Originations

Origen Financial Inc., Southfield, Mich., has reported a net loss of $5.8 million ($0.23 per share) for the fourth quarter, compared with net income of $2.0 million ($0.13 per share) a year earlier.The real estate investment trust also reported a net loss of $1.8 million ($0.08 per share) for the year, far less than the $22.0 million loss recorded in 2003 by Origen and its predecessor, Dynex Financial. "We believe that our fourth-quarter loss is not indicative of ongoing results of operations, as we made significant charges to income relating to loans originated by our predecessor before our current origination platform was implemented in 2002," said Origen chief executive officer Ronald A. Klein. Origen, a manufactured home loan originator and servicer, can be found online at http://www.origenfinancial.com.

Continued strength in California housing markets has held foreclosures down in the first quarter, but the surge in bond yields will lead to rising interest rates and growing defaults and foreclosures in the state, according to Foreclosures.com, a Fair Oaks, Calif.-based investment advisory firm.Alexis McGee, president of Foreclosures.com, said rising home values and low interest rates have insulated many homeowners in financial distress from losing their homes, but that rising bond yields will make them vulnerable. "Fixed rates will start to creep up soon, and concerns about inflation will lead the [Federal Reserve Board] to raise short-term rates again, impacting all adjustable-rate loans," she said, thus curbing the refinancing option and boosting payments on adjustable-rate mortgages. "This will put a lot of people that used adjustable rates to qualify for expensive California homes in a bind," she said. ".... We will definitely see a rise in defaults this year." The company can be found on the Web at http://www.foreclosures.com.

LoanPros.com, Huntington Beach, Calif., is offering a $1 million prize to the first person who can bring in a certified extraterrestrial being to apply for a home loan.The company said the idea was inspired by an ABC News documentary, "The UFO Phenomenon -- Seeing Is Believing," broadcast on Feb. 25. "We believe the existence of extraterrestrials is real and we want to do whatever we can to promote government disclosure -- but it's also a good promotional idea," said Wayne R. Goldman, president of LoanPros.com. "The prize is real and we will stand behind it." Among the criteria that would have to be satisfied is that the extraterrestrial must be able to sign its name on the loan documents, Mr. Goldman said. The company can be found online at http://www.loanpros.com.

Federal Reserve Board officials have started a public relations campaign to prevent lenders from being unfairly tarnished by the release of the new HMDA pricing data on subprime loans.The new Home Mortgage Disclosure Act data could show discriminatory lending patterns that, on closer examination of the loan files, don't exist, Fed staffer Glenn Canner told a Georgetown University conference. "We will be speaking as frequently as we can over the next few months trying to inform community groups and the press about the strengths and weaknesses of the data," he said. Starting March 31, individual lenders will make their HMDA disclosure reports available to the public upon request. At the same time, the Fed will issue a news release that explains the limitations of the pricing data. Despite the Fed's effort, Mr. Canner predicted that the news media "will have a field day with some lenders."

The Community Revitalization Fund Inc., a Hoffman Estates, Ill.-based subsidiary of Sears, Roebuck and Co., has announced a $1.5 million investment in a new program launched by the National Council of La Raza to assist Latino homeowners.Called "From House to Home: Strengthening Families and Maintaining Homes," the program was designed to help close the gap in housing financial services and education while targeting three areas: improving the financial stability of a Latino family in the long term; conducting research studies to identify the needs of Latino homeowners; and designing financial strategies that will help Latino families maintain their homes. According to the Harvard Joint Center for Housing Studies, Latinos will account for up to 40% of all new homeowners over the next 20 years. But they need "guidance in the homebuying process," said La Raza president and chief executive officer Janet Murguia, as well as "knowledge about how to maintain your home and potentially leverage it for building other assets and greater wealth."

Richard W. Payne III has been named president of the wholesale division of New York Mortgage Trust, and Joseph J. Gorton has been named the division's chief operating officer.The real estate investment trust said the hiring of the two mortgage banking veterans will enable it to "significantly accelerate" the growth of its wholesale origination business. Mr. Payne was president and chief executive officer of SIB Mortgage Corp. from 1997 to 2004 until that company was acquired by Lehman Brothers. Mr. Gorton was formerly executive vice president and COO of SIB Mortgage, and he was previously an executive with GMAC Mortgage, Eastern Mortgage Services, and Anchor Mortgage Services, the REIT said.

American Business Financial Services, a troubled Philadelphia-based subprime lender, has announced final Bankruptcy Court approval of a $500 million debtor-in-possession financing facility that will enable ABFS to resume its loan origination business.The facility includes $175 million in interim financing provided by Greenwich Capital Financial Products and CIT Business Credit. ABFS also announced the appointment of David Coles of Alvarez & Marsal LLC, a turnaround and restructuring firm, as chief restructuring officer. In a January filing with the Securities and Exchange Commission, the mortgage banker said it had "significantly curtailed" loan originations as a result of liquidity problems. ABFS is both a retail and wholesaler lender.

Irwin Financial Corp., Columbus, Ind., has announced that its subsidiary Irwin Mortgage Corp. will divest its net branch and credit union lending operations and a portion of its traditional retail lending operations in sales to two companies.The terms of the two agreements were not disclosed. IMC agreed to sell 40 of its retail and retail/net branches, mainly in coastal states, as well as its credit union lending business. American Home Mortgage Corp., Melville, N.Y., will acquire the CU channel, 23 of the retail and retail/net branches, and the Concord, Calif., loan operations center, Irwin reported. Meanwhile, Pinnacle Financial Corp. will buy the balance of the branches and the Carson, Calif., loan operations center. Irwin said its mortgage subsidiary will now concentrate on the growth of its most profitable channels in wholesale, correspondent, and consumer direct lending and "sharpen" its focus in traditional retail lending to low- and moderate-income and emerging market homebuyers. It will retain 21 traditional retail branches concentrated in the Midwest and the East. Irwin can be found online at http://www.irwinfinancial.com.

Ameriquest Mortgage, Orange, Calif., the nation's largest subprime funder, says it is negotiating with 25 states regarding concerns over some of its retail lending practices.In a mid-February bond filing, the company mentioned that the talks are between the lender and "regulatory agencies and/or attorney generals" in 25 states. The company says the states are concerned about these issues: the "appropriateness" of discount points charged prior to February 2003; the accuracy of appraisal valuations; stated-income loans; "oral" statements made to borrowers regarding loan terms; and its policies on funding Native American reservation properties. American Banker, an affiliate of National Mortgage News, published a story about the talks in its March 14 issue. A spokesman for the privately held lender said it cannot comment on specific regulatory matters but stressed that the company is "working to resolve the issues under discussion." He said Ameriquest is "committed to providing customers with the credit they deserve to achieve their financial goals." A source close to the company said Ameriquest first disclosed in January that it was having talks with various states. He added that the company continues to successfully tap the securitization market.

Four classes of Morgan Stanley Capital I Inc. commercial mortgage pass-through certificates, series 2003-TOP11, have been downgraded by Moody's Investors Service.The downgrades were as follows: class J, from Ba3 to B1; class K, from B1 to B2; class L, from B2 to B3; and class M, from B3 to Caa1. Moody's also confirmed or affirmed the ratings on 13 other classes in the deal. The rating agency said the downgrades were due to the performance of two specially serviced loans. The Alabama/Arizona Warehouse/Distribution Loan was transferred to special servicing in January 2004 due to the bankruptcy filing of KB Toys, the only tenant of the two warehouse distribution facilities -- in Montgomery, Ala., and Glendale, Ariz. -- securing the loan, Moody's said. It is not known whether KB will accept any of the distribution center leases. The Troy Technology Park Portfolio Loans, secured by 11 flex/industrial buildings in Troy, Mich., were transferred to special servicing in November 2004 due to imminent default, Moody's said. At securitization the complex was 98.0% leased, but is now only 44.0% leased. "Although the loan has been delinquent since the December payment, the borrower is cooperating with the special servicer on the resolution of the loan," Moody's said.

Ramco-Gershenson Properties Trust, Farmington Hills, Mich., has announced that it will restate its audited financial statements for 2002 and 2003 and its unaudited quarterly results for the first, second, and third quarters of 2004.The restatements will correct accounting for employee bonuses so that the bonuses accrue during the period in which they are earned, and write off capitalized costs, including leasing costs, associated with former tenants in the period in which the lease termination occurred, the real estate investment trust said. "Although the amounts associated with the bonus accruals and capitalized costs should not be material to our annual financial statements, we feel it prudent to correct our accounting policies, which should prevent any issues with future filings," said Dennis Gershenson, president and chief executive officer of Ramco-Gershenson. The shopping center REIT can be found on the Web at http://www.rgpt.com.

What was Nancy Bowen Wiggins, a single mother and commercial real estate broker from Charlotte, N.C., doing at MIPIM, the International Property Market, which ended its five-day run March 11? Making money selling property in Slovenia, of all places.Turns out Ms. Wiggins has been working in the country from her Carolina home since 2000, and helped form AND DOO in October to sell property to American and other foreign investors. "There's a lot of opportunity here to build housing, offices, and retail," she said of Slovenia, which joined the European Union last May. Indeed, the North Carolina broker says she may even move there. According to Ms. Wiggins, the average per capita income in Slovenia is US$17,000, which is "four times the average in Poland and equal to that of a nice middle-class family in America." And the place is a lot like her native Tar Heel state, she added. "What they have in the way of mountains, we have in the way of a seashore," Ms. Wiggins said, "and what they have in a seashore, we have in the way of mountains."

Carlton Advisory Services and W.P. Carey & Co., both of New York, are taking decidedly different approaches when it comes to foreign investors.Carlton, a national real estate and loan sale investment bank, attended MIPIM, the International Property Market, in Cannes, France, the week of March 7 looking for equity funding to support several U.S. transactions. Carey, on the other hand, was there looking for properties to buy and then lease back to their sellers. Carlton, which has completed more than $21 billion in deals over the years, wants money to support residential apartment conversions in Manhattan, the development of a new hotel/condominium on Manhattan's West Side, new condos all over the Big Apple, and the purchase of the Met Life Building, which is exactly the type of trophy property foreigners tend to like. Carey, one of the leading providers of net-lease funding in the world, was hoping to capitalize on what its executives said is "increased interest" among companies that realize "the importance of capital efficiency and the true value of their real estate assets." With sale-leasebacks, companies "in effect outsource their real estate to us in return for capital, freeing them to do what they do best, which is running their businesses," said Edward LaPuma, Carey's chief acquisition officer.

AmeriVest Properties Inc., a Denver-based real estate investment trust, has announced a suspension of the payment of its common dividend for the first quarter.The REIT said the move was made to maximize its ability to complete a "strategic transaction" in a timely manner. The company noted that its board of directors retained Bear Stearns in November to evaluation strategic options, including a possible sale or recapitalization of all or a portion of its properties. The REIT specializes in acquiring and operating multitenant office buildings for small and medium-size businesses in Denver, Phoenix, Dallas, and Indianapolis. It can be found online at http://www.amvproperties.com.

The U.S. CMBS Loan Delinquency Index declined 4 basis points in February to 1.23%, marking the first time in several years that delinquencies in all four major property types fell simultaneously, Fitch Ratings has reported.The rating agency said declines are often the result of resolutions through asset sales of real estate owned properties that result in losses. In the office and multifamily sectors, the amount of new defaults was slightly below the amount of resolved delinquents, Fitch reported, whereas in the industrial and retail sectors the declines resulted largely from the resolution of larger loans. The 16% decline in the dollar balance of industrial loans was largely due to the resolution of two industrial properties in North Carolina, both of which involved selling properties at significant losses. A similar pattern emerged in the retail sector, where Fitch attributed a 7% decline to the sale of several large loans that were REO properties. Hotel delinquencies, which have improved steadily over the past year, rose 3.6%.

Housing sales and construction remained robust in most of the Federal Reserve Bank districts at the end of February, according to the Fed's Beige Book.The Fed's periodic survey of economic conditions found that home sales remained strong across most of the nation. "Home construction has been particularly brisk in the San Francisco and Atlanta districts, whereas Minneapolis, Kansas City and Dallas indicated some pullback," the survey found. Meanwhile, commercial real estate markets were mixed, but there was rising demand for CRE loans in New York; Cleveland; Richmond, Va.; and Kansas City, Mo. "Dallas, however, noted an increase in commercial property foreclosures," the Beige Book says.

The average 30-year fixed mortgage rate rose to 5.85% for the seven-day period ending March 10 from 5.79% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate increased from 5.33% to 5.38%, the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages climbed from 5.17% to 5.22%, and the average rate for one-year Treasury-indexed ARMs rose from 4.14% to 4.24%. Fees and points averaged 0.6 of a point for fixed-rate mortgages and five-year hybrid ARMs and 0.7 of a point for one-year ARMs. "Last Friday's employment report reinforced the perception that the economy is on sure footing, leading bond markets to push interest rates higher again this week," said Amy Crews Cutts, Freddie Mac's deputy chief economist. "Although inflation remains tame, the recent spike in oil prices does put inflationary pressures on the economy and was an additional factor causing higher interest rates." A year ago, the average 30-year and 15-year fixed rates were 5.41% and 4.69%, respectively, and the average one-year ARM rate was 3.41%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

A bill has been introduced to extend the Terrorism Risk Insurance Act of 2002, which is due to expire by the end of the year, until 2007.The main sponsors of the Terrorism Insurance Backstop Extension Act of 2005 are Reps. Michael E. Capuano, D-Mass., Steve Israel, D-N.Y., Barney Frank, D-Mass., Paul Kanjorski, D-Pa., and Joseph Crowley, D-N.Y., according to the Mortgage Bankers Association. "There is a growing Hill recognition for the vital role TRIA plays in maintaining the stability of the commercial real estate finance industry," said Kurt Pfotenhauer, the MBA's senior vice president of government affairs. The trade association said it is "hopeful that the House Financial Services Committee can forge a bipartisan solution and act now to extend the program." In the absence of such a backstop, there may be fewer commercial real estate finance transactions, the MBA says. And servicers might have to "force-place" terrorism insurance, an action that could lead to litigation.

The Market Composite Index, an overall measure of mortgage applications, fell from 710.1 to 704.8 on a seasonally adjusted basis during the week ended March 4, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications rose 11.3% on the week but were down 19.7% from the level of a year earlier. The Purchase Index rose from 440.0 to 451.7 on a seasonally adjusted basis, while the Refinance Index fell from 2281.1 to 2176.8. Refinancings represented 42.6% of total applications, down from 44.8% the previous week, while adjustable-rate mortgages accounted for 30.5%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages fell from 5.74% to 5.69%, and points (including the origination fee) increased from 1.19 to 1.23 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mortgagebankers.org.

A community activist group has released a study maintaining that Wells Fargo conducts most of its subprime mortgage lending in minority and low-income neighborhoods.The Association of Community Organizations for Reform Now is also calling on the Federal Reserve Board to remove Wells Fargo chief executive Richard Kovacevich from its advisory board. "The Federal Reserve shouldn't take advice from predatory lenders," said ACORN president Maude Hurd. "Our study shows that Wells Fargo targets minority communities and others for abusive loans." The ACORN study, which relies on 2003 Home Mortgage Disclosure Act data, compares the lending activities of Wells Fargo's consumer finance unit, which makes mostly subprime mortgage loans, with those of its prime lending unit, Wells Fargo Home Mortgage. One of every four refinancings by Wells Fargo Financial is in low- and moderate-income communities, compared with one out of every 10 refis by WFHM. Meanwhile, one out of five Wells Fargo Financial loans are made in predominantly minority neighborhoods, compared with one out of 20 by WFHM. A Wells Fargo spokeswoman said the allegations are "totally false" and that ACORN's study is "flawed" and "should be dismissed." ACORN has been waging a campaign against Wells Fargo for the past two years to reform the company's lending practices.