Originations

BioMed Realty Trust Inc., a real estate investment trust based in San Diego, has filed a $500 million shelf registration statement with the Securities and Exchange Commission.The registration statement, which has not yet become effective, will permit the company to offer and sell up to $500 million of its debt securities, common and preferred stock, warrants, and other securities. BioMed specializes in acquiring, developing, and managing laboratory and office space in the life science industry. It can be found online at http://www.biomedrealty.com.

ForSaleByOwner.com, a website for do-it-yourself homeowners who want to avoid paying real estate commissions, has announced a partnership with Military.com to offer military personnel the tools to sell their home without a real estate agent.Under the terms of the arrangement, Military.com will direct its five million members to a specially created, jointly branded site offering the full range of ForSaleByOwner.com services. The service members will receive a 10% discount on any listings package purchased on the joint site. "For military families who are required to move regularly, paying a hefty broker commission each time becomes an unfair and costly financial burden," said Colby Sambrotto, chief operating officer of the New York-based ForSaleByOwner.com. "By partnering with Military.com, Americans who need this service the most will receive the tools and information they need to buy and sell independently -- and save thousands of dollars in the process." ForSaleByOwner.com also operates a site, YourLoanHelper.com, that offers applications for discount mortgage and refinancing services. The companies can be found online at http://www.forsalebyowner.com and http://www.military.com.

SterlingSouth Bank & Trust Co., Greensboro, N.C., has announced the formation of an alliance with Medalist Capital Inc., a regional commercial mortgage banking firm headquartered in Charlotte, N.C., to provide nonrecourse commercial mortgage products to the bank's clients and shareholders.Medalist Capital is on a pace to originate more than $500 million in commercial mortgages this year, SterlingSouth said. "This alliance is a natural extension of our strategy to differentiate ourselves from ordinary financial institutions by providing distinctive , highly individualized products and services through alliances with 'best-in-practice' Firms in their particular fields," said Ralph Strayhorn, president and chief executive officer of SterlingSouth. The bank can be found on the Web at http://www.sterlingsouth.com.

Citing FBI statistics showing mortgage fraud on the rise, Calabasas, Calif.-based Interthinx has announced the integration of its DISSCO fraud detection and prevention system with Fiserv's easyLender mortgage loan origination system.Loans originated in Fiserv's easyLender now can be instantly submitted to DISSCO for automatic screening, with no rekeying necessary. DISSCO (data integrity search and score system) is an electronic fraud-prevention tool that can instantly search hundreds of mortgage-related data fields in a loan record to identify and score misinformation, inaccuracies, and inconsistencies that could indicate fraud. A DISSCO report is issued with step-by-step recommendations on how to respond. Interthinx can be found online at http://www.interthinx.com.

Option One Mortgage Corp., Irvine, Calif., has announced the formation of a partnership with San Diego-based Prado Mortgage to help expand Option One's services to the Hispanic community and help Prado better serve its customers.Option One said the partnership was developed through its working relationship with Prado chief executive officer Gary Acosta and its involvement with the San Diego-based National Association of Hispanic Real Estate Professionals. Success in developing products for the Hispanic market "requires relentless innovation, so we wanted to align ourselves with a major lender that takes that approach to product development," Mr. Acosta said. Details of the alliance were scheduled to be announced at NAHREP's Hispanic Marketing Convention & Expo. Option One, a residential lender and a subsidiary of H&R Block, can be found online at http://www.optiononemortgage.com.

The First American Corp., Santa Ana, Calif., and the National Association of Hispanic Real Estate Professionals, San Diego, have announced the launch of the NAHREP National Referral Network on MSN Latino Finanzas, a Spanish-language Web destination.The referral network offers a wide range of integrated real estate service providers who are ready to assist Spanish-speaking consumers interested in buying a home, First American and NAHREP said. "Home seekers who choose to take advantage of this referral network can rest assured that they will be guided, end-to-end, through the homebuying process by qualified advocates committed to their satisfaction," said NAHREP chairman Frances Martinez Myers. First American can be found online at http://www.firstam.com, and MSN Latino Finanzas can be found at http://www.latino.msn.com/promo/finanzas.

More than 50 metropolitan areas representing 32% of the U.S. housing market were "extremely overvalued" and faced a high risk of price declines in the second quarter, according to an analysis by National City Corp., Cleveland, and Global Insight, Waltham, Mass.The companies said the analysis looked at 299 U.S. real estate markets and concluded that 56 metro areas may face price declines, up from 53 in the first quarter. Five areas were added to the list, and two -- Boston and Essex, Mass. -- were removed because fundamentals such as income and population gains had improved, they said. The adjustment in the Boston area "illustrates the possibility for orderly corrections, rather than inevitable crashes," said Philip Hopkins, managing director of U.S. Regional Services at Global Insight. "Outside the hottest housing markets, some signs of a slowdown in the rate of price growth were evident." The average overvaluation level fell from 22.7% to 19.9%, with 171 areas showing a decline in the extent of overvaluation in the second quarter, he said. The analysis can be found online at http://www.nationalcity.com/economics and http://www.globalinsight.com/housingindex.

Desert Capital REIT Inc., Henderson, Nev., has announced the acquisition of the final 22% of Consolidated Mortgage LLC, a private trust deed investment firm also based in Henderson.Desert Capital noted that it first announced the acquisition in November 2004 with an initial purchase of 25% of the outstanding equity, and bought an additional 23% in January, 11% in April, and 19% in July. The installment payments totaled $9 million in cash plus 450,000 shares of Desert Capital common stock, the real estate investment trust reported. The REIT can be found online at http://www.desertcapitalreit.com.

Chicago Title Land Trust Co., a wholly owned subsidiary of Fidelity National Financial Inc., Jacksonville, Fla., has acquired the land trust business assets of LaSalle Bank NA, according to FNF.The terms of the transaction were not disclosed. The land trust assets of the bank will be merged into the operations of Chicago Title, creating what FNF said will be the largest provider of land trustee services in the Eastern United States. Chicago Title will assume more than 34,000 land trusts under the acquisition, and key members of the LaSalle Bank land trust operations will join Chicago Title. FNF can be found on the Web at http://www.fnf.com.

Andrew A. Wiederhorn has been reappointed chairman and chief executive officer of Fog Cutter Capital Group, Portland, Ore., after a 14-month leave of absence during which he served a federal prison term for unlawful payment of a gratuity and filing a false tax return.Mr. Wiederhorn will take the reins of Fog Cutter, a commercial real estate mortgage brokerage, from Donald J. Berchtold, who will remain as a director and senior vice president, the company said. Mr. Wiederhorn contended that the government's prosecution, which involved the activities of Wilshire Financial Services Group (now Beverly Hills Bancorp), had been improper. One of his attorneys, Marc Blackman, said the "obscure statute" under which the prosecution was brought "disregards good faith," and that the government had never argued that Mr. Wiederhorn acted against the best interests of the company. "On the contrary, it acknowledged that Wilshire's attorney approved the transaction," he said. "The government just dug in its heels, relying on a case that says that's all irrelevant."

The average 30-year fixed mortgage rate rose from 5.98% to 6.03% over the seven-day period ended Oct. 13, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate increased from 5.54% to 5.62%, the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages rose from 5.48% to 5.57%, and the average rate for one-year Treasury-indexed ARMs climbed from 4.77% to 4.85%. Fees and points averaged 0.6 of a point for fixed-rate mortgages and one-year ARMs and 0.7 of a point for hybrid ARMs. "In spite of the job losses caused by hurricanes Katrina and Rita, the employment report was better than has been expected," said Frank Nothaft, Freddie Mac's chief economist. "This indicates that economic growth is likely to accelerate in 2006. That acceleration of growth, coupled with the specter of higher energy costs, will translate into higher long-term mortgage rates in the coming months." A year ago, the average 30-year and 15-year fixed rates were 5.74% and 5.14%, respectively, and the average one-year ARM rate was 4.01%, Freddie Mac said.

The mortgage markets will continue to be busy in the coming year, with overall production slipping by just 5%, according to the latest Freddie Mac projections.While the refinancing boom is "clearly behind us," the purchase-money sector should more than hold its own, Freddie Mac chief economist Frank Nothaft said at a National Press Club briefing. Total single-family home sales will slide a bit, too, from 7.28 million to 7.04 million over the same period, Mr. Nothaft predicted. "We can't have records every single year," he lamented. But that's still enough sales to sustain the mortgage market well into the first half of 2007. Overall, Freddie Mac's latest forecast for one- to four-family loan originations calls for a gradual decline, from $755 billion in the third quarter of 2005 to $714 billion for the same period a year from now. Further out, projections call for production to slide under the $600 billion level by the first quarter of 2007 before bouncing up again to $669 billion in the next quarter. Also over, according to the economist, is the "remarkable run" of unusually low mortgage rates as well as double-digit gains in house prices. "It's unrealistic to expect appreciation to remain at such phenomenal levels," he said. "We'll still see appreciation, but it will be nowhere near the rates of the last few years."

The senior unsecured debt of Prudential Property Investment Separate Account, rated Aa3, has been placed on review for possible downgrade by Moody's Investors Service.The action reflects "a steady increase" in effective leverage (including joint venture debt) from 20.1% of total assets at year-end 2002 to 24.5% as of June 30, 2005, and in secured debt from 18.7% at year-end 2002 to 25.9% as of June 30, the rating agency said. It also reflects "moderate" property investment performance, given the firm's high rating. "A mitigating factor is PRISA's fixed charge coverage of 6.3x as of June 30, 2005, which is much higher than most coverage ratios for commercial real estate firms, though it has declined from 8.4x for 2002," Moody's said. "In addition, PRISA maintains ample liquidity, with strong equity investor interest." PRISA is managed by Prudential Real Estate Investors, a full-service real estate adviser that is part of Prudential Insurance. Moody's can be found online at http://www.moodys.com.

One-third of low- and middle-income consumers are using their credit cards to pay basic living expenses -- including their monthly mortgage, according to a new study released Oct. 12.However, the study -- sponsored by the Washington-based Center for Responsible Lending and New York-based Demos -- offered no hard dollar figures on the practice. CRL and Demos found that even though consumers are using home equity loans to pay down their credit cards, many households are still carrying huge card balances, increasing their overall debt levels. Researchers said 20% of consumers "who had paid off some credit card debt with a mortgage refinance in the last three years had added $12,000 to their mortgage debt, and at the time of the survey still had average credit card debt of $14,000." (See the Oct. 11 issue of National Mortgage News for full details.)

The Market Composite Index, an overall measure of mortgage applications, fell from 713.5 to 694.8 on a seasonally adjusted basis during the week ended Oct. 7, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications decreased 2.6% on the week but were up 5.4% from the level recorded a year earlier. The Purchase Index fell from 473.8 to 469.5 on a seasonally adjusted basis, while the Refinance Index declined from 2107.4 to 2004.9. The four-week moving average for the Purchase Index fell 2.2%, from 492.7 to 481.7, and the comparable average for the Refinance Index fell 2.2%, from 2191.6 to 2143.2. Refinancings represented 43.5% of total applications, down from 44.5% the previous week, while adjustable-rate mortgages accounted for 29.5%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages increased from 5.94% to 5.98%, and points (including the origination fee) increased from 1.21 to 1.22 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mortgagebankers.org.

Home sales projections by the National Association of Realtors have moved even higher in the wake of hurricanes Katrina and Rita, and now call for record existing-home sales of 7.07 million this year, the NAR has reported.That would amount to a 4.2% rise, the association said. As for new-home sales, the NAR is projecting a 7.1% increase in 2005, to 1.29 million. And the forecast for single-family and multifamily housing starts calls for a 4.5% increase to 2.04 million units this year, the best overall showing since 1973, while single-family starts alone are projected to set a record of 1.70 million, the association said. "Post-Katrina, our sales projections for this year have moved even higher," said NAR chief economist David Lereah. "Short-term momentum is very strong, and our Pending Home Sales Index just set a record. In addition to the housing needs of hurricane victims, we may be seeing some 'fence jumping' from homebuyers who are getting into the market before interest rates move higher." The NAR can be found online at http://www.realtor.org.

The mortgage industry's average profit per loan declined by almost 50% in 2004, according to an annual cost study conducted by the Mortgage Bankers Association of America.The MBA cost study found that average loan production profits fell to $657 per loan in 2004, down from $1,272 in 2003. As loan production volume shrank, per-loan operational costs increased and were only partially offset by secondary marketing income, including loan servicing values. "The year 2004 marked a departure from the recent years of unprecedented mortgage activity and profitability," said Douglas Duncan, MBA chief economist and senior vice president. "Narrowing warehouse interest spreads, increased pricing pressures, and higher sales and fulfillment costs on a per-loan basis posed challenges for mortgage bankers. But at the same time, we did see recoveries in the area of servicing -- after three years of worsening losses, servicing operations posted a profit in 2004 on a per-loan basis." That servicing profit averaged $21 per loan last year, compared with a net loss of $166 per loan in 2003. The MBA can be found online at http://www.mortgagebankers.org.

Two classes from Lehman Brothers floating-rate commercial mortgage trust 2002-LLF C3 have been downgraded by Fitch Ratings.Class L was downgraded from BBB-minus to BB-plus, and class M was downgraded from BB-minus to B-plus. Fitch also upgraded three classes in the transaction and affirmed the ratings on three others. The rating agency attributed the downgrades to "the lack of substantial improvement in leasing activity and net cash flow performance at both the Michigan Industrial Portfolio and the Boulder Portfolio since Fitch's last review."

Lexington Corporate Properties Trust, a New York-based real estate investment trust, has announced the formation of a specialty investment company aimed at expanding the REIT's acquisition opportunities.The investment company, Lexington Strategic Asset Corp., has raised net proceeds of approximately $61.6 million through the sale of 6.738 million shares of stock in a private placement, the REIT reported. In connection with the private placement, Lexington said it will contribute to LSAC its indirect ownership interest in four real estate assets and financing deposits. The new company will invest in general-use properties with private or middle-market tenants, special-purpose properties, non-U.S. properties in the Americas with U.S. dollar-denominated rents, and other specialized facilities or assets, according to the REIT. Lexington can be found online at http://www.lxp.com.

There is no "bubble" in the commercial real estate market, according to several panelists at the recent Moody's Investors Service annual commercial mortgage-backed securities conference.At a panel session moderated by Tad Philipp of Moody's, Jeffrey Fastov of Goldman Sachs recalled that in the late 1980s the real estate market felt as it does today because of rising prices. "Real estate cycles are not going away, but it's not a bubble," Mr. Fastov said. The difference is that real estate was then a "dark industry" and it's transparent now, he maintained. Mark Warner of BlackRock said he isn't worried about the possibility of a 1991-92-type downturn, while Robert Ricci of Wachovia Securities said he believes that "we've developed technologies that are more efficient." And Kenneth Doiron of Hartford Investment Management contended that the real estate industry has come a long way, becoming more transparent and being subject to market discipline. He said he doesn't see a bubble, but expects that "the cycle will return."