Originations

CUNA Mutual Group, Madison, Wis., has signed a letter of intent to sell most of its mortgage operations to PHH Mortgage, Mt. Laurel, N.J., for an undisclosed amount.News of a possible sale was first reported by National Mortgage News in its Oct. 3 issue. According to a statement released by CUNAMG, PHH will acquire "certain mortgage-related assets, and assume origination, servicing and sub-servicing contracts" for CUNA Mutual Mortgage Corp. Over the past 12 months, CUNA Mutual Mortgage funded $1 billion in residential loans -- mostly through wholesale and correspondent relationships. At deadline time it was unclear who would wind up with CUNAMMC's $11 billion in servicing rights.

A predatory-lending bill that calls for licensing and registration of mortgage brokers would not pre-empt the states from adopting stricter standards, according to the bill's author, Rep. Bob Ney, R-Ohio.The House Financial Services subcommittee chairman said the bill creates "minimum standards" for mortgage broker licensing. The provision is not pre-emptive and does "not in any way limit the ability of states to go beyond those requirements for stricter standards." Meanwhile, a former president of the National Association of Mortgage Brokers objected that the bill does not require the licensing of loan officers at mortgage companies and banks. The NAMB's Joe Falk noted that originators move from brokerage firms to mortgage companies and said it would weaken the consumer protections in the bill if loan officers were excluded. The Mortgage Bankers Association supports the bill, sponsored by Reps. Ney and Paul Kanjorski, D-Pa., but they are concerned that it would not prevent the states from licensing loan officers. "Unfortunately, some states have moved beyond corporate licensing to require individual loan officers and support staff to be licensed," the MBA's Teresa Bryce testified. Rep. Tubbs Jones, D-Ohio, argued that low-income and minority homeowners don't know there is a difference between mortgage brokers, and therefore both should be licensed.

SL Green Realty Corp., a New York-based real estate investment trust, has announced the arrangement of a new $500 million senior unsecured revolving credit facility that can be expanded to $800 million.The three-year facility, which replaces existing credit facilities, bears an adjustable interest rate that currently stands at 85 basis points over the London interbank offered rate. It includes an option for a one-year extension. "The upfront fees for this facility were 60% less than that of the previous facility, and the borrowing spreads have been reduced by up to 25 basis points from their existing levels," the REIT said. SL Green specializes in acquiring, owning, and managing office properties in Manhattan. It can be found online at http://www.slgreen.com.

Bridger Commercial Funding, a commercial mortgage market intermediary that provides loan origination and debt trading services, has opened a new Northeast regional office in New Jersey and appointed Gina Mackenzie to head the office.Ms. Mackenzie will work with Bridger's bank clients in New York, New Jersey, Connecticut, and northeastern Pennsylvania, Bridger said. In order to accommodate growing volume in its commercial mortgage-backed securities business, which Bridger expects to be about double last year's volume, the company also plans to open other offices in the Northeast and add staff in its New Jersey and Washington, D.C., offices. "So far this year we've originated more CMBS loans with more bank clients -- both old and new -- than ever before, outpacing the industry's growth rate by more than three times," said Bob Schonefeld, Bridger's chief executive officer.

ABN Amro Mortgage Group, Ann Arbor, Mich., has announced that its Affinity Lending Group is offering discounted mortgage closing costs and a private-label version of Mortgage.com to AT&T employees.AT&T employees can now get access to information through the company's intranet on a variety of AAMG's mortgage products and services, such as its Guaranteed OneFee Mortgage, and receive a $300 discount on the mortgage closing costs, according to AAMG. In addition, AT&T employees have access to interest rate quotes and mortgage calculators, can submit mortgage applications online, and can use a dedicated 800 number to contact AAMG customer service representatives. The companies can be found online at http://www.abnamro.com and http://att.mortgage.com.

A joint task force on state banking and mortgage regulations has approved uniform licensing applications for mortgage companies and individual loan originators that will be tested by nearly a dozen states on new licensees.The Conference of State Bank Supervisors and American Association of Residential Mortgage Regulators developed the uniform applications to reduce the administrative burden on state-regulated lenders that operate regionally and nationally. CSBS/AARMR's next goal is to create a Web-based system that would allow companies and originators to apply for and renew licenses online. The website, similar to one used by the securities industry to track brokers, would list all registered companies, loan officers, and mortgage brokers along with any criminal history or enforcement actions. "This would allow states to identify fraudulent and abusive lenders and brokers when they leave one state and seek licenses in another," North Carolina Banking Commissioner Joseph Smith told a House panel Sept. 29. It would also allow companies to check the backgrounds of new hires, he said.

The average 30-year fixed mortgage rate rose from 5.80% to 5.91% over the seven-day period ended Sept. 29, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate increased from 5.37% to 5.48%, the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages rose from 5.31% to 5.44%, and the average rate for one-year Treasury-indexed ARMs climbed from 4.48% to 4.68%. 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. "This past week's increase in mortgage rates reflects market anxieties over inflationary pressures, energy price increases, and slipping consumer confidence," said Frank Nothaft, Freddie Mac's chief economist. "Taken together, these developments suggest less personal spending during the last quarter of the year and additional upward pressure on mortgage rates." A year ago, the average 30-year and 15-year fixed rates were 5.72% and 5.12%, respectively, and the average one-year ARM rate was 3.97%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

Citigroup and the Citigroup Foundation have announced a $2 million grant to Habitat for Humanity International in support of "Operation Home Delivery," Habitat's program to provide housing for families displaced by Hurricane Katrina.Citigroup said the company, its employees, and the foundation have so far committed up to $10 million to hurricane disaster relief and recovery, and have been regular supporters of Habitat. "Since 1998, Citigroup has invested more than $16.8 million in zero-interest-rate mortgage programs that allow Habitat partner families to pay zero interest on their mortgage loans," said Kevin Kessinger, Citi's chief operations and technology officer. "Citigroup is the largest single investor in this program." The company can be found online at http://www.citigroup.com.

In the wake of hurricanes Katrina and Rita, the spread of mold could have consequences for mortgage lenders and could result in downgrades for commercial mortgage-backed securities, according to Environmental Assurance Group, Hartford, Conn."Since insurers recently excluded mold coverage on policies for homeowners and businesses, the fate of exposed parties -- mortgage lenders, commercial mortgage-backed securities underwriters, and investors -- has been an open question," said Charles Perry, a principal at EAG. "The recent hurricanes have brought the financially catastrophic aspect of the mold issue to the forefront." According to EAG, mold exclusions could allow insurers to avoid billions of dollars in claims on Katrina and Rita, as well as damages down the line.

Class A-5 of Asset Securitization Corp.'s commercial mortgage pass-through certificates, series 1995-MD IV, has been placed on Rating Watch Negative by Fitch Ratings.Fitch also upgraded one class in the transaction and affirmed the ratings on five others. "The placement of class A-5 on RWN is due to unpaid interest shortfalls in the amount of $12,422 and the expectation of future shortfalls to the class, currently estimated at $50,000," Fitch reported. "The class will remain on RWN until the final amount of the shortfalls can be determined and the overall impact on the respective certificates is fully analyzed." The current shortfalls are related to a class action lawsuit that the master servicer, GMAC, spread across 178 commercial mortgage-backed securities transactions, and to legal expenses associated with a separate issue tied to the Hardage hotel loan, the rating agency said. "None of the shortfalls described herein are credit related, and all are expected to be one-time occurrences," Fitch said. The rating agency can be found online at http://www.fitchratings.com.

The volume of online wholesale mortgage lending exceeded that of online retail lending by nearly three to one in 2004, according to TowerGroup, a financial services research and consulting firm based in Needham, Mass.Online wholesale lending grew from 15.0% of total mortgage origination in 2001 to 20.5% last year, while retail online lending rose from 3.5% to 7.3% during the same period, TowerGroup said. The systems that support online wholesale lending -- such as website hosting, loan product and price management, and third-party settlement services -- "have become mission-critical for virtually all wholesale lenders, regardless of size," the company said. A new report by TowerGroup, "Wholesale Mortgage Lending: Online Lending Adoption, Lender Segments and Technology," looks at the growth of online lending and analyzes wholesale lending segments by lender size and product type. The company can be found online at http://www.towergroup.com.

The Market Composite Index, an overall measure of mortgage applications, fell from 772.2 to 721.2 on a seasonally adjusted basis during the week ended Sept. 23, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications decreased 7.1% on the week and were down 0.5% from the level recorded a year earlier. The Purchase Index fell from 500.3 to 483.1 on a seasonally adjusted basis, while the Refinance Index declined from 2353.7 to 2106.6. The four-week moving average for the Purchase Index rose 0.6%, from 495.9 to 499.0, and the comparable average for the Refinance Index fell 0.9%, from 2274.3 to 2254.0. Refinancings represented 43.9% of total applications, down from 45.6% the previous week, while adjustable-rate mortgages accounted for 28.8%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages increased from 5.81% to 5.85%, and points (including the origination fee) decreased from 1.21 to 1.19 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mortgagebankers.org.

The Illinois Supreme Court has issued a major ruling favoring banks, mortgage lenders, and trustees of securitized mortgage loans on whether a state law can severely restrict the fees that lenders can charge.The court held that the 30-year old Illinois Interest Act's limitations provision, which prohibits lenders from charging more than 3% of the principal in points and fees when the interest rate is in excess of 8%, is pre-empted by the federal Depository Institutions Deregulation and Monetary Control Act. "It's a decision the industry hoped for," said Laurence Platt, a partner with the Washington law firm of Kirkpatrick & Lockhart LLP. "It's good news for lenders, because it eliminates the exposure they thought they might have in excess of the cap. Going backwards, many thought their loans on the subprime side had been unlawfully originated. It helps lenders going forward by enabling them to originate loans without artificial price restriction." The court's ruling in U.S. Bank National Association v. Michael Clark reversed an appellate court decision that held that Illinois lawmakers had opted out of the pre-emption clause under the federal law. Dianne Rist, a partner at Chapman & Cutler who coordinated the defense, said the decision "should bring to an end a cottage industry of lawsuits against lenders in Illinois that has arisen since the appellate court's decision upheld the Interest Act's limitation on points and fees for residential mortgage loans."

Fortune Lending Group LLC, Southbury, Conn., has announced the formation of the Financial Professionals Mortgage Network, which enables certified public accountants and other finance professionals to originate mortgage loans for their clients.Fortune, a mortgage lender and broker, said the network will allow CPAs to control a mortgage deal and earn a fee for doing so. "Rather than refer the client to a bank or mortgage broker and hope for the best, CPAs can now play a crucial role in ensuring that the borrower is obtaining the right mortgage at the right price," said Robb Heering, Fortune's chief executive officer. "We have found that CPAs, financial planners, and certain other finance professionals are best suited to assisting consumers with decisions regarding both residential and commercial mortgages." Jay B. Matz, an attorney with Matz & Levitan in Danbury, Conn., and the network's legal counsel, said the business model is in compliance with the Real Estate Settlement Procedures Act.

Sales of existing single-family homes in Florida totaled 21,318 in August, an increase of 4% (from the level recorded a year earlier) that follows decreases reported in the previous two months, according to the Florida Association of Realtors.The median sales price of homes sold in August climbed to $246,500, up 31% from $188,700 in August 2004, FAR said. Among the state's larger markets, resales increased 15% in the Jacksonville MSA, and 9% in the Tampa-St. Petersburg-Clearwater and Orlando MSAs, but they fell 5% in Miami, FAR reported.

The median price of an existing home in California was 20.1% higher in August than the level recorded a year earlier, and resales were up 7.0%, according to the California Association of Realtors.The median price of an existing single-family detached home in California totaled $568,890 in August, compared with $473,520 a year earlier, CAR reported. The seasonally adjusted annualized rate of closed escrow sales of existing single-family detached homes totaled 632,240, up from the 591,150-unit rate recorded in August 2004, CAR said. "While fixed mortgage interest rates have not increased, adjustable rates have risen in reaction to the Federal Reserve and a more general increase in short-term rates," said CAR president Jim Hamilton. "Since more buyers are relying on adjustable-rate mortgages to finance the purchase of their homes, buyers may be moving more quickly to make the home purchase decision in anticipation of future rate increases. This is adding more pressure to the price of a home." CAR can be found online at http://www.car.org.

Commercial and multifamily mortgage debt outstanding passed the $2.4 trillion mark in the second quarter, an increase of 3.1% from the level recorded in the first quarter, according to the Mortgage Bankers Association.Commercial banks held the largest share of the total, at $1.05 trillion, or 43%, the trade association said. Commercial mortgage-backed securities conduits were next, holding $467 billion, or 19%, of the debt outstanding. Life insurance companies held $258 billion, or 11% of the total, and savings institutions held $191 billion, or 8%. The government-sponsored enterprises held another 8% of the total. "This sustained investment in commercial and multifamily real estate shows up in record origination volumes, record loan servicing volumes, record levels of CMBS issuance and, here, in record levels of commercial/multifamily mortgage debt outstanding," said Doug Duncan, the MBA's chief economist. The MBA can be found online at http://www.mortgagebankers.org.

New home sales declined 9.9% in August (from July's total) to a seasonally adjusted annual rate of 1.237 million units, a sign that the red-hot housing market may finally be slowing.However, compared with sales in the same month last year, new-home sales rose 6.8%. The sales figures, courtesy of the Census Bureau and the Department of Housing and Urban Development, also show that the monthly supply of new homes stood at 4.7% in August, the highest reading all year. On Monday the National Association of Realtors reported that existing-home sales increased 2% in August from July's level to 7.29 million units annualized, the second-best reading ever by the industry.

Community Capital Bancshares Inc., Albany, Ga., has announced the filing of an application to form a savings bank in Charleston, S.C., that would be named Atlantic Bank & Trust and would operate a recently acquired Charleston mortgage company as its mortgage banking division.In June, CCB opened a loan production office of its lead bank, Albany Bank & Trust, in Charleston, and that office would become the home office of Atlantic Bank, the company said. Albany Bank recently purchased East Bay Capital Mortgage, Charleston, which would become the mortgage banking division of the new bank. The new bank is being proposed by three Charleston-area bankers: Hal Cobb, previously of RBC Centura; Dean Lang, previously of SouthTrust Wachovia; and Chris Landers, previously of East Bay Capital Mortgage. Mr. Cobb would be president of Atlantic Bank, Mr. Lang would be its chief lending officer, and Mr. Landers would be its chief mortgage officer, according to CCB. The application was filed with the Office of Thrift Supervision.

First American Commercial Real Estate Services Inc., Dallas, has announced the acquisition of Urban Appraisal Inc., a Chicago-based consulting firm.The terms of the deal were not disclosed. William Farina, the founder of Urban Appraisal, will serve as vice president of First American CRES and will oversee its Chicago office, First American said. "Our great familiarity with the city's neighborhoods and their individual economic dynamics allows us to work efficiently in the Chicago market, while our simultaneous work on multifamily projects in other large metropolitan areas gives us a solid national perspective," Mr. Farina said. "Becoming part of First American allows us to draw upon its extensive real estate information and resources, and we believe this will further expand and diversify our clientele." First American CRE Services is a member of The First American Corp. family of companies, which can be found online at http://www.firstam.com.