property and contract rights pertaining to certain offices operated by Broad Street Mortgage Co., including the division headquarters in San Antonio, all wholesale offices, and certain retail offices, Fieldstone said. The financial terms of the deal were not disclosed. Fieldstone said it expects to record a one-time after-tax charge of approximately $700,000 in the first quarter related to the transaction. "This transaction allows Fieldstone to focus on our core nonconforming loan origination and investment portfolio businesses," said Michael J. Sonnenfeld, president and chief executive officer of Fieldstone. "We will continue to offer conforming products through our nonconforming retail division and will continue to build our retail and wholesale mortgage lending franchise." Fieldstone Mortgage can be found online at http://www.fieldstonemortgage.com.

Freddie Mac chairman and chief executive Richard Syron has told the nation's homebuilders that their industry should experience a "material" slowdown this year.However, the chief of the government-sponsored enterprise, speaking recently at the annual convention of the National Association of Home Builders, predicted that starts and home sales will remain strong by historical standards. "Simply put, we're coming down from Mount Everest levels of activity," he told builders. "But 2006 still should be a good year at the base camp -- hopefully leveling out at a high plateau." Final numbers are not in yet, but housing starts -- including single-family and multifamily -- likely set a record last year, weighing in at about 2 million newly constructed units.

Two classes of First Union National Bank--Bank of America Commercial Mortgage Trust pass-through certificates, series 2001-C1, have been downgraded by Fitch Ratings.Class O was downgraded from B to B-minus, and class P was downgraded from B-minus to CC. In addition, Fitch upgraded two classes in the transaction and affirmed the ratings on 16 other classes. "The downgrades are the result of expected losses, which will decrease the credit enhancement of classes O and P," Fitch said. The rating agency said the transaction has incurred $20.4 million in losses, and five loans are in special servicing, of which Fitch expects losses on three.

Three classes of GMAC Commercial Mortgage Securities Inc.'s mortgage pass-through certificates, series 2001-C1, have been downgraded by Fitch Ratings.The downgrades were as follows: class M, from B to B-minus; class N, from B-minus to CC; and class O, from CC to C. In addition, Fitch affirmed 14 classes in the deal. The downgrades reflect decreased subordination levels due to expected losses from two specially serviced assets and a 10.2% increase in Fitch Loans of Concern since Fitch's last rating action, the rating agency said. Fitch said it has identified 20 loans in the latter category, including the specially serviced assets and loans exhibiting low debt service coverage ratios or low occupancy. Fitch can be found online at http://www.fitchratings.com.

ComUnity Lending, a mortgage lender based in Morgan Hill, Calif., and Garrett, Watts & Co. have announced the formation of Branker Connect, a partnership aimed at helping brokers "achieve the benefits of becoming a mortgage banker, without the risks."Corky Watts, a principal at Garrett Watts, said the new company offers a six-step path for brokers who want to become mortgage bankers or who have made the move but are having difficulty. "Many brokers are intimidated by the challenges and learning curve involved with entering into mortgage banking, or find that they weren't as prepared as they should have been," Mr. Watts said. The six steps are: learning the business from Branker Connect's professionals; offloading mortgage operations while learning; working with the capital market department to ensure competitive prices; using a warehouse line provided by Branker Connect and its partners; using "proven mortgage technology" without a capital cost; and focusing on production, not on managing mortgage banking risks. The companies can be found online at http://www.comunitylending.com, http://www.garrettwatts.com, and http://www.brankerconnect.com.

A day after disclosing that its fourth-quarter earnings would be smaller than expected, American Home Mortgage Investment Corp., Melville, N.Y., has announced an agreement to purchase Waterfield Financial, a top-50-ranked residential lender based in Fort Wayne, Ind.No purchase price was disclosed. A spokeswoman for AHM said the publicly traded mortgage real estate investment trust is not acquiring the $19 billion residential servicing portfolio of WF's Waterfield Mortgage unit. "They have other plans for that portfolio," the spokeswoman said. (Waterfield said in a statement that it has reached a tentative agreement to sell the portfolio to an undisclosed buyer.) However, AHM will take control of Waterfield's 46 retail, wholesale, and correspondent branches, which are spread out among 16 states. Officials at the bank-owned mortgage firm could not be reached for comment by deadline time. AHM ranks 16th among all residential funders, according to the Quarterly Data Report, a MortgageWire affiliate. Michael Strauss, AHM's chief executive officer, apologized for the timing of the acquisition announcement, saying purchase talks had been under way "for some time." AHM can be found online at http://www.americanhm.com.

Strategic Hotel Capital Inc., Chicago, has announced a public offering of 4.0 million shares of its 8.25% series B cumulative redeemable preferred stock.The shares have a liquidation preference of $25 per share. Wachovia Securities is the sole book-running manager of the offering, and Raymond James is the joint lead manager, the company said. The underwriters have been granted an option to buy up to 600,000 additional preferred shares to cover any overallotments.

BRT Realty Trust, a real estate investment trust based in Great Neck, N.Y., has reported closing on a new credit facility of up to $150 million.The new facility, which replaces an $85 million line of credit and a $15 million credit line, is provided by North Fork Bank, Valley National Bank, Merchants Bank Division, Signature Bank, and Manufacturers and Traders Trust Co., the company said. It has a maturity date of Feb. 1, 2008, and provides for two one-year renewal options. BRT, a mortgage REIT, can be found online at http://www.brtrealty.com.

American Home Mortgage Investment Corp., Melville, N.Y., has announced that it expects to record only a small profit in the fourth quarter and that its adjusted annual earnings will fall below its previous guidance of $4.60-$4.80 per share.The company said it was hit near the end of the fourth quarter by a rapid reduction in the value of its mortgage loans held for sale and its investment portfolio due to an "unusually severe" widening of the yield differential between the London interbank offered rate and both mortgages and junior mortgage securities. "During December the secondary mortgage market became one-sided, with very few buyers being offered a large amount of product," said Michael Strauss, American Home's chairman and chief executive officer. "Most buyers moved to the sidelines to wait out the holidays, and significant discounts to what had been standard pricing a few weeks earlier were necessary to sell loans, driving yields sharply higher. I believe market conditions at the end of the fourth quarter were, in part, an anomaly and that equilibrium is returning to the market as we move into January." The company can be found online at http://www.americanhm.com.

Friedman Billings Ramsey has identified 56 metropolitan statistical areas that have persistently high default rates on subprime and alternative-A loans.According to FBR research, subprime loans in these MSAs (which cover 16 states) have a default rate of 13.82%, more than double the national subprime delinquency rate of 6.16% (for 331 MSAs). Alt-A loans in the 16 states carry a 2.54% delinquency rate, compared with 0.77% nationally. The MSAs include Buffalo, N.Y.; Charlotte, N.C.; Cincinnati; and Cleveland. FBR analyst Michael Youngblood told MortgageWire that the problem MSAs have "rust belt, cotton belt, and farm belt economies that are stuck in the 19th century." He said delinquencies are rising in these areas in part because of layoffs in the automotive and auto parts industries. Mr. Youngblood said it's appropriate for lenders to "price each loan based on its individual risk."

The average 30-year fixed mortgage rate fell from 6.21% to 6.15% over the seven-day period ended Jan. 12, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate fell from 5.76% to 5.71%, the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages decreased from 5.78% to 5.76%, and the average rate for one-year Treasury-indexed ARMs declined from 5.16% to 5.15%. Fees and points averaged 0.6 of a point for fixed-rate mortgages and one-year ARMs and 0.5 of a point for hybrid ARMs. "Interest rates for long-term mortgages slipped lower this week due to some economic data releases that pointed towards more subdued inflation in the near term," said Frank Nothaft, Freddie Mac's chief economist. "Rates for 30-year fixed-rate mortgages are about the same as they were in late October of 2005. However, shorter-term rates, such as those for adjustable-rate mortgages, were basically unchanged due to market expectations of another rate hike by the Federal Reserve Board at the end of January." A year ago, the average 30-year and 15-year fixed rates were 5.74% and 5.19%, respectively, and the average one-year ARM rate was 4.10%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

Fannie Mae says it wants to work with lenders and homebuilders to bring standardization to the underwriting and servicing of construction loans and bring down costs, according to Fannie Mae president and chief executive Daniel Mudd.Fannie is developing back-office support for lenders doing acquisition, development, and construction lending, he told the National Association of Home Builders at its national convention in Orlando, Fla. He noted that Fannie Mae is already a "smaller player" in construction lending. The government-sponsored enterprise purchased 42,000 ADC loans in 2004, and it plans to do $10 billion in such lending over 10 years as part of its commitment to affordable housing. The CEO stressed that Fannie wants to bring its expertise in single-family mortgages to the ADC lending market, but not to dominate it. "We're not striving to put a big hairy King Kong footprint on the market," Mr. Mudd said. "We're striving to serve the market."

The lavish flow of investment capital into U.S. commercial real estate, which has spurred property values to record levels, is likely to slow this year, according to the Lusk Center for Real Estate at the University of Southern California."While foreign and U.S. investors are continuing to acquire properties, they are showing more discretion," said Lusk Center director Stuart Gabriel. "On the residential side, flipping of properties has come to a virtual halt as markets have cooled." Meanwhile, investors have played "the appreciation game" with commercial property, investing in the RE equivalent of growth stocks, Mr. Gabriel said. "Now, capital is beginning to retreat from properties that offer relatively low returns," he said, predicting that investors this year will look for "well-located properties that provide steady cash flows as well as capital preservation and competitive returns." The Lusk Center can be found online at http://www.usc.edu/lusk.

Sizeler Property Investors Inc., a New Orleans-based real estate investment trust, has announced the retention of Wachovia Capital Markets LLC as a financial adviser to analyze its strategic options, including a sale or merger.Mark M. Tanz, the nonexecutive chairman of the equity REIT, said no timetable has been set for consummating one of the options, which also include a recapitalization, reorganization, or restructuring. The company, which invests in retail and apartment properties in the Southeast, can be found on the Web at http://www.sizeler.com.

Silver Hill Financial, a Miami-based lender specializing in small-balance commercial real estate loans, has announced the introduction of CLEAR, a residential-style approach that it says will streamline the origination of commercial mortgages.Silver Hill said the CLEAR -- Commercial Lending Easy as Residential -- underwriting process focuses on credit scores and personal financial strength rather than property cash flow. It can be used for commercial mortgages from $100,000 to $1 million. Joanna Schwartz, managing director of Silver Hill, said the program is "completely different" from those of other commercial lenders and "gives residential brokers a stress-free transition into commercial business." As a result, brokers and loan officers "can easily diversify" and expand their business, and "borrowers with strong credit are able to finance commercial properties -- many that would not pass traditional commercial guidelines -- in a way that is familiar to them," she said. The company can be found online at http://www.silverhillfinancial.com.

The Market Composite Index, an overall measure of mortgage applications, rose from 545.9 to 600.1 on a seasonally adjusted -- and holiday-adjusted -- basis during the week ended Jan. 6, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications increased 27.2% on the week but were down 19.1% from the level recorded a year earlier. The Purchase Index rose from 418.3 to 457.4 on a seasonally adjusted basis, while the Refinance Index climbed from 1363.2 to 1497.5. The four-week moving average for the Purchase Index fell from 445.6 to 440.4, and the comparable average for the Refinance Index rose from 1344.5 to 1384.5. Refinancings represented 42.2% of total applications, down from 42.7% the previous week, while adjustable-rate mortgages accounted for 28.1%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages fell from 6.15% to 6.08%, and points (including the origination fee) decreased from 1.32 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.

The National Association of Realtors is objecting to authority granted to Bank of America and PNC Financial Services Group by the Office of the Comptroller of the Currency to develop commercial real estate.The Washington-based trade association says the move puts national banks "uncomfortably close" to the area of commercial real estate brokerage and sees this as a conflict with the Gramm-Leach-Bliley Act. PNC is investing $122 million in a commercial real estate complex near its Pittsburgh headquarters, the NAR said, and PNC employees are expected to occupy only 22% of the office and hotel space at the property. Bank of America plans to develop a hotel in Charlotte, N.C., and use more than 37.5% of the rooms annually. NAR president Tom Stevens said the OCC approvals "bring banks closer to controlling commercial real estate projects from top to bottom" and that if they get into real estate brokerage activities, leading to consolidation in this area, consumers stand to suffer. The NAR has filed a Freedom of Information Act request to determine whether the OCC has granted similar permission to other banks.

Real estate investors' hopes are "still soaring" as a result of declining vacancy rates and a "deluge" of capital into real estate, according to a quarterly investor survey by PricewaterhouseCoopers.Another finding of the PricewaterhouseCoopers Korpacz Real Estate Investor Survey is that high home prices, surging construction costs, and rising mortgage rates have spurred increasing demand for apartments in recent months. "Last year, 75% of central business district markets posted year-over-year declines in overall vacancy, compared to only 25% recording such declines between 2002 and 2003," said Peter Korpacz, director of the PricewaterhouseCoopers Global Strategic Real Estate Research Practice. "At the same time, in suburban office markets, 80% of CBD markets saw year-over-year declines last year, as compared with only 29% between 2002 and 2003." More information on the survey can be found on the Web at http://www.pwcreval.com.

CB Richard Ellis Group Inc., a Los Angeles-based commercial real estate services firm, has announced the acquisition of a majority interest in its Japanese affiliate, IKOMA CB Richard Ellis KK, for an undisclosed amount.Under the arrangement, CBRE will boost its minority ownership interest in IKOMA to 51%, with IKOMA president Tatsumi Hanaya and other senior managers owning the balance. The Japanese company will adopt the CBRE brand name and combine operations with CBRE's majority-owned operation in Tokyo. "Our increased ownership position in IKOMA fits perfectly with our strategy of achieving pre-eminence in all of the world's major business capitals," said Brett White, CBRE's president and chief executive officer. "We also believe our investment is well timed. The Tokyo office market is clearly emerging from a pronounced downturn, with increased leasing and investment activity." The company can be found online at http://www.cbre.com.