Originations

Fueled by record home sales and a red-hot home equity market, residential debt in the United States grew at a blistering pace in the third quarter, according to new figures released by Fannie Mae.According to Fannie Mae chief economist David Berson, residential debt grew at a 15.9% annualized rate in the third quarter, compared with 15% in the second quarter. "This was the fastest two-quarter increase since 1979," Mr. Berson said. According to figures compiled by National Mortgage News, there is now $8.1 trillion in outstanding home mortgages in the United States. (By comparison, at the end of 2002 consumers owed $6.3 trillion on their homes.) Meanwhile, Fannie is forecasting $2.1 trillion in production next year. NMN is forecasting $3 trillion in production for 2005, which means -- according to Fannie's numbers -- fundings could decline by 30% next year. Fannie Mae can be found online at http://www.fanniemae.com.

Capital Automotive REIT, McLean, Va., has announced that it plans to convert from a Maryland real estate investment trust to a Delaware limited liability company on or about Dec. 30.The REIT completed a merger with Flag Fund V LLC and other entities advised by DRA Advisors LLC on Dec. 16, with Capital Automotive continuing as the surviving REIT but with all its common shares owned by Flag Fund V, the company reported. In the restructuring (which will be deemed a liquidation for federal income tax purposes), all the company's outstanding series A and series B preferred shares will be converted into series A and series B preferred units of its successor. The company cautioned that the restructuring could have adverse tax consequences for some of its preferred shareholders. It can be found online at http://www.capitalautomotivereit.com.

Republic Property Trust, a real estate investment trust based in Washington, D.C., has priced its initial public offering of 20 million common shares at $12 per share.The office REIT said it plans to use the net proceeds of the offering to repay debt, redeem the ownership interests of certain partners in its predecessor, and satisfy certain tax and other liabilities and fees. The stock will trade on the New York Stock Exchange under the symbol RPB. Lehman Brothers Inc. and Bear, Stearns & Co. were the joint book-running managers of the offering.

American Home Bank NA, Mountville, Pa., has announced the opening of the American Direct Funding Division, which allows experienced mortgage professionals at national or regional mortgage companies to become ADF branch operators.Branch operators will have access to major lenders and be able to select from hundreds of loan products provided by Fannie Mae, Freddie Mac, and other major mortgage players, American Home said. ADF will be headed by senior vice president Jason J. Lloyd. "ADF is geared for successful, experienced mortgage originators who have an entrepreneurial spirit but seek the support of a corporate umbrella and the lending power of a national bank," said James Deitch, the company's chief executive officer. "Mortgage professionals will operate independently and receive up to 100% commission payouts. They will have the ability to recruit their own teams and have no barriers to growth." The bank specializes in construction-to-permanent lending.

Commercial Net Lease Realty Inc., an equity real estate investment trust based in Orlando, Fla., has increased its $225 million unsecured credit facility to $300 million and extended its maturity to May 2009.In addition, the facility's interest rate was reduced from 100 basis points over the London interbank offered rate to LIBOR plus 80 bps, the REIT said. The facility also contains a competitive bid option for up to 50% of the amount. Wachovia Securities was the sole lead arranger and book manager of the facility. The REIT can be found online at http://www.cnlreit.com.

Brandywine Realty Trust, Plymouth Meeting, Pa., has announced an agreement by its operating partnership, Brandywine Operating Partnership LP, to sell $300 million of 5.625% unsecured notes due Dec. 15, 2010.The real estate investment trust said the operating partnership plans to use the net proceeds of the offering to fund a portion of the cash consideration in a pending merger with Prentiss Properties Trust. J.P. Morgan Securities Inc. and Banc of America Securities LLC are the joint book-running managers of the offering. The REIT can be found online at http://www.brandywinerealty.com.

Meanwhile, Equity One Inc., North Miami Beach, Fla., will replace Prentiss Properties Trust in the S&P REIT Composite Index after the close of trading Dec. 21, Standard & Poor's has announced.S&P said the reason for the change is that Prentiss is being acquired by Brandywine Realty Trust. Equity One is a real estate investment trust that acquires, renovates, develops, and manages shopping centers. S&P can be found online at http://www.standardandpoors.com.

Cedar Shopping Centers Inc. has been added to the S&P REIT Composite Index, according to the Port Washington, N.Y.-based real estate investment trust.Cedar Shopping Centers is focused on shopping centers anchored by supermarkets and convenience centers anchored by drug stores. The REIT can be found on the Web at http://www.cedarshoppingcenters.com.

Simon Property Group Inc., an Indianapolis-based real estate investment trust, has announced an increase in the revolving borrowing capacity of its unsecured corporate credit facility from $2.0 billion to $3.0 billion.The facility, which can be increased to $3.5 billion during its term, will mature in January 2010 and contains a one-year extension option. The base interest rate is 42.5 basis points above the London interbank offered rate, 12.5 bps lower than the rate on its existing facility, the company said. The joint arrangers and joint book managers of the transaction were JPMorgan Chase and Banc of America. Simon can be found online at http://www.simon.com.

Correctional Properties Trust, Palm Beach Gardens, Fla., has announced that it will change its name to CentraCore Properties Trust at the close of business on Dec. 20.The real estate investment trust said it will continue to acquire and develop correctional facilities. "However, we have expanded our scope to include essential real estate projects outside the corrections sector, including mental health and higher education facilities," said Charles R. Jones, the REIT's president and chief executive officer. The company's common stock will continue to trade under the symbol CPV. The trust can be found on the Web at http://www.correctionalpropertiestrust.com.

The National Association of Mortgage Brokers has announced that it will begin holding regional industry conferences next year.The NAMB said the regional conferences would better serve its membership of 27,000. "Our members attend these meetings to take advantage of educational opportunities, network with their peers, and discuss the many policy issues facing our industry," said NAMB president Jim Nabors. "We need to make these meetings more accessible to members. This new regional approach will accomplish this goal." Mr. Nabors said the NAMB will co-sponsor a regional sales and marketing meeting in California in February, and plans are under way for meetings in the other regions. A larger meeting for the western region of the country, called NAMB West, will take place in Las Vegas in October 2006. The association can be found online at http://www.namb.org.

William S. Harrison has resigned as executive vice president and chief financial officer of MuniMae, a Baltimore-based investor in multifamily mortgage debt and equity.Melanie M. Lundquist, MuniMae's senior vice president and chief accounting officer, will succeed Mr. Harrison as CFO, the company said. Mr. Harrison said he resigned "to turn my attention to new endeavors." The company can be found online at http://www.munimae.com.

ABN Amro Mortgage Group Inc., Ann Arbor, Mich., has reported that computer tape containing data on approximately 2.0 million residential mortgage customers was lost while being transported by DHL.The company, a subsidiary of Chicago-based LaSalle Bank Corp., said the tape did not contain any data related to LaSalle Bank accounts other than residential mortgages. "We understand that this incident may cause concern for our customers, and we deeply regret that it has occurred," said Thomas M. Goldstein, AAMG's chairman and chief executive officer. "We have begun notifying our customers and are dedicating resources to assist them and to answer any questions they may have. Although we have no reason to believe that this information has been misused, we are also informing them of steps they can take to protect themselves." The company said it has also arranged for its residential mortgage customers to enroll in a credit monitoring service for 90 days at no cost to them. The company can be found online at http://www.lasallebank.com.

Commercial and multifamily mortgage debt outstanding reached the $2.5 trillion mark in the third quarter, representing a 3.4% increase of $83.8 billion from that of the previous quarter, according to a Mortgage Bankers Association analysis of flow-of-funds data from the Federal Reserve Board.Considering debt backed by multifamily properties alone, there was a 1.5% rise, to $641 billion, in debt outstanding at the end of the third quarter. "The commercial/multifamily mortgage market continues to be buoyed by modest long-term interest rates, improving property fundamentals, and strong equity flows," said Doug Duncan, the MBA's chief economist. Commercial banks hold $1.1 trillion of the debt outstanding, representing 43% of the total (commercial banks also sometimes report commercial and industrial loans that are backed by the borrower's business income). CMBS pools hold 20% of the total, followed by life insurance companies with 10%, and savings institutions with 8%. Fannie Mae, Freddie Mac, and Ginnie Mae hold another 8% of the debt outstanding. The MBA can be found online at http://www.mortgagebankers.org.

Four classes of J.P. Morgan Commercial Mortgage Finance Corp. commercial mortgage pass-through certificates, series 2000-C10, have been downgraded by Moody's Investors Service.The downgrades were as follows: class J, from Ba3 to B1; class K, from B2 to B3; class L, from B3 to Caa2; and class M, from Caa1 to Ca. Moody's also upgraded three classes in the deal and affirmed the ratings on seven others. The downgrades were attributed to realized losses, expected losses from five specially serviced loans, and LTV dispersion. (Moody's said 14.7% of the pool has a loan-to-value ratio greater than 100%, compared with 9.1% at last review and 0.6% at securitization.) Eleven loans have been liquidated, resulting in losses of approximately $9.8 million, and Moody's projects aggregate losses of approximately $9.6 million for the specially serviced loans. The certificates are collateralized by 152 mortgage loans in 33 states.

The office condominium market has been revived by low interest rates and the financial benefits of owning versus renting, but the jury is still out on the future of office condos, according to a report by Grubb & Ellis Co. and PNC Real Estate Finance.The report found that office condo developers are active in smaller markets where they might not be expected, such as Grand Rapids, Mich., and nearly absent in certain larger markets, such as Los Angeles, San Francisco, and Boston. More than 60% of the brokers surveyed said they believed controlling occupancy costs is a major factor driving demand for office condos, which were defined as office buildings with two or more suites that are individually owned. But nearly 60% also gave future development only a yellow light, versus over 30% who gave it a green light. "If one assumes that there has been a fundamental shift in the way that real estate is perceived as an investment, then office condos are likely here to stay, remaining a legitimate, if tiny, segment of the office market," said Elizabeth Ptacek, a senior analyst in market research at PNC RE Finance and a co-author of the report, "Office Condos: Here to Stay or Gone Tomorrow?" The other co-author is Robert Bach, national director of market analysis for Grubb & Ellis. The companies can be found online at http://www.grubb-ellis.com and http://www.pncrealestatefinance.com.

Revenue Properties Co. Ltd., Mississauga, Ontario, has acquired approximately 1.19 million shares of Sizeler Property Investors Inc., New Orleans, according to Revenue Properties and Morguard Corp., a Canadian real estate company that owns a stake in it.The price averaged $12.85 per share, for a total investment of approximately US$15.33 million, the companies reported. Revenue Properties said it now owns 5.6% of the issued and outstanding shares of Sizeler, a real estate investment trust that recently announced that its board was considering strategic options such as a merger, sale, or plan of liquidation. The companies can be found online at http://www.revprop.com, http://www.morguard.com, and http://www.sizeler.net.

The average 30-year fixed mortgage rate fell from 6.32% to 6.30% over the seven-day period ended Dec. 15, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate fell from 5.87% to 5.85%, the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages decreased from 5.78% to 5.77%, and the average rate for one-year Treasury-indexed ARMs declined from 5.16% to 5.15%. Fees and points averaged 0.5 of a point for fixed-rate mortgages and hybrid ARMs, and 0.6 of a point for one-year ARMs. "Earlier in the week, interest rates were a bit higher, as financial markets were a little anxious about what language the Federal Reserve would use in its statement this month," said Frank Nothaft, Freddie Mac's chief economist. "When the Fed signaled that its interest rate tightening might be coming to an end, the financial market breathed a sigh of relief, and rates eased somewhat." A year ago, the average 30-year and 15-year fixed rates were 5.68% and 5.11%, respectively, and the average one-year ARM rate was 4.18%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

First BanCorp, the parent company of FirstBank Puerto Rico, San Juan, has announced that it will restate its earnings from 2001 through the first quarter of this year because certain of its mortgage-related transactions do not qualify as sales for accounting purposes.The company said a "substantial portion" of its mortgage-related transactions with Doral Financial Corp. and R&G Financial Corp. since 1999 do not so qualify. The restatements will also correct the accounting treatment of certain interest rate swaps, First BanCorp said. The Doral and R&G transactions in question were accounted for as purchases of residential real estate loans and commercial mortgage loans. The restatement will reflect the transactions as commercial loans secured by mortgages, the company said. The revised classification will not result in a need for additional reserves, but it has led the company to terminate its commitments to purchase mortgage loan portfolios from Doral, First BanCorp said. The company can be found online at http://www.firstbankpr.com.

Best Beach Real Estate, Miami, has announced a marketing alliance with Countrywide Financial Corp., Calabasas, Calif., to offer the convenience of accessing real estate and lending services together.Under the terms of the alliance, Countrywide becomes Best Beach's preferred lender and has offered to provide professional financing advice to its customers. The partnership "provides our associates with more negotiating tools to offer lending assistance to homebuyers in addition to realty services," said Abraham Chehebar, managing director of Best Beach. The companies can be found online at http://www.bestbeach.net and http://www.countrywide.com.