Originations

Business at the nation's private mortgage insurance firms continued to shrink in November, as the dollar volume of primary new insurance written declined by over 5% from the previous month's level and the number of new applications fell by over 12%, according to data from members of the Mortgage Insurance Cos. of America.In October, the group's members (all the players in the industry except Radian) wrote $17.6 billion of primary new insurance. That fell to $16.7 billion one month later. Traditional primary insurance written fell during the period from $13.6 billion to $13.3 billion. Meanwhile the number of applications fell from 142,087 to 124,731, the second-worst total of the year, and an indication that the results will not improve when December's numbers are reported. New pool risk written increased from $21.6 million in October to $39.5 million in November. There was a slight improvement in delinquencies, as the ratio increased from 73.9% in October to 84.2% in November. There were 36,237 cures and 43,050 defaults during November. MICA can be found online at http://www.micanews.com.

Fitch Ratings has assigned primary and special servicer ratings to Bayview Loan Servicing LLC for its servicing of small loans for commercial mortgage-backed securities.The ratings were as follows: primary servicer, CPS3-plus Small Loans; and special servicer, CSS3-plus Small Loans. Fitch said the primary servicer rating reflects Bayview's "experienced servicing management and staff, including asset managers, and its experience as a small-balance commercial mortgage loan servicer." The special servicer rating, the first assigned in Fitch's CMBS small-loan servicer rating program, is based on the company's ability to "work out, resolve, and dispose small-balance commercial mortgage loans and real-estate-owned properties," the rating agency said. Fitch rates commercial mortgage servicers on a scale of 1 to 4, with 1 being the highest rating.

Sales of existing single-family homes in Florida totaled 17,116 in November, up 9% from the level recorded a year earlier, according to the Florida Association of Realtors.The median sales price of homes sold in November climbed to $192,400, up 22% from $157,400 in November 2003, FAR said. Among the state's larger metropolitan statistical areas, resales increased 30% in Jacksonville, 8% in Orlando, and 4% in Tampa-St. Petersburg-Clearwater, but were virtually unchanged in Miami, FAR reported.

Sales of existing single-family homes in Illinois rose to 9,977 in November, up 18.8% from 8,398 a year earlier, according to the Illinois Association of Realtors.The statewide median sales price rose 9.2% to $184,000 from $168,600 a year earlier, the association said. "The surprising number of Illinois home sales reported in November delivered reinvigorating confidence to the financial and real estate market," said John Veneris, president of the association. In the Chicago metropolitan statistical area, resales totaled 6,234 in November, up 17.4% from 5,311 a year earlier, and the median sales price was $242,600, up 10.2%. The association can be found on the Web at http://www.illinoisrealtor.org.

Fannie Mae has announced a $1.5 million deposit to Bank2, Oklahoma City, a state-chartered bank owned by the Chickasaw Nation, to help generate affordable housing for underserved families and increase homeownership among Native Americans.Fannie said the Community Development Financial Institution certificate of deposit investment was made under the Certificate of Deposit Account Registry Service program, which allows funds above the federal deposit insurance ceiling of $100,000 to be fully insured by the Federal Deposit Insurance Corp. The first such deposit investment for Fannie Mae, it is part of Fannie's CDFI Initiative to increase financial backing for CDFIs investing in affordable housing for low- and moderate-income families. Fannie's Oklahoma Partnership Office director, Rex Smitherman, said Fannie Mae will increase its investments to support tribal housing initiatives to at least $1.25 billion over the next decade as part of the American Dream Commitment to expand the supply of affordable housing. "Our investment will expand on the work we're doing with 147 tribes across the country to date," he said. Fannie Mae can be found online at http://www.fanniemae.com.

The Market Composite Index, an overall measure of mortgage applications, fell from 689.3 to 677.4 on a seasonally adjusted basis during the week ended Dec. 24, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications fell 31.7% on the week but were up 36.6% from the level of a year earlier. The Purchase Index rose from 471.1 to 483.8 on a seasonally adjusted basis, while the Refinance Index declined from 1958.2 to 1803.9. Refinancings represented 46.2% of total applications, down from 48.9% the previous week, while adjustable-rate mortgages accounted for 33.8%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages rose from 5.69% to 5.72%, and points (including the origination fee) fell from 1.39 to 1.33 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mortgagebankers.org.

The average 30-year fixed mortgage rate rose to 5.81% for the week ending Dec. 31 from 5.75% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate rose from 5.18% to 5.23%, while the average rate for one-year Treasury-indexed ARMs climbed from 4.17% to 4.19%. Fees and points averaged 0.6 of a point for all three mortgage categories. "The 30-year FRM came in under 6% for the last 22 weeks of this year," said Amy Crews Cutts, Freddie Mac's deputy chief economist. "As a matter of fact, mortgage rates in 2004 averaged around 5.84%, the second-lowest annual rate ever recorded in the history of Freddie Mac's Primary Mortgage Market Survey." A year ago, the average 30-year and 15-year fixed rates were 5.85% and 5.15%, respectively, and the average one-year ARM rate was 3.72%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

Sales of existing single-family homes rose 2.7% in November to set a new annual sales record, while house price appreciation hit 10.4%.The National Association of Realtors reported that existing-home sales rose from a seasonally adjusted annual rate of 6.76 million in October to 6.94 million in November. Sales of existing homes for the first 11 months of 2004 have already surpassed the 2003 record of 6.1 million single-family units sold. NAR chief economist David Lereah said the housing market remains "very healthy," despite a Dec. 23 report by the U.S. Census Bureau that new-home sales fell by 12% in November. Mr. Lereah called the decline an "anomaly" and said he expects that government economists will revise it upward. Even though house prices are rising at the fastest clip in 17 years, the NAR economist stressed that, in his view, there is "no price bubble." He is forecasting a modest slowdown in sales next year, which should take some pressure off prices. The NAR can be found online at http://www.realtor.org.

The sharp rise in energy prices in 2004 put less strain on household finances than might have been expected because American homes built in the past few years are nearly twice as energy-efficient as a typical house built in the 1960s, according to an analysis by Freddie Mac economists."Crude oil prices have pulled back from a peak of $55.23 per barrel this past October, but as the nation enters its coldest season, oil prices are still considerably higher than the $30 a barrel of West Texas crude cost a year ago," said Frank Nothaft, Freddie Mac's chief economist. "And while we are certainly feeling the increase in oil prices at the gas pump and maybe even in our heating bills, the cost to families would be much greater if not for improvements in home energy efficiency." According to data analyzed by Freddie Mac from the American Housing Survey, fuel costs as a percentage of home value totaled about 0.8% from 2000 to 2003, versus about 1.8% before 1960 and an average of 1.3% in the oil-shock decade of the 1970s. Freddie Mac can be found online at http://www.freddiemac.com.

Real estate remains a cyclical investment, and after five years of excellent performance the cycle is beginning to turn, a real estate writer is cautioning.Steve Bergsman, author of "Maverick Real Estate Investing: the Art of Buying and Selling Real Estate Like Trump, Zell, Simon and the World's Greatest Landowners," says an investment in real estate investment trusts gained an average of 14.5% over the past five years, compared with a 9% decline by the S&P 500. Investments in individual properties have also done well. With so much capital flowing into real estate, property prices continued to appreciate. "While this has been happening over the past few years, investments were still worthwhile because the cost of money was so cheap," Mr. Bergsman says. "With interest rates rising and costs of capital increasing, many deals will no longer make sense." In addition, real estate has benefited from "transient" money that moved out of stocks and bonds in pursuit of a better alternative. "When the transient money leaves, real estate prices will decline dramatically," he says.

Ashford Hospitality Trust, Dallas, has acquired a 21-property hotel portfolio for $250 million from affiliates of the Fisher Brothers, the Gordon Getty Trust, and George Soros, as well as some members of Ashford's senior management team.The real estate investment trust said the acquisition price for the 4,094-room portfolio includes the assumption of $164.7 million in debt, as well as $35 million in cash and the issuance of $50.3 million in operating partnership units. Monty J. Bennett, Ashford's president and chief executive officer, said the acquisition will provide Ashford added brand and geographic diversification. "The majority of the assumed debt will be fixed-rate, increasing our ratio of fixed- to floating-rate debt with only a minimal increase to our overall cost of debt," Mr. Bennett said. The purchase price for the acquisition, which is expected to be completed in February 2005, reflects a capitalization rate of 9.3%, based on the property's net operating income for the trailing 12-month period, the REIT said.

American Business Financial Services Inc., a Philadelphia-based company that originates, sells, and services home mortgage loans via subsidiaries, has announced that it cannot repay maturing debt obligations until a registration statement has been okayed by the Securities and Exchange Commission.ABFS said it filed the registration statement with the SEC in October, and cannot sell subordinated debentures until it is declared effective. The company said it cannot predict "whether or when" it will get through the SEC registration process. "The company's limited ability to sell subordinated debt during the second quarter of fiscal 2005 and the level of subdebt redemptions experienced during this period seriously depleted the company's cash," ABFS said. As a result of the liquidity problems, the company said it is not in compliance with several requirements of its credit facilities. "Under the terms of these credit facilities, this noncompliance creates an event of default, and the lenders may declare all amounts outstanding under the facilities immediately due and payable; however, to date, the lenders have not elected to take such action," ABFS reported.

Two classes of GMAC Commercial Mortgage Securities Inc.'s mortgage pass-through certificates, series 2000-C1, have been downgraded by Fitch Ratings.Class M was downgraded from CCC to CC, and class N was downgraded from CC to D. Fitch also affirmed the ratings on 13 other classes in the transaction. The downgrades were attributed to expected losses on several specially serviced loans. Six loans are in special servicing, including four that are 90 days delinquent and one that is real estate owned. Fitch can be found online at http://www.fitchratings.com.

A combination of personal preferences and economic factors -- such as the fact that transportation is the second-largest household expense after housing -- will drive a higher demand for housing near transportation zones in the future, according to an analyst with the Urban Land Institute.Addressing a National Housing Conference in Washington, ULI senior resident fellow Robert Dunphy said almost 50% of consumers in a recent survey stated a preference for shorter commutes, even if it translates into a smaller home, or a home on a smaller lot. And slightly more than 50% would rather live in a larger home, even if they have to commute for over 45 minutes each way. The study, "Hidden in Plain Sight: Capturing the Demand for Housing Near Transit" (funded by the Federal Transit Administration), also indicated that over the next 25 years there will likely be a significantly higher demand for housing near transportation zones located within a half-mile radius of transit centers. At least a quarter of all new households, or 14.6 million, could be looking for housing in these transit zones. The growing demand is expected not only in metropolitan areas like New York, Chicago, and San Francisco, but also in cities with growing public transportation systems such as Atlanta, Charlotte, N.C., and Sacramento, Calif., according to the study.

Commercial and multifamily mortgage debt outstanding increased 2.4% to a record $2.2 trillion in the third quarter, according to the Mortgage Bankers Association.The figures were based on an analysis of Federal Reserve Board data. "Last quarter the growth was powered almost entirely by the commercial bank and CMBS sectors, which pumped an additional $44 billion into the market," said Doug Duncan, the MBA's chief economist. Commercial banks hold the largest share of these mortgages, at $951 billion (43% of the total), the MBA said. Commercial mortgage-backed securities issuers hold $401 billion (18%), followed by life insurance companies, $247 billion (11%), and savings institutions, $178 billion (8%). Government-sponsored enterprises hold $124 billion in the form of multifamily mortgages that back the securities they issue and also hold $57 billion in their own portfolios, for a total share of 8.4%.

New single-family home sales dropped 12% in November, but that is not going to stop 2004 from going into the record books.The U.S. Census Bureau reported that new-home sales fell from a seasonally adjusted annual rate of 1.28 million in October to 1.13 million in November. The October number was revised upward by 50,000 units, which exacerbated the drop. After 11 months, the pace of new-homes sales is up 10.3% from last year's record pace. "The fundamentals supporting housing demand still are quite solid," said David Seiders, chief economist of the National Association of Home Builders. "Sales of new single-family homes will hit a record in 2004 despite the surprising decline reported for November." New-home sales have remained above the 1 million mark for the last 21 months.

Delta Financial Corp., a finance company based in Woodbury, N.Y., that originates, securitizes, and sells nonconforming residential mortgage loans, has announced a $200 million increase in its warehouse financing capacity.Delta said the additional funding brings its total funding capacity to $900 million through three financing providers. Hugh Miller, Delta's president and chief executive officer, reiterated the company's previous guidance of more than $2.5 billion in loan originations for 2004. The company can be found on the Web at http://www.deltafinancial.com.

The Market Composite Index, an overall measure of mortgage applications, rose from 689.0 to 689.3 on a seasonally adjusted basis during the week ended Dec. 17, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications fell 0.5% on the week but were up 8.5% from the level of a year earlier. The Purchase Index fell from 488.9 to 471.1 on a seasonally adjusted basis, while the Refinance Index climbed from 1852.4 to 1958.2. Refinancings represented 48.9% of total applications, up from 46.0% the previous week, while adjustable-rate mortgages accounted for 34.4%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages rose from 5.65% to 5.69%, and points (including the origination fee) rose from 1.28 to 1.39 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mortgagebankers.org.

The average 30-year fixed mortgage rate rose to 5.75% for the week ending Dec. 24 from 5.68% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate rose from 5.11% to 5.18%, while the average rate for one-year Treasury-indexed ARMs declined from 4.18% to 4.17%. Fees and points averaged 0.6 of a point for all three mortgage categories. "In November, the ARM share of loan applications slipped to 34% from 36% in October, in response to the Fed's sequential actions to push short-term interest rates higher," said Frank Nothaft, Freddie Mac's chief economist. "As ARM rates began to rise, long-term rates showed no inclination to follow, and remained at very affordable and attractive levels." A year ago, the average 30-year and 15-year fixed rates were 5.82% and 5.14%, respectively, and the average one-year ARM rate was 3.77%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

Sovran Self Storage Inc., a real estate investment trust based in Buffalo, N.Y., has announced an increase in its line of credit from $75 million to $100 million and a provision allowing for its expansion to as much as $200 million.The REIT said the modification also provides for a decrease in the interest rate to the London interbank offered rate plus 0.9%; a one-year increase in the term to September 2007; the elimination of the facility's non-usage fee; and the imposition of a 20-basis-point facility fee. The lead arranger was Banc of America Securities, with participation by M&T Bank, PNC Bank, SunTrust, HSBC, Chevy Chase, and Citizens Bank. The REIT can be fund online at http://www.sovranss.com.