Originations

Loancity.com, a wholesale mortgage lender based in San Jose, Calif., has announced the adoption of a new corporate identity as LoanCity to better portray the company's focus as a lender rather than a technology-based dot-com.The new identity includes a new logo and a redesigned website, the company said. "LoanCity has been one of the best-kept secrets in the business," said Kathy Marshall, LoanCity's senior vice president of marketing. "Not many people realize that we are currently among the top 25 wholesale lenders in the country." The company's redesigned website can be found online at http://www.loancity.com.

House prices posted double-digit gains in almost half of the 129 metropolitan statistical areas in 2004, according to the National Association of Realtors.The NAR's fourth-quarter metro area home price report shows that 62 MSAs had double-digit annual increases in median existing-home prices -- setting a new record. The previous record was 49 MSAs in the second quarter of 2004. The NAR also reported that resale price appreciation accelerated in the fourth quarter to an annual rate of 8.8%, compared with 7.5% in the third quarter. NAR chief economist David Lereah said analysts looking for signs of weakness in the housing market will be disappointed. Only four MSAs reported declines in housing prices, and those metro areas had not experienced rapid price growth. "In fact, they were all lower-cost areas experiencing one or both of the conditions necessary for temporary price softness -- local economic weakness, mainly in jobs, or a large supply of homes available in the local market," Mr. Lereah said. The NAR can be found on the Internet at http://realtor.org.

ABN Amro Mortgage Group, Ann Arbor, Mich., has announced that Ford Motor Co. now offers a private-label version of AAMG's Mortgage.com to its employees.Under the arrangement with AAMG's National Lending Center Affinity and Relocation Lending division, Ford employees can access various mortgage lending products and services at a discount through Ford's Intranet, including AAMG's guaranteed OneFeemortgage. OneFee guarantees, at the time the loan's interest rate is locked, all the typical lender-related fees associated with obtaining a mortgage loan, AAMG said.

Accredited Home Lenders Holding Co., a nonprime nationwide mortgage lender, has reported net income of $130.8 million for 2004, an increase of 30.8% over $100 million in 2003.Total revenue for the year increased 51.8%, to $660.7 million from $435.2 million the prior year. Net income for the fourth quarter totaled $38.1 million ($1.76 per share), an increase of 27.1% from $30 million for the same period in 2003. Chairman and chief executive officer James Konrath said the company experienced "outstanding portfolio results as measured by 30-plus-day delinquency and annualized loss results." Mortgage origination volume totaled $12.4 billion in 2004, compared with $8 billion in 2003, an increase of 56.1%. Origination volume for the fourth quarter equaled $3.5 billion, surpassing the company's previous record of $3.4 billion in the second quarter of 2004, the company said. Portfolio income totaled $166 million in 2004, compared with $82.3 million in 2003, an increase of 101.7%.

Municipal Mortgage & Equity, Baltimore, has closed a tax credit equity fund, raising $319 million from 16 corporate investors, the multifamily financing company reports.The proceeds from the fund, which the company said is its largest tax credit equity fund so far, will be used to finance 61 affordable multifamily properties nationwide. Michael L. Falcone, president and CEO, MuniMae, said that "the closing of this fund signals a continuing strong demand for our tax credit equity funds, and we are looking forward to another great year in 2005."

An amendment of the Indiana Home Loan Protections Act is now in effect that clarifies that rescission rights granted for a violation of the law, in Indiana's high-cost home loan statutes, refers only to a violation of the Truth In Lending Act.Gov. Mitch Daniels signed the amendment, following its passage by both the Indiana House and the Senate. The state legislature said it had made a mistake and had not meant to be ambiguous in its initial wording of the act, according to Nanci Weissgold, a partner with the Washington law firm of Kirkpatrick & Lockhart Nicholson Graham LLP. Previous language inadvertently was interpreted to permit rescission rights for violations of any law, including the state predatory lending law. "The act said 'a violation of the 'law'" which was not defined … It was unclear," Ms. Weissgold said. "Because of the confusion, Standard & Poor's has required credit enhancement for home loans. Penalties are indeterminable because S&P didn't know what the violations were." Credit enhancement for home loans is an important issue, said Ms. Weissgold, adding that it costs more to make plain "vanilla loans" when rescission is used as a defense for foreclosure.

Senate Banking Committee chairman Richard Shelby, R-Ala., is looking into complaints from small lenders that Fannie Mae and Freddie Mac charge them high loan guarantee-fees, while offering discounts to large lenders.At a committee hearing, Sen. Shelby said this business practice places small lenders at a disadvantage and it could be contributing to greater concentration in the industry. "A lot of people are concerned that these business practices may be pushing the mortgage and lending industry toward even more concentration," the chairman said. When asked by reporters if he believes g-fees should be the same for all lenders, Sen. Shelby said, "We will probably explore that some more." Lenders pay g-fees to Fannie and Freddie to securitize loans. The cost is passed on to borrowers.

Freddie Mac is preparing to announce a new suite of affordable loan products that will help workers earning 100% of median income to get 100% financing with only a $500 borrower contribution required.The new "Home Possible" loan products combine the "best features" of all affordable loan programs, a Freddie executive said. In addition, the HP loans are designed to boost the buying power of policemen, fire fighters, educators and health care workers by 24% so that they can afford to purchase homes in the communities where they work. Starting March 1, Freddie seller/servicers will be able to offer the new Home Possible products and process the loans through Loan Prospector -- the mortgage company's automated underwriting system. "It will be mainstreamed and it will be available everywhere," Freddie vice president David Stevens told MortgageWire. Freddie will issue seller/servicer guidance on Feb. 17 announcing the new HP products.

Moody's Investors Service downgraded the ratings of four classes and upgraded the ratings of three classes of Bear Stearns Commercial Mortgage Securities Inc., Commercial Mortgage Pass-Through Certificates, Series 1999-C1.Moody's attributed the downgrades of Classes G, H, I and J, to realized and expected losses from the specially serviced loans and LTV dispersion. As of the January 14, 2005 distribution date, the transaction's aggregate principal balance decreased by approximately 10.4% to $428.3 million from $478.0 million at securitization. The top three loan groups represent 10.2% of the outstanding pool balance. The largest loan group at $19.5 million is the Founders Plaza & Tower 14 Loan, which is secured by two cross-collateralized loans secured by two office properties in East Hartford, CT. Upgrades in Classes B, C, and D were due to increased subordination, the ratings agency said.

Homebuilder Meritage Homes Corp., based in Dallas, Tex., has entered into a definitive agreement to purchase the homebuilding assets of Colonial Homes of Fort Myers, Fla. a privately held builder of single-family homes and condominiums.The acquisition is expected to close within the next week, according to Meritage. Colonial closed 355 homes in 2004 at an average selling price of approximately $347,000, resulting in home closing revenue of $123 million. "Colonial has a solid land position, controlling about 1,800 lots, and an excellent product line," said John Landon, Meritage co-chairman and chief executive officer. "The Colonial culture is compatible with ours, and we are confident that the Colonial management team is capable of growing this division rapidly." Meritage anticipates closing approximately 400 homes in this division in 2005, said Mr. Landon. Tony Persichilli, division president of Colonial, will remain with the company as president of the Fort Myers/Naples division. Meritage is considering refinancing all or a portion of its outstanding $280 million 9 3/4% notes. If completed, this refinancing would result in a significant one-time charge to earnings, but would also result in significant ongoing interest savings, the company said.

Analysts at Sanford C. Bernstein & Co., New York, have downgraded their ratings on Freddie Mac, Radian Guaranty, and PMI Group.All three are now rated "market perform" instead of "outperform." Analysts Jonathan Gray and Adam Weinrich added that, "There are few mortgage finance stocks that we remain very interested in owning" in a recent report, citing political and economic pressures that might hurt the stocks. The downgrade of Freddie Mac reflects the stock's price, the analysts said. Fannie Mae remains rated "outperform" with a "moderate 20% upside." The analysts also are not keen on the mortgage insurance sector, saying that business growth will be unexciting and that possible home price declines "would terrify investors and damage relative valuations for the MIs."

Sales of existing condominium and cooperative units eased in the fourth quarter of 2004, the National Association of Realtors, Washington, reports, but hit a record for the ninth consecutive year considering sales for the entire year.The total of 970,000 condo and co-op properties sold for 2004 reflects an 8% increase from the previous record of 898,000 units for 2003, the realtors' trade association said. In the fourth quarter, sales of the units slid 3% to a "seasonally adjusted annual rate" of 972,000, from 1 million units in the third quarter. However, sales were 3.4% above the 940,000 units sold in the fourth quarter of 2003. Pricewise, the median price for an existing condo or co-op was $203,200 in the fourth quarter, 16.7% higher than the price a year ago. In comparison, a typical single-family home cost $187,500 in the fourth quarter, up 8.8% from a year ago, the NAR said. David Lereah, the NAR's chief economist, said, "The condo market has clearly matured over the last decade, accounting for a market share almost as big as the new home market, and has been appreciating faster than single-family homes." Consequently, the NAR will include condo sales in its monthly tracking of overall existing home sales, beginning with its January report, the trade association reports.

The Market Composite Index, an overall measure of mortgage applications increased 4.2% from 706.4 to 735.9 on a seasonally adjusted basis for the week ending February 4, according to the Mortgage Bankers Association's Weekly Mortgage Application Survey.On an unadjusted basis, applications increased 7.5% compared with the previous week but were down 8.7% compared with the same week one year earlier. The Purchase Index increased by 1.0% to 444.6 from 440.3 the previous week. The seasonally adjusted Refinance Index increased by 7.8% to 2430.7 from 2253.9 one week earlier. Refinancings increased to 48.9% of total applications from 48.7% the previous week. The adjustable-rate mortgage share of activity increased to 31.9% from 32.5% of total applications. The average contract interest rate for 15-year fixed-rate mortgages increased to 5.48 from 5.61 one week earlier, with points increasing to 1.25 from 1.27 for 80% LTV loans. The average contract interest rate for one-year ARMs decreased to 5.06% from 5.10% one week earlier, with points increasing to 1.10 from 1.07 including the origination fee for 80% LTV loans.

The average 30-year fixed rate mortgage fell to 5.57% with an average 0.8 points for the week ending February 10, 2005, down from 5.63% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed rate mortgage was 5.10% down from 5.14% the previous week. A year ago, the 15-year FRM averaged 4.96%. The average five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.99%, down very slightly from 5.00 the previous week. One-year Treasury-indexed adjustable-rate mortgages) averaged 4.11%, with an average 0.8 point, down from the previous week when it averaged 4.23% "January’s employment figures came out lower than expected, allowing bond yields to fall even further. This, in turn, caused mortgage rates to perform somewhat differently than we had expected," said Frank Nothaft, Freddie Mac vice president and chief economist. "In particular, the 1-year ARM fell for the first time in five weeks." At this time last year, the one-year ARM averaged 3.57%

Subprime lender American Business Financial Services, Philadelphia, which is operating under bankruptcy protection, has promoted Milton Riseman to president and chief operating officer.Mr. Riseman's promotion came late in the day Tuesday, on the eve of a hearing regarding debtor-in-possession financing for the struggling company. Prior to the promotion, Mr. Riseman had been serving as chairman of ABFS' Consumer Mortgage Group, responsible for sales, marketing and day-to-day operations of the company's affiliate, Upland Mortgage. During his career Mr. Riseman also served as president of Advanta Mortgage. The DIP hearing is scheduled for Wednesday morning, said a spokesman for the company.

AmeriDream, Inc. is extending a helping hand to nonresident Hispanics and other immigrant homebuyers by accepting Individual Taxpayer Identification Numbers issued by the Internal Revenue Service to individuals who do not have a Social Security Number.The Gaithersburg, Md.-based affordable housing solutions provider said it is responding to market demand. AmeriDream quoted findings by a National Association of Hispanic Real Estate Professionals study suggesting that immigration status creates major barriers to homeownership, so a growing number of lenders are accepting ITINs as a form of identification. (ITINs are issued regardless of immigration status allowing both resident and nonresident aliens to have U.S. tax returns and payment responsibilities under the IRS.) "We recognize that the use of ITINs can be a controversial issue," said AmeriDream president and CEO, Ann Ashburn. "However, there have been an increasing number of private lenders throughout the country that have begun ITIN loan and mortgage insurance programs."

During the refinance boom between 2001 and 2003, a majority of households used cash equity from their homes to cover living expenses and to pay down credit card debt, which eroded their home's cash value, according to a new report from Demos: A Network for Ideas & Action, a national nonpartisan public policy organization based in New York.Over the last few years, appraisal fraud has helped to fuel home prices, leaving many borrowers owing much more than the true value of their home, the report said. If home prices begin to go up, author Javier Silva believes that homeowners who reduced their homes' equity during the boom could be hurt. "A homeowner could end up owning more on their mortgage than the house is worth," said Mr. Silva. As the Federal Reserve continues to raise interest rates, a family with an adjustable rate mortgage will see a significant increase in their monthly payments. The combination of higher payments coupled with the rising costs of basic living expenses represents a growing financial threat, the report said. Demos is pushing for legislation at both the state and federal level to protect borrowers. They are urging Congress to ensure that brokers are prohibited from "coercing or intimidating" appraisers in order to receive a desired property appraisal value.

Despite claims by the Federal Reserve Board that fears of a housing bubble have been exaggerated, data suggests that consumers are not saving at all but rather are continuing to borrow more to get into homes, according to Dean Baker, co-director at the Center for Economic Policy and Research.During a public forum hosted in New York by Demos: A Network for Ideas & Action, Mr. Baker said housing prices have increased in major areas of the country where the bubble makes up a large chunk of the economy - California, New York and Washington D.C. In the bubble-inflated areas, he said turnaround can be 30% less than what the homeowner paid for the home. In terms of the macro-economy, if construction falls off at a national level, the housing market could take a major hit, Mr. Baker said. Also adding to the compelling case for a bubble is if rent prices begin to outpace inflation. Barbara Corcoran, founder and chairman of the Corcoran Group of New York, is not open to the possibility of a bubble. As a real estate broker she likes the idea of interest rates creeping up, because homeowners can absorb it better than if rates skyrocketed all at once. In New York City, she said seven out of 10 listings at her firm are selling at or above the asking price.

Bank of America is closing its private-label residential outsourcing unit, Financial Services Solutions, a joint venture operation that is partly owned by title insurance giant Fidelity National Financial.FSS president Greg Sullins told MortgageWire that, "our first task will be to shut down and take care of our one client." FSS employs about 400 and has offices in California, Kentucky, New York and North Carolina. Mr. Sullins said Bank of America has made a decision "to focus on its core business," noting that the decline in conventional residential production was a key factor in the move. (Loan volumes continue to be healthy in the non-conforming market but BoA exited that business several years ago.) FSS was launched in April 2003 during the height of the production boom. The biggest players in private-label outsourcing niche include PHH Mortgage, Countrywide and Nexstar Financial.

Radian Group Inc., Philadelphia, has completed a structured finance transaction to help manage nonprime credit risk that is the second of its kind.The transaction, Smart Home Reinsurance 2005-1 Ltd., was funded through the sale of $98.5 million of credit-linked notes backed by a pool of $1.68 billion of Alt-A mortgages that were insured by Radian. Roy J. Kasmar, president and chief operating officer of Radian, said the nonprime segment of the mortgage insurance market "is profitable, but it also requires a disciplined approach to risk management. Radian's experience in mortgage insurance and structured finance has enabled us to create a risk management solution so that we can continue to take advantage of growing opportunities in the [nonprime] market." The first structured transaction of this kind, Smart Home Reinsurance 2004-1, was completed in August 2004 and involved $882 million of first-lien, nonprime residential mortgages.