Originations

Host Marriott Corp., Bethesda, Md., is acquiring a portfolio of 38 luxury hotels from Starwood Hotels and Resorts for about $4.04 billion.The portfolio consists of 25 domestic and 13 international properties with a total of 18,964 rooms, Host Marriott said. The hotel real estate investment trust said it expects to assume about $700 million of debt and to issue about $2.3 billion worth of equity to Starwood stockholders, 133.529 million shares at an exchange price of $17 per share, as part of the transaction. W. Edward Walker, executive vice president and chief financial officer of Host Marriott, said the company has also arranged a bridge loan commitment with Goldman, Sachs & Co. and Deutsche Bank Securities. He said the company expects "to obtain permanent financing through a variety of attractive options including unsecured and secured debt, asset sales, and potentially arranging a third-party joint venture for the European assets."

Three classes of Morgan Stanley Dean Witter Capital I Trust commercial mortgage pass-through certificates, series 2002-IQ3, have been downgraded by Moody's Investors Service.The downgrades were as follows: class H, from Ba1 to Ba3; class J, from Ba2 to B2; and class K, from Ba3 to B3. Moody's also affirmed the ratings of 13 classes in the deal. The rating agency attributed the downgrades to LTV dispersion and anticipated losses from the only specially serviced loan, the Tulsa Distribution Center Loan, which represents 3.6% of the pool. The loan is secured by a 758,000-square-foot warehouse and distribution facility in Tulsa, Okla. Moody's said the facility was 100% leased at securitization to the Fleming Co., which declared bankruptcy in April 2003 and later rejected its lease. The rating agency has projected a loss of approximately $16.5 million from the loan. Moody's said its analysis found that 6.7% of the pool, excluding the specially serviced loan, has a loan-to-value ratio greater than 100%, compared with 1.0% at securitization.

Classes A-1 and A-2 of Diversified Asset Securitization Holdings I LP have been downgraded from A-minus to BB by Fitch Ratings.Fitch attributed the downgrades to deterioration in the credit quality of DASH's collateral portfolio. DASH I is a collateralized debt obligation managed by AAM Co. Fitch said 47.2% of the portfolio backing the CDO consists of residential mortgage-backed securities, and the remainder consists of commercial MBS (34.9%), asset-backed securities (13.2%), and other CDOs (4.7%).

Four floating-rate classes of North Street Referenced Linked Notes 2000-1 Ltd., a collateralized debt obligation consisting partly of real estate investment trust securities, have been downgraded by Fitch Ratings.The downgrades were as follows: class B, from BBB to BBB-minus; class C, from BB to B; and classes D-1 and D-2, from CCC to CC. The rating on one other class in the transaction was affirmed, as were the ratings on two classes of another North Street deal. The downgrades were attributed to credit deterioration in the portfolio and the expectation of "additional credit events." The transaction is a partially funded synthetic CDO created to enter into credit default swaps with UBS Investment Bank, Fitch said. It consists of corporate bonds, asset-backed securities, and REIT securities.

Istithmar PJSC, a United Arab Emirates-based investment house, has acquired 230 Park Avenue in Midtown Manhattan for $705 million.The approximately 1.2 million-square-foot, 34-story, landmark New York City property was acquired from 230 Park Avenue Investors, with funding from Credit Suisse First Boston. "Within the real estate sector, Istithmar targets projects that are positioned to experience long-term substantial capital appreciation, rather than focusing exclusively on the yield of our properties," said Sultan Ahmed Bin Sulayem, executive chairman of Istithmar. "We remain very bullish about key gateway cities like New York, London, and Paris. We are also eyeing what we believe are tremendous opportunities across the various real estate asset classes in the Middle East, China, Southeast Asia, and Eastern Europe."

Moody's Investors Service has placed the Ba2 senior unsecured debt and B1 preferred stock ratings of La Quinta under review for possible downgrade, citing La Quinta's Nov. 9 announcement that it is being acquired by an affiliate of the Blackstone Group in a transaction valued at $3.4 billion.The terms of the all-cash financing for the transaction have not been disclosed. Moody's said the rating action reflects its concern that La Quinta's capital structure would be more highly leveraged and contain a "significant amount" of secured debt after the acquisition. La Quinta, based in Irving, Texas, is a paired-share hospitality firm consisting of a real estate investment trust -- La Quinta Properties Inc. -- and La Quinta Corp. Moody's can be found on the Web at http://www.moodys.com.

Popular Inc., a Puerto Rico-based financial services company, has announced the acquisition of substantially all the assets of Infinity Mortgage Corp., Parsippany, N.J., for an undisclosed purchase price.The acquired operations -- which serve New York, Connecticut, Maryland, Massachusetts, and Pennsylvania as well as New Jersey -- are now part of Equity One Inc., a subsidiary of Popular Financial Holdings Inc., which is a Popular Inc. subsidiary based in Marlton, N.J. Popular Inc. said the transaction expands its penetration into the U.S. market and "will complement the company's existing nonprime mortgage lending business through direct mail." It will also enable the company to expand its loan servicing business, Popular said. The company can be found on the Web at http://www.popularinc.com.

The Washtenaw Group Inc., Ann Arbor, Mich., has announced a deal to sell a majority, controlling stake in the company to GenStone Financial in return for a $5 million capital infusion.Washtenaw said it has signed a letter of intent to receive an immediate infusion of $1.5 million from GenStone in exchange for 6.0 million newly issued shares of common stock, which would represent 57% of the common shares outstanding. That would be followed by an additional $3.5 million investment in convertible preferred shares by February 2006, the company said. Washtenaw said it will negotiate a management agreement that "will eventually cede management control" to GenStone. Richard Coleman, president and chief executive officer of GenStone, will become CEO of Washtenaw, and Ronald Evans, currently executive vice president of Washtenaw Mortgage, will become president of Washtenaw. "With the influx of our investment, we believe that Washtenaw will become the largest minority-owned mortgage banking company in the United States," Mr. Coleman said. ".... Washtenaw will aggressively pursue the residential rehabilitation and upgrade housing market. Washtenaw will also broaden its marketing efforts toward the emerging domestic market, which is comprised of U.S. ethnic minority groups." Washtenaw can be found online at http://www.thewashtenawgroup.com.

HomeBanc Corp., Atlanta, has reported a net loss of $783,000 ($0.01 per share) for the third quarter under generally accepted accounting principles, an improvement over a GAAP loss of $19.8 million ($0.53 per share) a year earlier.Because HomeBanc is structured as a real estate investment trust, its management said REIT taxable income is also a meaningful measure of its performance. Using that measure, HomeBanc had income of $14.2 million ($0.25 per share) in the third quarter. "The third-quarter performance represents a trend of solid and consistent growth of our loan production, credit performance, and spread in our loan portfolio," said Patrick S. Flood, HomeBanc Corp.'s chairman and chief executive. Origination volume for the quarter was $1.8 billion, up 26% from $1.4 billion for the same period in 2004. Its pipeline of loans in progress grew 33% from Sept. 30, 2004, to the same date this year, when it stood at $1.5 billion. HomeBanc can be found on the Web at http://www.homebanc.com.

Home prices now average a record 3.5 times disposable household income, and they will have to slide down to the average level as interest rates rise, according to David Wyss, chief economist at Standard & Poor's.Speaking at a New York seminar organized by the rating agency, Mr. Wyss said it is now "awfully cheap" to buy a house, given historically low interest rates. Most of the home price rise comes from the fact that people are buying bigger and bigger houses, but it's more of a local phenomenon that is occurring in high-priced areas such as the Northeast, the West, and Florida, Mr. Wyss said. Home price appreciation is going on around the world, he noted. In the United Kingdom, for instance, there has been a 150% appreciation in home prices over the period 1997-2005, according to Mr. Wyss. S&P can be found on the Web at http://www.standardandpoors.com.

The average 30-year fixed mortgage rate rose from 6.31% to 6.36% over the seven-day period ended Nov. 10, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate increased from 5.85% to 5.89%, the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages rose from 5.76% to 5.81%, and the average rate for one-year Treasury-indexed ARMs climbed from 5.09% to 5.12%. Fees and points averaged 0.5 of a point for 30-year fixed-rate mortgages and 0.6 of a point for the other categories. "News that wages grew faster than had been expected in October reinforced fears of inflation in the financial markets, and that bumped up interest rates again this week," said Frank Nothaft, Freddie Mac's chief economist. "Consumer Price Index and Producer Price Index figures due out [the week of Nov. 14] will help to confirm or deny whether market concerns are warranted." A year ago, the average 30-year and 15-year fixed rates were 5.76% and 5.16%, respectively, and the average one-year ARM rate was 4.16%, Freddie Mac said.

LTC Properties Inc., Westlake Village, Calif., has announced the signing of a $90 million, three-year unsecured credit agreement.The company said the agreement provides a revolving line of credit at interest rates lower than those of its previous credit agreement. Bank of Montreal, Chicago Branch, is the administrative agent for the agreement, Harris Nesbitt Corp. is co-lead arranger and book manager, and Key Bank NA is co-lead arranger and syndication agent. LTC, a real estate investment trust that invests in long-term care and other health care facilities, can be found on the Web at http://www.ltcproperties.com.

To kick off Rebuilding Together's new "Serving Those Who Serve" initiative, Countrywide Home Loans is paying the next two years of U.S. Army Sgt. Robert Bonner's mortgage payments.The gift will help Sgt. Bonner and his wife, who recently gave birth to the couple's fourth child, "through a transition most of us can't imagine," said Sandy Samuels, Countrywide's chief legal counsel and a senior managing director at the Calabasas, Calif.-based mortgage company. A medic -- and a Countrywide customer -- Sgt. Bonner lost both legs and suffered partial loss of his sight while serving in Iraq in 2004. Rebuilding Together is a volunteer organization that rehabs the houses of low-income families, and its new initiative will provide modification services to military personnel returning from the Middle East war zone with critical injuries. Countrywide can be found online at http://www.countrywide.com.

NetBank Inc., Atlanta, has announced a delay in reporting its third-quarter financial results because of apparent "irregularities" in $13 million of conforming mortgage loans the company originated and sold to investors.The company said it intends to issue the third-quarter results after the close of the market on Nov. 14. "These loans appear to have some irregularities stemming from the appraisal and underwriting process," NetBank said. A telephone call with NetBank's management will follow the issuance of the results, and the call will be audiocast on the company's website, NetBank said. The company can be found online at http://www.netbankinc.com.

Origen Financial Inc., Southfield, Mich., has reported a net loss of $6.1 million ($0.24 per share) for the third quarter, compared with net income of $1.4 million ($0.06 per share) a year earlier.The manufactured housing mortgage lender blamed loan-loss provisions and asset impairment charges as a result of hurricanes Katrina and Rita plus a $900,000 charge to earnings as a result of eliminating loan-loss recourse liability with Vanderbilt Mortgage and Finance, Knoxville, Tenn. The charge to earnings as a result of the hurricanes totaled $4.7 million. In spite of the loss, Origen, structured as a real estate investment trust, has announced that it will pay a quarterly dividend of $0.06 per share to holders of its stock as of Nov. 21. The factors considered by the company's board included the profitability of its ongoing operations, liquidity, and estimated REIT taxable income, Origen said.

La Quinta Corp. and La Quinta Properties Inc., both of Dallas, have announced a merger agreement under which they would be acquired by an affiliate of The Blackstone Group in a transaction valued at approximately $3.4 billion.The cash purchase price of $11.25 per paired share represents a 37% premium over the Nov. 8 closing price of $8.22 per share, said La Quinta, an owner and operator of limited-service hotels. Morgan Stanley acted as La Quinta's financial adviser, and Bear Stearns, Deutsche Bank, and Merrill Lynch were financial advisers to Blackstone, which has offices in New York, Los Angeles, London, Paris, and several other cities. The companies can be found on the Web at http://www.lq.com and http://www.blackstone.com.

Emigrant Savings Bank, New York, has announced its entry into the West Coast market with the formation of a wholly owned subsidiary, Emigrant Realty Finance Inc., in Los Angeles.Emigrant Realty, which will be led by Chris Grey and David Feingold, is an extension of the bank's real estate and commercial lending group headed by senior executive vice president and chief credit officer Patricia Goldstein. The new subsidiary has targeted $2 billion to invest over the next 12 to 18 months in a variety of real estate and corporate finance transactions, Emigrant Savings said. "Emigrant is establishing itself as a national capital source for real estate and corporate financing," said Mr. Grey. "We will focus on providing capital for larger, more institutional projects and sponsors." Mr. Grey and Mr. Feingold were previously executives with Highridge Partners.

The Market Composite Index, an overall measure of mortgage applications, rose from 646.7 to 661.3 on a seasonally adjusted basis during the week ended Nov. 4, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications increased 1.0% on the week, but were down 9.2% from the level recorded a year earlier. The Purchase Index rose from 437.6 to 465.7 on a seasonally adjusted basis, while the Refinance Index declined from 1862.8 to 1798.8. The four-week moving average for the Purchase Index fell from 469.4 to 468.4, and the comparable average for the Refinance Index fell from 1970.1 to 1918.5. Refinancings represented 41.7% of total applications, down from 43.6% the previous week, while adjustable-rate mortgages accounted for 31.6%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages increased from 6.21% to 6.31%, and points (including the origination fee) increased from 1.27 to 1.37 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mortgagebankers.org.

The Federal Reserve Board is prepared to examine nonbank subsidiaries of bank holding companies in certain cases where Home Mortgage Disclosure Act data point to possible fair lending violations, according to a Fed official.Although the Fed regulates BHCs, it rarely examines the mortgage banking and consumer finance subsidiaries of holding companies. The Federal Trade Commission has enforcement powers over those entities. But a Federal Reserve Board policy allows for exceptions under special circumstances, according to Fed special counsel Robert Cook. In cases where the HMDA data are "fairly definitive," Mr. Cook said, Fed examiners would approach an institution to seek more information about the disparities that showed up in the subprime loan pricing data. "We would ask what they have done about it and then work out something on whether they will share it with us," Mr. Cook told MortgageWire. In severe cases, "they could go in and do an exam," he said. The Fed special counsel indicated that Fed examiners have approached four or five BHC subsidiaries where the pricing data have raised concerns about disparate treatment of minority borrowers. The Fed can be found on the Web at http://www.federalreserve.gov.

MuniMae, a Baltimore-based investor (and lender) in mainly affordable housing, has reported net income of $20.4 million ($0.52 per share) for the third quarter, a 77% increase from $11.5 million ($0.32 per share) a year earlier."Although our tax-exempt bond originations in 2005 have fallen significantly below 2004 levels, production volumes remain strong in our other lines of business, and the continued low interest rate environment has enabled us to sell selected investments at very attractive cap rates," said Michael Falcone, president and chief executive officer of MuniMae. The company can be found online at http://www.munimae.com.