Originations

The average 30-year fixed mortgage rate fell to 5.72% for the week ending Nov. 26 from 5.74% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate held steady at 5.15%, while the average rate for one-year Treasury-indexed ARMs rose from 4.17% to 4.27%. Fees and points averaged 0.6 of a point for fixed-rate mortgages and 0.7 of a point for ARMs. "At this time last year, our forecast called for interest rates for 30-year fixed-rate mortgages to exceed 6% by this time this year," said Frank Nothaft, Freddie Mac's chief economist. "Today's annual average mortgage rates are below even that projection thanks to the spring 'soft patch' in economic growth." A year ago, the average 30-year and 15-year fixed rates were 5.83% and 5.17%, 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.

Olympus Mortgage Co., a wholesale lender based in Orange, Calif., has announced a merger of its operations with those of Argent Mortgage Co., the wholesale unit of Orange-based Ameriquest Capital Corp.The terms of the deal were not disclosed, and further details were not available at MortgageWire's deadline. The companies can be found on the Web at http://www.olympusmortgage.net and http://www.argentmortgage.com.

New single-family home sales rose slightly in October as lower mortgage rates continued to support strong demand by homebuyers.The U.S. Census Bureau reported that new home sales rose 0.2% to a seasonally adjusted annual rate of 1.23 million in October from 1.22 million in September. Haseeb Ahmed, a senior economist at Economy.com, said he expects that November sales will also be strong, followed by a slight decline in December as another record year ends. Economy.com, based in West Chester, Pa., estimates that new-home sales will total 1.15 million to 1.18 million by year-end, and that there will be a 4% decline in 2005 sales due to rising interest rates. Despite an improving jobs market, "there is no pent-up demand," Mr. Ahmed said.

Two classes of J.P. Morgan Commercial Mortgage Finance Corp.'s mortgage pass-through certificates, series 1999-C8, have been downgraded by Fitch Ratings.Class H was downgraded from BB-minus to B-plus, and class J was downgraded from CC to C. In addition, Fitch affirmed 10 classes in the deal. The downgrades were attributed to expected losses on a specially serviced loan. Fitch said five loans are currently in special servicing, the largest of which is secured by a vacant office property in Boston that had been 100% occupied by a government tenant whose lease expired in January 2004. The special servicer, ARCap Servicing, Inc., is pursuing a note sale on the property. "Based on a recent appraisal value, losses are expected at the time the loan is liquidated from the trust," Fitch said, adding that it expects the losses to reduce the balance of class K to zero, at which time the rating of class K will be withdrawn.

Seven classes of Credit Suisse First Boston Mortgage Securities Corp.'s commercial mortgage pass-through certificates, series 2001-FL2, have been downgraded by Moody's Investors Service.The downgrades were as follows: class G, from Ba1 to Ba2; class H, from Ba2 to Ba3; class J, from Ba3 to B1; class K, from B2 to B3; class L, from B3 to Caa1; class M, from Caa2 to Caa3; and class N, from Ca to C. In addition, Moody's upgraded three classes and affirmed the ratings of seven classes in the deal. The certificates are collateralized by five floating-rate mortgage loans secured by commercial and multifamily properties. The four largest loans, representing 77% of the pool, are in special servicing, and the fifth is on the master servicer's watchlist, the rating agency said. Moody's has estimated aggregate losses of approximately $19.4 million for all the specially serviced loans. Moody's can be found online at http://www.moodys.com.

Mortgage Guaranty Insurance Corp., Milwaukee, has announced financial support for Neighborhood Reinvestment Corp.'s national homeownership education and counseling initiative, NeighborWorks Center for Homeownership Education and Counseling.While not citing a dollar figure, MGIC said it will provide scholarships for 150 families of modest means to attend homeownership education courses at NeighborWorks Training Institutes over the next three years. NCHEC's efforts have resulted in a one-third reduction of delinquent payments at the 90-day mark for its participants, MGIC reported. "Our support of NCHEC further enhances our SmartPath program, which provides consumers lower MI premiums when they receive pre-purchase face-to-face counseling and education," said Geoffrey Cooper, MGIC's director of emerging markets. MGIC, the principal subsidiary of MGIC Investment Corp., can be found online at http://www.mgic.com.

Nine national organizations are pledging to raise $37 million in grants and loans to provide "supportive housing" for homeless people and to work together in a new partnership to end homelessness.Approximately 250,000 individuals and as many as 30,000 families are believed to face long-term homelessness, according to the new Partnership to End Long-Term Homelessness. Supportive housing combines permanent housing with health, social, and employment services. "We encourage other foundations, corporations, and providers of national, state, and local levels join us and work together to put in place a solution to chronic homelessness," said Risa Lavizzo-Mourey, president of the Robert Wood Johnson Foundation. Other partners include Fannie Mae and its foundation, Deutsche Bank, The Conrad Hilton Foundation, The Rockefeller Foundation, and Melville Charitable Trust. The new partnership will also strive to increase public funding for supportive housing

AmeriVest Properties, Denver, has announced that it is looking at strategic alternatives, including a possible sale or merger, citing "fierce competition for high-quality office buildings and the valuations for these assets in the private market."The company, which owns and operates office properties in Denver, Phoenix, Dallas, and Indianapolis, has hired Bear, Stearns & Co. to assist in evaluating the options. These could include "identifying an institutional capital partner to assist in the company's growth," a sale or recapitalization of some or all the company's properties, and a sale or merger of the company, AmeriVest said. "We believe that this is an appropriate time for AmeriVest to review its strategic direction and identify possible partners that can assist us in continuing our growth," said William Atkins, chairman and chief executive officer of AmeriVest. "We continue to believe that our focused small-tenant strategy makes sense in the U.S. office market."

Sales of existing single-family homes held steady near record levels in October as low mortgage rates continued to feed a strong housing market.The National Association of Realtors reported that existing-home sales fell 0.1% to a seasonally adjusted annual rate of 6.75 million in October, down from an upwardly revised rate of 6.76 million in September. "The ongoing stimulus of lower-than-expected mortgage rates was the primary driver of strong home sales in October," NAR chief economist David Lereah said. NAR economists estimate that resales will total 6.55 million by the end of December, easily beating the 2003 record of 6.1 million sales. Meanwhile, house price appreciation is not slowing down. The NAR reported that the median house price was $187,000 in October, up 8.8% on an annual basis. The NAR can be found on the Internet at http://realtor.org.

Moody's Investors Service has placed three classes of Credit Suisse First Boston Mortgage Securities Corp. commercial mortgage pass-through certificates, series 2002-TFL1, on review for possible downgrade.The affected classes are F-WBC, G-WBC, and H-WBC. Moody's said the watchlisted certificates pertain to the Williamsburg & The Commons Loan, which is secured by two cross-collateralized and cross-defaulted garden-style apartment properties in the Cincinnati area that contain a total of 1,264 units. The rating agency reported that a default was declared on the loan on Aug. 16 due to waste, as well as the borrower's failure to comply with certain covenants and conditions. The special servicer has commenced foreclosure.

Conventional funders took it on the chin in the third quarter while subprime firms once again set a new quarterly production record, according to exclusive survey figures compiled by National Mortgage News.NMN and its affiliate, the Quarterly Data Report, found that all residential lenders funded $663 billion in product during the third quarter, the industry's second-worst quarterly showing in more than two years. But in the subprime niche, lenders originated a record $160 billion in product, accounting for 24% of all U.S. loans funded. The previous subprime record was $157 billion, set in the second quarter. Refinancings accounted for 44% of all loans funded in the quarter, the lowest refi percentage since the fourth quarter of 2000. Countrywide Home Loans, Calabasas, Calif., ranked first among all funders in the quarter, originating $91.8 billion, which gives it a 13.86% market share. (For complete rankings, see the Nov. 29 issue of NMN.)

Class G of Merrill Lynch Mortgage Investors commercial mortgage pass-through certificates, series 1996-C2, has been placed on Rating Watch Negative by Fitch Ratings.The rating agency attributed the action to uncertainty about the resolution of loans secured by the Shilo Inn, as well as expected losses on several loans in special servicing that "may severely affect" the credit enhancement of the class. Sixteen loans are being specially serviced by Criimi Mae, and four are collateralized by Shilo Inn properties (three in Oregon and one in Washington), Fitch said. The rating agency can be found online at http://www.fitchratings.com.

Scott Rechler, president and chief executive officer of Reckson Associates Realty Corp., has been named chairman of the board of Reckson to fill the vacancy created by the recent resignation of Donald Rechler.Reckson, a real estate investment trust based in Melville, N.Y., said the 70-year-old Donald Rechler, a co-founder of the office REIT, resigned to pursue nonbusiness interests. Reckson noted that the resignation came a year after the sale of the company's Long Island industrial portfolio and the related restructuring in which Donald Rechler stepped down as co-CEO. Reckson can be found on the Web at http://www.reckson.com.

The Commercial Mortgage Securities Association and the Mortgage Bankers Association have announced the release of the Borrower Guide to CMBS, which they said is aimed at increasing borrowers' understanding of commercial mortgage-backed securities.The guide provides a summary of the parties involved in the CMBS process, as well as issues that may arise when a loan is securitized. "Unlike traditional bank or balance sheet lenders, financing through conduit loans often entails complex structural issues that may not be terribly apparent to the borrower on the front end," said Jack Cohen, chair of the CMSA Borrower Satisfaction Task Force and chief executive officer of Cohen Financial. The Borrower Guide to CMBS is available on the two organizations' websites, at http://www.cmbs.org and http://www.mortgagebankers.org.

Despite strong demand for adjustable-rate mortgages, single-family originations by thrift institutions fell 16% in the third quarter, from $173.5 billion in the second quarter to $145.5 billion.The Office of Thrift Supervision reported that ARMs made up 56% of thrift originations in the third quarter, up from 50% in the second quarter. Refinancings dropped from 37% of production in the second quarter to 31% in the third quarter. While ARMs production is high, thrifts continue to be sellers. Thrifts sold $122.7 billion of one- to four-family loans during the third quarter, down only 13% from sales in the second quarter. Thrifts posted $3.5 billion in earnings in the third quarter, the second-highest level on record, and total assets rose slightly, to $1.23 trillion. However, the number of thrift institutions dipped below 900 in the third quarter, to 896.

The California commercial loan delinquency ratio was below one-half of 1% in the third quarter for the 24th consecutive quarter, according to the California Mortgage Bankers Association.The Sept. 30 Quarterly Delinquency Survey found that 99.8% of the California commercial real estate loans serviced by 18 mortgage banking firms were either current or delinquent by only one payment. This represents a delinquency ratio of 0.24%, compared with 0.33% three months ago and 0.24% a year ago. Sixteen of the 18 companies reported no loans more than 30 days delinquent. Of the $60.7 billion of loans being serviced by the 18 mortgage bankers, 15 loans totaling $143.1 million were two or more payments past due. The 15 delinquent loans represent 0.15% of the 9,884 commercial real estate loans included in the survey. For survey purposes, a loan is considered delinquent if it is two or more payments past due, although loans in foreclosure are included regardless of the number of payments past due. The CMBA, based in Sacramento, can be found online at http://www.cmba.com.

Commercial and multifamily mortgage originations totaled $34.1 billion in the third quarter, up 15.2% from the volume recorded a year earlier, according to a quarterly survey by the Mortgage Bankers Association.The volume was 2.3% higher than that of the second quarter. "Continued demand for commercial mortgages -- from both borrowers and lenders -- is setting up 2004 to break 2003's record origination levels," said MBA chief economist Doug Duncan. "And while modestly rising interest rates could take some wind out of the sails, stabilizing market conditions and low delinquency rates will likely keep capital flowing to commercial and multifamily properties." The MBA reported that purchases by commercial mortgage-backed security conduits accounted for $9.4 billion of loan originations in the third quarter, followed by commercial banks, $8.2 billion; life insurance companies, $7.4 billion; and Fannie Mae and Freddie Mac, $5.1 billion. The group can be found online at http://www.mortgagebankers.org.

The average 30-year fixed mortgage rate fell to 5.74% for the week ending Nov. 19 from 5.76% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate slipped from 5.16% to 5.15%, while the average rate for one-year Treasury-indexed ARMs crept up from 4.16% to 4.17%. Fees and points averaged 0.6 of a point for fixed-rate mortgages and 0.7 of a point for ARMs. "Because long-term mortgage rates are still well below the peak levels reached [in May], housing starts are currently exceeding expectations," said Frank Nothaft, Freddie Mac's chief economist. "With no dramatic rise in rates on the horizon, the housing industry should continue to be healthy well into the future." A year ago, the average 30-year and 15-year fixed rates were 6.03% and 5.39%, respectively, and the average one-year ARM rate was 3.76%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

LaSalle Hotel Properties, Bethesda, Md., has announced a public offering of 1.75 million shares of common stock.The net proceeds of the offering totaled approximately $54.9 million, LaSalle said. The company also granted the underwriters an option to buy up to 250,000 additional shares to cover any overallotments. The offering was led by Raymond James & Associates and Wachovia Capital Markets LLC. LaSalle, a real estate investment trust, can be found online at http://www.lasallehotels.com.

Taubman Centers Inc., a real estate investment trust based in Bloomfield Hills, Mich., has priced a public offering of 4 million shares of 8% preferred stock at $25 per share.The series G cumulative redeemable preferred stock has no stated maturity, sinking fund, or mandatory redemption and is not convertible, the company said. Morgan Stanley & Co. is the lead manager for the offering, and KeyBanc Capital Markets, a division of McDonald Investments Inc., is the co-manager. Taubman can be found on the Web at http://www.taubman.com.