Originations

NorthStar Loans USA, Riverside, Mo., has become an exclusive mortgage lending partner for the membership of the Uniformed Services Benefit Association, according to USBA Services Inc., Overland Park, Kan., a subsidiary of USBA.The marketing partnership will give USBA members access to "an online consumer-direct lender dedicated to simplifying the mortgage lending process," said Rear Admiral Larry G. Vogt, US Navy (Ret.), USBA's president and chief executive officer. The company's website now offers visitors a gateway to the NorthStar Loans site. NorthStar Loans is an Internet mortgage lending division of NorthStar Bank NA. USBA can be found on the Web at http://www.usba.com.

The National Association of Realtors has launched a consumer education campaign that it says will help consumers avoid the pitfalls of predatory lending practices.The NAR said the policy approved May 14 by its board of directors is aimed at developing standards that recognize the valid uses of subprime loans while combating abusive lending practices. "Realtors are the first stop for consumers in the real estate transaction, and we're taking a strong stance against the practice by some unconscionable lenders to trap consumers into toxic loans that benefit the lender and not the consumer," said NAR president Al Mansell, chief executive officer of Coldwell Banker Residential Brokerage, Salt Lake City. "Homebuyers should get themselves prequalified for fair and affordable financing, and Realtors can educate them on the consequences of some subprime loans that work against the homebuyers' best interests." The NAR can be found online at http://www.realtor.org.

CB Richard Ellis, Los Angeles, has created a capital markets group that integrates its investment sales and mortgage banking businesses into a single global division.For 2004, the sales side had business activity of $87.2 billion and L.J. Melody had $13.3 billion in loan originations, according to CBRE. Brian Stoffers will retain his position as executive managing director of L.J. Melody while also serving as president of CBRE Capital Markets, the company said. "Collaboration between these groups has been under way for a number of years," said Brett White, CBRE's president and chief executive officer. "The creation of CBRE Capital Markets formalizes this unification and streamlines our global capital markets offering. Increasingly, major investment clients are looking for capital markets solutions rather than separate sales and financing transactions. Our capital markets group will enable us to meet their capital requirements efficiently anywhere around the globe." The company can be found online at http://www.cbre.com.

Fidelity National Financial Inc., Jacksonville, Fla., has announced a restructuring plan to distribute 17.5% of its title insurance operations to existing stockholders.Under the plan, FNF would form a title insurance holding company that would act as the parent company for FNF's title insurance operations. FNF said it would then make a taxable distribution of 17.5% of the shares of the holding company's common stock to FNF stockholders, while retaining ownership of the remaining common stock. "We believe that it has been difficult to appreciate the full value of our distinct business lines in a single publicly traded security," said William P. Foley II, FNF's chairman and chief executive officer. "Separating the businesses that comprise FNF into distinct companies will provide improved transparency for the investment community and a potentially simpler means of valuing the assets of FNF." The company can be found online at http://www.fnf.com.

Single-family housing starts rebounded by 6.3% in April after a 14% plunge in March that stirred concerns about the strength of the housing market.The U.S. Census Bureau reported that single-family starts increased from a seasonally adjusted annual rate of 1.54 million in March to 1.64 million in April. Starts are ahead of last year's record pace by 0.7%. National Association of Home Builders economists say they expect a rebound. And a new NAHB survey shows that homebuilders remain confident that home sales will remain strong for the next six months. "Builders continue to see strong buyer demand for single-family homes," said NAHB chief economist David Seiders. "With unsold inventories in good shape, housing starts should be solid in the coming months." The Census Bureau also reported that multifamily starts rebounded by 34% in April to 351,000 units.

Four classes of Diversified Asset Securitization Holdings III LP have been downgraded by Fitch Ratings.The downgrades were as follows: classes A-1L and A-2, from AA-plus to AA; class A-3L, from A-minus to BBB-minus; and class B-1L, from BB-plus to B-minus. Fitch said DASH III is a collateralized debt obligation that was originated and managed by Asset Allocation & Management LLC, but that TCW Asset Management Co. became the substitute asset manager for AAMCO in October 2002. The portfolio backing the CDO consists of residential and commercial mortgage-backed securities, asset-backed securities, real estate investment trusts, and other CDOs. Fitch attributed the downgrades to collateral deterioration and an "underhedged position that increases in severity in various prepayment scenarios." Mezzanine and subordinate tranches from underperforming manufactured housing securitizations have taken principal writedowns, the rating agency said. Fitch can be found online at http://www.fitchratings.com.

Jay Flaherty, president and chief executive officer of Health Care Property Investors Inc., has been named chairman of the board of directors of the Long Beach, Calif.-based real estate investment trust.Mr. Flaherty succeeds Ken Roath, who will remain a director of the company. The REIT can be found on the Web at http://www.hcpi.com.

Midlantic Office Trust, Rockville, Md., has filed a registration statement with the Securities and Exchange Commission for an initial public offering of $225 million in common stock.The company, which has opted for real estate investment trust status, reports that it will invest in office properties in the mid-Atlantic region consisting of Washington D.C., Virginia, Maryland, Pennsylvania, New Jersey, and Delaware. The properties the REIT is targeting typically have up to 400,000 rentable square feet and are located in suburban markets, Midlantic said. Midlantic's SEC registration statement is not yet effective.

Equus Resources Inc., Atlanta, has announced the formation of a commercial lending division that will offer asset-based financing for the acquisition and development of commercial real estate projects.The financing will be targeted at projects with lending requirements ranging from $500,000 to $5 million. Acceptable properties will include apartments and other multifamily housing projects, shopping centers, office buildings, warehouse and light industrial projects, resort/vacation properties, restaurants, and hotels and other hospitality properties, Equus said. Lee Pagnotta has been named to head the new division. Equus can be found on the Web at http://www.equusresources.com.

Prudential Huntoon Paige, the FHA-insured commercial mortgage loan business of Prudential Mortgage Capital, Newark, N.J., has expanded operations by opening a Rocky Mountain regional office in Englewood, Colo., and a Midwest regional office in Chicago.Prudential Huntoon Paige is looking for about $425 million in FHA business this year, Prudential said. To further this goal, the group has hired Carolyn McMullen to head its Midwest office. She previously was a mortgage banker with GMAC Commercial Mortgage, Prudential reports. And Martin Herz, who joined Prudential in 1998, has been named a principal responsible for FHA production at the group’s Rocky Mountain office.

Old Republic International Corp., Chicago, has promoted Chris Nard to president and chief executive of its mortgage guaranty group of companies and to senior vice president-mortgage guaranty of the parent company.He succeeds Bill Simpson, who will remain as chairman of the mortgage guaranty subsidiaries, the largest being Republic Mortgage Insurance Co. Mr. Nard, Mr. Simpson and vice chairman Jimmy Dew make up a three-person mortgage guaranty office of the chief executive officer. ORI also is creating its own office of the chief executive officer. Mr. Nard has been named as a member of this group, as has Rande Yeager, senior vice president-title insurance (who also serves as president and chief executive of the title insurance group).

The four major sectors of the commercial real estate market are likely to see improvement over the next two years, according to a forecast presented at a commercial real estate forum at the National Association of Realtors Midyear Legislative Meetings & Trade Expo. NAR chief economist David Lereah said that although there are some uncertainties that could potentially affect the major commercial sectors -- office, retail, industrial and multifamily -- on balance the fundamentals are improving. "We've seen a strengthening in the job market, capital has been flowing back into commercial real estate at record levels, the modest rise in interest rates in not [affecting] long-term investment, and there's been a healthy restocking of business inventories," he said.

Meanwhile, house prices posted double-digit gains in a record number of metropolitan statistical areas in the first quarter, the National Association of Realtors said.The NAR's first-quarter metro area home price report shows that 66 of the 136 MSAs had double-digit annual increases in median existing-home prices. The previous record was 62 MSAs in the preceding quarter. The NAR also reported that the national median single-family resale price rose to $188,800 in the first quarter, up 9.7% from a year earlier. NAR chief economist David Lereah pointed to the tight supply of homes. "We simply don't have enough homes on the market to meet demand," Mr. Lereah said. ".... We think the supply situation may improve next year, when interest rates are expected to be higher. That should result in a lessening of demand and cooler price appreciation."

Total existing-home sales -- including condominiums and co-operatives -- set the third-highest pace on record in the first quarter, rising in 44 states and the District of Columbia from the levels recorded a year earlier, according to the National Association of Realtors.The seasonally adjusted annual resales rate was 6.84 million units in the first quarter, up 8.3% from 6.32 million in the first quarter of 2004. (The record high of 6.90 million units was set in the second quarter of 2004, followed by 6.88 million in the fourth quarter of last year, the NAR reported.) The biggest year-over-year gains were recorded in Alaska, where the resale rate was up 21.4%; Wyoming, up 17.5%; and Oregon, up 17.3%. The NAR can be found online at http://realtor.org.

Weather has significantly affected homebuilders across the country, according to a new research report from Merrill Lynch.The company attended the Waste Expo held recently in Las Vegas, where analysts spoke with waste companies about their April construction volumes. According to the report, a weather-related slowdown in residential construction in the first quarter has caused pent-up demand in the early part of the second quarter. "A number of haulers are going as far as sending underutilized dumpsters from other regions to the strong residential markets like Phoenix and Southern California," the report said. In the Northwest, Merrill Lynch said the dry weather has resulted in strong construction activity, but in California, the severe rain has put a hold on many new developments. It is also becoming more difficult to sell a home in Las Vegas, the company said. David Rosenberg, Merrill Lynch's chief economist, is forecasting a 1% decline in housing starts in 2005, which will challenge the industry, the report said.

New homebuyers are "overwhelmingly" choosing higher-quality features over more space, according to a survey by the National Association of Home Builders.When asked to choose between a bigger house with fewer amenities and a smaller one with more amenities, 63% of the surveyed homeowners opted for the latter, the NAHB reported. "One particular consumer trend stands out: while homes do not appear to be getting bigger, they are definitely getting better," said Jerry Howard, chief executive officer of the association. "There is a marked increase in quality, with updated features and amenities." The top features homeowners said they want in the kitchen are a walk-in pantry (desired by 84%), an island work area (77%), special use storage (62%), and a built-in microwave oven (62%), the NAHB said. The top bathroom features were a linen closet (desired by 91%), an exhaust fan (88%), and a separate shower enclosure (78%). The association can be found online at http://www.nahb.org.

The U.S. Treasury Department has awarded $2 billion under its third round of New Markets Tax Credits to 41 entities, including states, cities, and private organizations that are making qualified equity investments in designated community development entities.The NMTC program grants federal income tax credits to qualified equity investments in designated CDEs, just as low-income housing tax credits are granted in conjunction with low-income community development investments. Investors receive credits at up to 39% of the cost of their investment, claimed over a seven-year credit allowance period. During the first three years, investors receive credit at 5% of the total amount paid for the stock, or capital interest at the time of purchase. For the remaining four years, they receive a 6% credit annually and are not allowed to redeem their investments in CDEs before the end of the seven-year period.

The average 30-year fixed mortgage rate rose to 5.77% for the seven-day period ending May 12 from 5.75% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate increased from 5.31% to 5.33%, the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages climbed from 5.16% to 5.21%, while the average rate for one-year Treasury-indexed ARMs crept up from 4.22% to 4.23%. Fees and points averaged 0.5 of a point for 30-year fixed-rate mortgages and 0.6 of a point for the other three mortgage categories. "According to the Mortgage Bankers Association, purchase applications hit a record high last week, and this can be directly attributed to continuing low mortgage rates," said Frank Nothaft, Freddie Mac's chief economist. "The bond market isn’t exactly sure how fast or slow the economy will expand in the long term, and thus bond yields have remained remarkably low." A year ago, the average 30-year and 15-year fixed rates were 6.34% and 5.72%, respectively, and the average one-year ARM rate was 3.90%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

The Federal Housing Administration is planning a "major" advertising campaign in "selected markets" where the agency believes mortgage brokers may be guiding homebuyers to more expensive nonprime loans.The campaign is said to be an effort to secure a better deal for borrowers, but it also could help shore up the sagging government-insured mortgage program. Once the first choice of borrowers who don't measure up to conventional loan standards, the FHA is now often the last option suggested by lenders. In the second half of 2004, government mortgages (including those guaranteed by the Department of Veterans Affairs) accounted for just 5% of all originations, according to the latest figures from the Mortgage Bankers Association. The FHA hopes to win over borrowers by stressing that "our rates are much lower than subprime and only slightly higher than conventional," Vance Morris, director of single-family program development, said at the National Association of Realtors' annual Midyear Legislative Meetings in Washington. Mr. Morris said ads will also emphasize that consumers can be assured of getting "an honest appraisal" with a government-insured loan, and that if they get into trouble, "we will work with you to keep you in your home."

Innkeepers USA Trust, a real estate investment trust based in Palm Beach, Fla., has postponed the release of its first-quarter financial results, citing the discovery of a potential loss from the misappropriation of funds at one of its hotels.The hotel REIT said it expects to record a charge of approximately $430,000 against its first-quarter earnings as a result of the possible misappropriation of accounts receivable by a hotel general manager. "An investigation is continuing with respect to this matter; however, the company believes that it has quantified the probable maximum potential loss and believes that the potential misappropriation is limited to one hotel," Innkeepers USA said. The REIT can be found on the Web at http://www.innkeepersusa.com.