Originations

Wachovia, with a $132.8 billion portfolio as of June 30, is now the largest primary and master servicer of commercial mortgage-backed securities, according to the Mortgage Bankers Association.GMAC Commercial Holding, with $118.9 billion, is the second-largest CMBS servicer on the MBA's list; Midland Loan Services, with $84.3 billion, is third; and Wells Fargo Commercial Mortgage Servicing, with $52.5 billion, is fourth. LNR Partners ranks as the No. 1 special servicer named on CMBS deals. LNR is named as the special servicer to manage troubled loans on $126 billion of CMBS deals.

Opteum Financial Services, a Paramus, N.J.-based residential mortgage lender, has announced the acquisition of Integrity Home Funding LLC, a privately owned wholesale and retail mortgage banking firm based in Maywood, N.J.The terms of the transaction were not disclosed. Opteum said it will maintain Integrity's locations in Maywood and Linden, N.J., offering the same portfolio of more than 250 loan programs available at all Opteum branches. "Opteum acquired Integrity because of its outstanding track record of success in the New Jersey and New York markets, innovative product portfolio, and seasoned staff of dedicated mortgage professionals," said John Palmiotto, Opteum's senior vice president/northeast regional manager. The companies can be found on the Web at http://www.opteum.com and http://www.ihfloans.com.

Fidelity National Financial Inc., Jacksonville, Fla., has announced the acquisition of DocX LLC, an Alpharetta, Ga.-based provider of outsourced lien release and assignment services to mortgage lenders.The terms of the deal were not disclosed. FNF said DocX also offers a lien release software platform that can be licensed for use in an in-house environment, maintains a national database of county recording office information, and provides recording fee and transfer tax calculators via its patent-pending Feewise calculator. "The acquisition of DocX enhances the scale of our lien release capabilities and provides access to a marquee customer base," said FNF executive vice president Ernest D. Smith. ".... The Feewise calculator is also a great tool that can be used by our title operations in automatically calculating closing fees." FNF can be found online at http://www.fnf.com.

The average 30-year fixed mortgage rate fell from 5.77% to 5.71% over the seven-day period ended Sept. 1, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate decreased from 5.35% to 5.32%, the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages was unchanged at 5.30%, and the average rate for one-year Treasury-indexed ARMs declined from 4.56% to 4.48%. Fees and points averaged 0.6 of a point for 30-year fixed-rate mortgages and hybrid ARMs, 0.5 of a point for 15-year FRMs, and 0.7 of a point for one-year ARMs. "Market jitters about high energy costs and the spillover into other sectors of the economy have led to a decline in bond yields, which typically means lower mortgage rates," said Frank Nothaft, Freddie Mac's chief economist. "And speculation that the Federal Reserve may soon take a break in raising short-term rates reduces upward pressure on long- and short-term interest rates." Moreover, the devastation from Hurricane Katrina and the "echo effects" on future energy prices may mean mortgage rates will fall even further, he said. A year ago, the average 30-year and 15-year fixed rates were 5.77% and 5.15%, 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.

A jump in housing prices in the second quarter sent the annual rate of appreciation up to 13.4%, the largest increase in over 25 years, according to the Office of Federal Housing Enterprise Oversight.OFHEO reported that prices rose 3.2% in the second quarter, up from 2.55% in the previous quarter. "There is no evidence here of prices' topping out," said OFHEO chief economist Patrick Lawler. "On the contrary, house price inflation continues to accelerate, as some areas that have experienced relatively slow appreciation are picking up steam." The OFHEO house price index for the second quarter shows that the annual rate of house price appreciation exceeds 11% in 25 states, with Nevada and Arizona topping the list at 28.1% and 27.8%, respectively. The index is based on repeat sales and refinancings of single-family properties that are financed with conforming loans purchased by Fannie Mae and Freddie Mac. OFHEO can be found online at http://www.ofheo.gov.

ECC Capital Corp., a real estate investment trust based in Irvine, Calif., has announced the completion of a $1.03 billion securitization of subprime mortgage loans.Encore Credit Receivables Trust 2005-3 contains 14 classes of notes, including what the REIT said would be deemed by investors the equivalent of a net-interest-margin security. "With the class N notes, we were able to monetize approximately $34.5 million of residual cash flow at a 5% yield, which is lower than the implied cost of funding those cash flows with our equity," said John Kohler, executive vice president of ECC Capital. "And in a traditional structure, we would not have received residual cash flow until the required overcollateralization was built up." The joint lead managers of the deal were Wachovia Capital Markets LLC and Countrywide Securities Corp., and the co-manager was Credit Suisse First Boston LLC. ECC Capital, a mortgage finance REIT, can be found online at http://www.encorecredit.com.

The Market Composite Index, an overall measure of mortgage applications, fell from 756.2 to 722.5 on a seasonally adjusted basis during the week ended Aug. 26, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications decreased 5.7% on the week, but were up 12.7% from the level recorded a year earlier. The Purchase Index fell from 488.4 to 470.6 on a seasonally adjusted basis, while the Refinance Index declined from 2313.9 to 2187.8. The four-week moving average for the Purchase Index fell 1.2%, from 495.3 to 489.3, and the comparable average for the Refinance Index fell 0.7%, from 2256.6 to 2240.9. Refinancings represented 43.8% of total applications, up from 43.7% the previous week, while adjustable-rate mortgages accounted for 27.8%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages decreased from 5.78% to 5.73%, and points (including the origination fee) increased from 1.20 to 1.21 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mortgagebankers.org.

The Mortgage Bankers Association has released its first-ever Commercial Technology Survey, which was designed to measure the extent of computer automation in commercial lending.The survey found that more than three-fourths of survey participants have started efforts to store electronic images of loan documents, and that nearly two-thirds of the loan proposals sent from originators to lenders were submitted in electronic format, the MBA reported. The survey also found that more than half of loan underwriting packages received by lenders were received in electronic format; usage of electronic communications is high among servicers, and larger servicers are generally more electronic than smaller ones; investor reporting and remittances are almost entirely electronic; and processing property inspections is largely electronic. The survey was developed by the Technology Initiatives Committee of the MBA's Commercial Real Estate/Multifamily Finance Board of Governors. It drew responses from originators and lenders responsible for roughly $70 billion in 2004 loan originations and servicers responsible for more than 130,000 loans with an aggregate unpaid principal balance of $525 billion, the MBA said.

Fitch Ratings has reported that the impact of Hurricane Katrina may adversely affect certain Fitch-rated commercial mortgage-backed securities deals.The rating agency said it has identified 18 transactions with greater than a 5% property concentration in the area, with concentrations ranging as high as 52%. Fitch said it is especially concerned with the following 12 transactions, which provide limited or no credit support to Fitch-rated classes: ASC 1996-MD6, CALFS 1997-CTL1, CSFB 2004-C2, EPT 2003-EPR, GECMC 2000-1, GMACC 2001-C1, MSCI 2005-XLF, NLFC 1998-1, RMF 1997-1, SLCMT 1997-C1, TIAA 1999-1, and WBCMT 2004-WHL3. Since CMBS borrowers are required to carry property insurance in the United States, Fitch said it expects "minimal losses" because repair costs will ultimately be covered. The rating agency said it has contacted the master servicers of the affected transactions and expects to begin receiving property status reports in the next two weeks. Fitch can be found online at http://www.fitchratings.com.

Three subordinate tranches from two subprime mortgage transactions issued by Metropolitan Asset Funding Inc. have been placed under review for possible downgrade by Moody's Investors Service.The affected classes are classes B-2 and B-3 of series 1999-B and class M-2 of series 2000-A. The rating actions were based on the weaker-than-expected performance of the mortgage pools and the resulting erosion of credit support, Moody's said. Overcollateralization in the 1999-B deal is "almost completely depleted" and the class B-3 certificates are likely to experience losses in the near future, the rating agency reported. In addition, overcollateralization in the 2000-A deal has been "fully exhausted," the class B-1 certificates have been fully written down, and the class M-2 certificates have realized losses. The pools are backed by first-lien fixed-rate subprime mortgage loans, including a "significant" amount of seller-financed loans and loans with small average balances, Moody's said. The rating agency can be found online at http://www.moodys.com.

Originations of commercial and multifamily loans jumped to $44.4 billion in the second quarter, setting a new record, according to the Mortgage Bankers Association.The volume was 25% higher than originations for the second quarter of 2004. However, mortgage banker originations for Fannie Mae dropped 13% from the level recorded in the second quarter of 2004, originations for Freddie Mac dropped 47%, originations for the Federal Housing Administration dropped 34%, and originations for pension funds dropped 75%, the MBA said. "Capital continues to flow into the commercial and multifamily real estate markets on both the debt and equity sides," said MBA chief economist Doug Duncan. "And so far, no significant obstacles to that flow have appeared, whether in the form of higher interest rates, declining loan performance, or declining property performance." Commercial mortgage-backed securities conduits bought 43% of the loans originated in the second quarter, followed by commercial banks, at 23%, the MBA said. The increase in lending activity was across all property types, with lending on hotel properties seeing a 189% increase from that of the second quarter of 2004. The MBA can be found online at http://www.mortgagebankers.org.

Agora Holdings Inc., formerly of Glastonbury, Conn., has announced its relocation to New York City and the naming of Kevin Kading as president.The real estate funding and holding company said it has secured financing commitments for $120 million that will be used for the funding or acquisition of real estate projects in connection with the acquisition or funding of "early-stage, high-potential" companies and technologies. The terms of the funding were not disclosed.

Taipan Group LLC, a Baltimore-based publisher of financial newsletters, is touting as "revolutionary" a new program that Taipan says enables homeowners to lock in the value of their homes during housing market declines.The House Hedge Program, developed by Taipan analyst Bryan Bottarelli, allows homeowners to own a piece of the top 21 real estate companies trading on major U.S. stock markets, ranging from residential homebuilders and commercial developers to mortgage companies and mortgage insurance companies. As the housing market declines, the companies' stock prices will fall, profiting those invested in the hedge program, Taipan explained. "But there's an additional benefit to the House Hedge Program: homeowners collect payouts," Mr. Bottarelli said. "How much depends on individual circumstances." The company can be found online at http://www.taipanonline.com.

Interest-only loans accounted for 26% of all mortgages funded in the second quarter, according to exclusive survey figures compiled by National Mortgage News.Lenders originated $213 billion in IO mortgages during the second quarter, compared with $141 billion in the first. In the first quarter, IOs accounted for 21% of all loans funded. In the fourth quarter, IO production accounted for 15% of all loans ($101 billion), survey figures show. (NMN is the only publication that has a history of tracking IO production.) IO loans and payment-option ARMs lower monthly payments for consumers, because no principal is being paid down, but are considered somewhat controversial because consumers cannot build equity in their homes unless the property rises in value. Some lenders say the loan is being used by speculators who are betting on rapid price increases in hot housing markets.

Ashford Hospitality Trust, a real estate investment trust based in Dallas, has announced an increase in its secured revolving credit facility to $100 million.The interest rate on the facility was reduced to a range of 160 to 195 basis points over the London interbank offered rate, Ashford said. The three-year facility has two one-year extension options and can be increased to $150 million under certain conditions. Calyon New York Branch was the sole lead arranger. The REIT can be found online at http://www.ahtreit.com.

First Industrial Realty Trust Inc., a Chicago-based real estate investment trust, has announced the renewal of its senior unsecured revolving credit facility.The new three-year credit facility provides a borrowing capacity of up to $500 million that can be increased to $600 million under certain conditions. It replaces previous line-of-credit agreements and reduces the interest rate to 62.5 basis points above the London interbank offered rate, the REIT said. J.P. Morgan Chase Bank NA acted as administrative agent for the renewal, and Wachovia Bank NA was the syndication agent.

Class G of Mortgage Capital Funding Inc. multifamily/commercial mortgage pass-through certificates, series 1996-MC2, has been downgraded from Ca to C by Moody's Investors Service.In addition, Moody's upgraded one class and affirmed the ratings of five other classes in the transaction. The downgrade was attributed to realized losses from specially serviced loans. "Class G has experienced aggregate losses of approximately $1.5 million and is currently the first-loss class," the rating agency said. The certificates are collateralized by 40 mortgage loans secured by commercial and multifamily properties. Moody's can be found online at http://www.moodys.com.

CBA Commercial LLC, a Stamford, Conn.-based firm that specializes in buying and securitizing small-balance commercial mortgage loans, has announced the issuance of a $214.9 million securitization of such loans.CBA Commercial Assets small-balance commercial mortgage pass-through certificates, series 2005-1, includes 572 small-balance commercial, mixed-use, and multifamily mortgage loans with an average principal balance at origination of approximately $377,000, the company said. William Komperda, chairman and CEO of CBAC, said the company's strategy is to become the leader in small-balance commercial mortgages.

Colonial Properties Trust, a Birmingham, Ala.-based diversified real estate investment trust, and DRA Advisors, a New York-based investment adviser, are acquiring CRT Properties, an office REIT, for $1.8 billion.Colonial Properties is investing about $50 million for a 15% interest in the portfolio and will also manage most of the properties in the portfolio, the REIT said. In addition to the equity put in by the partners, the acquisition costs include the assumption of about $369 million of mortgage debt and the addition of about $1.1 billion in additional secured debt on the properties, Colonial said. The venture plans to begin selling 10 properties totaling $363 million in the fourth quarter. "This investment enhances our management and market penetration in high-growth Sunbelt cities where we currently operate," said Thomas H. Lowder, Colonial's chairman and chief executive officer. The acquisition will add 11.7 million square feet of office space to Colonial Properties' portfolio, taking it to 20 million square feet, the REIT said.

Meanwhile, Doral Financial has announced the receipt of a grand jury subpoena from the U.S. Attorney's Office for the Southern District of New York regarding the production of certain financial statements and other documents.The subpoenaed documents, including corporate, auditing, and accounting records, cover the period from Jan. 1, 2000, to the present. The company said it will "fully cooperate and assist the U.S. Attorney's Office in this matter."