Originations

CoreStar Financial Group, a Timonium, Md.-based mortgage banking company focused on the subprime market, has named Kurt Kabula to lead the expansion of its national wholesale division in the Southeast.CoreStar said its rapid growth in Florida, Georgia, Alabama, and the Carolinas is expected to result in a 200% increase in its geographically dispersed employee base by the end of the year. Because Mr. Kabula's immediate focus will be on developing sales in Florida, he will be based in Ft. Lauderdale, but will spend an equal amount of time in Timonium, CoreStar said. The company can be found on the Web at http://www.corestar.com.

Stuart J. Boesky will step down Nov. 15 as chief executive officer of CharterMac, New York, and American Mortgage Acceptance Co., a New York-based real estate investment trust of which CharterMac is the external adviser, the companies have announced.In addition to his CEO role, Mr. Boesky is also stepping down as a member of CharterMac's board of trustees and as chairman and president of AMAC. CharterMac chairman Stephen M. Ross, who will become interim CEO of the company, lavished praise on Mr. Boesky for his nearly 20 years at CharterMac and said he will stay on as a consultant to both companies for a year. Jeff T. Blau, president of The Related Cos. and a member of CharterMac's board, has been named interim chairman and CEO of AMAC, and CharterMac president Marc D. Schnitzer has been named president of AMAC. "I felt it was the right time in my career for me to tackle some new challenges and opportunities," Mr. Boesky said. CharterMac is a real estate finance company that focuses on multifamily financing. The companies can be found online at http://www.chartermac.com and http://www.americanmortgageco.com.

First Advantage Corp., St. Petersburg, Fla., and First American Corp., Santa Ana, Calif., have jointly acquired a 75% ownership share of LeadClick Media Inc., an online lead generation and marketing company based in San Francisco.The purchase price is $150 million, of which First American contributed $45 million in cash and First Advantage the rest in a combination of cash, stock, and notes. LeadClick provides its services to the real estate, automotive, and financial services markets. "These lead generation data services will complement both First American and First Advantage by adding a valuable line of high-quality business leads that we can sell to our customers," said Parker S. Kennedy, chief executive of First American and chairman of First Advantage. "The services will improve the sales efficiency of our customers, helping them to close more transactions and, in turn, consume more of our other products and services." The terms of the agreement have the buyers acquiring the remaining 25% of LeadClick over the next three years. First Advantage became a publicly traded company in June, with First American owning the majority of its stock.

MuniMae has announced that its subsidiary MuniMae TE Bond Subsidiary LLC has completed a $100 million preferred equity offering in a private placement.The trust sold $18 million of series A-3 cumulative perpetual preferred shares; $16 million of series A-4 cumulative perpetual preferred shares; $22 million of series B-3 subordinate cumulative perpetual preferred shares; $10 million of series C-3 subordinate cumulative perpetual preferred shares; and $34 million of series D subordinate cumulative perpetual preferred shares. MuniMae can be found online at http://www.munimae.com.

Criimi Mae, a Rockville, Md.-based commercial mortgage real estate investment trust, has reported net income of $5.8 million ($0.36 per share) for the third quarter, compared with a net loss of $9.3 million ($0.60 per share) for the third quarter of 2004.The company said its special servicing portfolio decreased 41% during the third quarter, to $486 million. "The increase in liquidity to almost $72 million demonstrates the significant cash flow that has been generated by our seasoned portfolio of [commercial mortgage-backed securities], and the performance of the mortgages underlying our CMBS has continued to improve as evidenced by the decreasing special servicing portfolio," said Barry Blattman, chairman and chief executive officer of Criimi Mae. Criimi Mae is being acquired by CDP Capital Financing, a Canadian company. The commercial mortgage REIT can be found online at http://www.criimimaeinc.com.

Lancaster Mortgage Bankers, a wholesale lender based in Warren, N.J., is deploying Mozart AUS, an automated underwriting application by Overture Technologies, Bethesda, Md."We're leveraging Overture's Mozart AUS to produce our own proprietary underwriting engine for use within our website," explained Elliot Salzman, Lancaster's president and chief executive officer. "We expect to be able to increase volume by 20%-30% while keeping the same number of staff." Mozart AUS offers Lancaster the ability to automatically price, select, and underwrite all conforming and nonconforming loans, including alternative-A, subprime, and interest-only products. The application is expected to be fully operational by early 2006. Overture can be found on the Web at http://www.overturetechnologies.com.

Three tranches of Solstice ABS CDO Ltd. have been downgraded by Fitch Ratings.The downgrades in the collateralized debt obligation were as follows: class B notes, from AA-minus to BB-plus; class C notes, from BBB to CC; and preference shares, from B to C. Fitch said the downgrades stemmed from "continued collateral deterioration leading to a decline in the coverage ratios." The percentage of collateral rated CCC-plus and below has increased from 9% to 24% since Aug. 31, 2004, Fitch said. Solstice consists of 40.6% residential mortgage-backed securities, 36.0% CDOs, 12.3% asset-backed securities, 5.5% corporate debt securities, 3.8% commercial MBS, and 1.8% real estate investment trusts. Fitch can be found online at http://www.fitchratings.com.

Corporate investment in new business facilities such as office buildings, industrial campuses, and call centers rose to a record $1.2 trillion in the United States in 2004, its highest level since 2000, according to a new publication by Ernst & Young LLP.Of the total, $270 billion was spent on new facilities and $950 billion was spent on replacing or modernizing facilities, says the report, titled "US Investment Monitor." Six of the top 15 capital investment projects announced last year are in areas hit by Hurricane Katrina, but they were in the early stages of development and appear to be ready to proceed, Ernst & Young said. The state in which business facilities expanded the fastest in 2004 was Texas, where $13 billion was invested, more than twice as much as second-place Michigan, the company reported. Ernst & Young can be found online at http://www.ey.com.

Even though the mortgage industry is seeing signs of declining production, employment in the sector surged to a new high in September, according to government figures released Nov. 4.Mortgage banking and brokerage firms employed 529,300 full-timers at the end of September -- a 10% gain compared with the total recorded in the same month last year and a 0.68% increase from the total in August. The Department of Labor says the "real estate credit" industry (mortgage bankers) employed 392,900 workers at September's end while mortgage and "nonmortgage" loan brokers employed 136,400. (Some nonmortgage jobs are probably represented in the numbers.) Mortgage rates have been rising over the past month. As MortgageWire neared its deadline, the yield on the 10-year Treasury note stood at 4.66%.

The Pacific Exchange, San Francisco, has begun trading options on CB Richard Ellis Group, the real estate investment management firm based in Los Angeles.The options will trade on the March expiration cycle with exercise limits set at 7.5 million shares. The issue will be traded by lead market makers Ross Goodheart, Ken Keating, and Barterv Vartanian of Group One Trading LP.

Medical Properties Trust, a Birmingham, Ala.-based real estate investment trust, has announced an agreement for a $100 million secured revolving credit facility with Merrill Lynch Capital.The company said the principal amount may be increased to $175 million under certain conditions. Borrowings will bear an interest rate of 235-275 basis points above the one-month London interbank offered rate. MPT can be found online at http://www.medicalpropertiestrust.com.

The Pending Home Sales Index declined to 128.8 in September, 0.3% lower than the record high of 129.2 in August and 3.3% above that of a year earlier, according to the National Association of Realtors.The index is based on pending sales of existing homes, including single-family, condominium, and cooperative. (A sale is deemed pending when the contract has been signed but the transaction has not closed, a period that typically lasts one or two months, the NAR said.) David Lereah, the NAR's chief economist, said the index indicates momentum in home sales. "We're still seeing a post-Katrina boost in homes sales activity, where the needs of displaced residents are supplementing a fundamentally strong market," Mr. Lereah said. "Aside from this temporary lift, the market is entering a period of transition in which we will see a somewhat slower but more sustainable pace of home sales -- a period that is expected to be historically healthy." An index of 100 is equal to the average level of contract activity in 2001, the first year for which the NAR has analyzed data.

Investors overwhelmingly believe that the U.S. housing market is overvalued, but they still see real estate as a better investment than the stock market, according to an investor survey released by TIAA-CREF, New York.The study, conducted by Roper Public Affairs and Media for TIAA-CREF, found that 73% of surveyed investors believe U.S. housing is overvalued, while only 19% believe it is valued appropriately. Nevertheless, 69% of the investors said real estate is a better investment than stocks, compared with 24% who said stocks are better, the company reported. "There is a notable disconnect between the run-up in housing market values investors are seeing as homeowners, and their desire to participate in an attractive asset class like real estate over stocks and bonds," said Tom Garbutt, managing director and head of real estate at TIAA-CREF. The study also found that only 58% of the surveyed investors say housing in their own community is overvalued, and 75% say they have no plans to sell their primary residence to generate retirement income. The company can be found online at http://www.tiaa-cref.org.

Led by condominiums, housing sales are slowing and prices are falling in bellwether markets such as Las Vegas, Miami, and Orange County, Calif., according to an authority on housing.Speaking to writers and editors at a National Association of Realtors conference in San Francisco, Steve Friedman of Ernst & Young also said leading housing indicators "are flashing yellow in a growing number of markets, including Phoenix, Boston, and Washington, D.C." Mr. Friedman, the firm's national director of housing, said cancellation rates for purchases of new homes are increasing; appraised values are dropping below contract prices; houses are remaining on the market longer; buyer incentives are returning; and more real estate agents are suggesting that buyers reduce their initial asking prices. However, Mr. Friedman said he does not see a national overvaluation problem. "There's no national housing bubble, only 'bubblettes' in markets like Las Vegas," he said. The NAR can be found online at http://www.realtor.org.

Three economists at the Urban Land Institute's fall meeting in Los Angeles have weighed in with differing views on whether a housing "bubble" exists in the U.S. economy.Jeremy Rifkin, president of the Foundation on Economic Trends, Washington, said he expects the United States, like the United Kingdom, to see the deflation of a housing bubble that will lead to a "grave situation" and "lots of foreclosures in the next few years." Catherine L. Mann, senior fellow at the Institute for International Economics, Washington, noted that in Japan there was "significant economic distress" after financial markets were exposed to a decline in the value of assets they had lent against. She said she doesn't believe that the U.S. financial system is exposed in a similar manner, mainly because mortgages are securitized in this country. However, she said one effect might be to slow consumer spending. Nariman Behravesh, chief global economist of Global Insight, Lexington, Mass., said he expects some regional markets to see declines, including New England, Washington, D.C., and Florida. If home prices fall 10%, U.S. gross domestic product will slow down, Mr. Behravesh said. This would not lead to a recession unless accompanied by some other adverse event, he said.

Patelco Credit Union, Star One Credit Union, and other Bay Area CUs have announced their participation in a new $1 billion nationwide mortgage lending initiative called Home Loan Payment Relief.The HLPR loan is a three-year adjustable-rate mortgage that will be offered to borrowers with household incomes at or below the median in their market at 1% below the national average for such loans, or about 4.5% currently, the credit unions said. The required downpayment will be no more than 3%, gifts or grants are permitted, and after three years the interest rate will adjust annually to market rates (with caps of 1% a year and 5% over the life of the loan), the credit unions said. The Bay Area CUs are among 61 around the United States that offer HLPR loans and have committed nearly $1 billion to the program, they said. They added that the commitment level is expected to grow to as much as $5 billion as CU participation grows.

The average 30-year fixed mortgage rate rose from 6.15% to 6.31% over the seven-day period ended Nov. 3, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate increased from 5.69% to 5.85%, the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages rose from 5.63% to 5.76%, and the average rate for one-year Treasury-indexed ARMs climbed from 4.91% to 5.09% (its highest level since March 2002). Fees and points averaged 0.5 of a point for all mortgage categories. "Based on preliminary [gross domestic product] figures for the third quarter, the economy is expanding faster than had been expected," said Frank Nothaft, Freddie Mac's chief economist. "Originally, the markets had lowered economic expectations for the third quarter because of the impact of the hurricanes. So the news of an economy growing at such a strong pace gave financial markets a jolt and added to the impetus that caused mortgage rates to rise again this week." A year ago, the average 30-year and 15-year fixed rates were 5.70% and 5.08%, respectively, and the average one-year ARM rate was 4.00%, Freddie Mac said.

Cendant Settlement Services Group, Mount Laurel, N.J., has agreed to acquire American Title Co. of Houston, Texas American Title Co., Title Resources Guaranty Co., and their related title agencies based in Texas, from Herbert L. Williams, their owner.The terms of the deal were not disclosed. The deal gives CSSG its initial venture as a sole owner and operator of a title insurance underwriting business, namely Dallas-based Title Resources Guaranty. Texas American is the largest independent title agency in Texas. "Today's acquisition is a complementary addition to our real estate services value circle," said Richard A. Smith, chairman and chief executive of the Cendant Real Estate Services Division. "These title entities are located in local markets where they already have a leading position as a service provider for independent residential real estate brokerages. They are also well positioned to serve both our existing company-owned residential real estate brokerage offices and our franchise affiliates' independently owned offices in the future." Mr. Williams and his management team will remain in place, and the entities to be acquired will retain their current names. The firms collectively serve as a regional closing center for Cendant Mobility, a relocation company.

The National Reverse Mortgage Lenders Association has released two consumer booklets that explain how reverse mortgages can help senior citizens live at home longer by providing financial support for health care needs.One booklet, "Use Your Home to Stay at Home: A Guide for Homeowners Who Need Help Now," is aimed at seniors with immediate health care needs, NRMLA said. The other, "Use Your Home to Stay at Home: A Planning Guide for Older Consumers," is written for relatively healthy seniors who may need future assistance. The booklets were produced by the National Council on Aging with a grant from NRMLA. The association can be found online at http://www.reversemortgage.org.

Meecorp Capital Markets, a commercial real estate lender based in Fort Lee, N.J., has announced that it is providing a $75 million mezzanine/equity revolving line of credit to Asset Real Estate & Investment Co., Redding, Calif.The three-year LOC will support AREI's continued growth and acquisition of senior housing facilities around the country, Meecorp said. Meecorp can be found on the Web at http://www.meecorp.com.