Originations

Home Mortgage Disclosure Act data for 2003 indicate that Countrywide Home Loans Inc., Calabasas, Calif., has become the leading mortgage lender to "emerging markets" communities, according to Countrywide.The data, released by the Federal Financial Institutions Examinations Council, show that Countrywide originated or purchased 440,870 loans made last year to members of minority groups, topping the ranks of mortgage lenders. The total represented an increase of 65.5% from the previous year's volume, the company said. The data also indicate that Countrywide made $74.7 billion in loans to African-American, Asian/Pacific Islander, Hispanic, and American Indian/Alaskan Native borrowers, the company said. Countrywide can be found online at http://www.countrywide.com.

Stewart Mortgage Information, Houston, has launched a Stewart Master Residential Junior Loan Policy designed to provide lenders with a lower-cost title insurance product offering limited coverage for junior-lien mortgage loans.The eQuick Policy, which conforms to the American Land Title Association standard form, can be used for primary residences of one to four units and second homes of one unit, but not for commercial or multifamily properties, Stewart said. Other criteria include a maximum loan amount of $500,000, fee-simple property ownership, and a property size of 25 acres or less. "As the refinance market has fallen off, lenders continue to push their home equity and second-lien loan products to generate new business," said Kevin Gugenheim, SMI president and chief operating officer. "Their dilemma has been whether to pay first-lien title coverage rates or go uncovered with traditional uninsured title products. Our new eQuick Policy offers a significantly lower-cost title insurance solution for those junior-lien loans and it is generated electronically to provide more efficient customer service."

Homebridge Mortgage Bankers, a New York residential mortgage lender, has announced the introduction of the PayOption ARM Mortgage, which it says offers great flexibility and can reduce monthly payments up to 45%.The loan program provides options such as a minimum monthly payment, at a 1% start rate; an interest-only payment that is priced off the fully indexed rate; and a 30-year or 15-year amortization schedule. "The PayOption ARM is available to all qualified borrowers, but is especially attractive to those whose monthly income may be limited and often rely on sizable year-end bonuses for the large portion of their yearly compensation," the company said.

The Market Composite Index, an overall measure of mortgage applications, fell from 724.8 to 658.2 on a seasonally adjusted basis during the week ended Oct. 8, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications were down 9.2% on the week but were up 0.7% from the level of a year earlier. The Purchase Index fell from 459.0 to 436.3 on a seasonally adjusted basis, while the Refinance Index declined from 2270.8 to 1949.2. Refinancings represented 44.5% of total applications, down from 47.1% the previous week, while adjustable-rate mortgages accounted for 34.9%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages fell from 5.78% to 5.69%, and points (including the origination fee) decreased from 1.36 to 1.30, for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mortgagebankers.org.

Nexstar Financial, St. Louis, a fast-growing private-label funder, has landed a major new client -- Morgan Stanley Dean Witter, one of the nation's largest retail brokerage firms.Under the agreement, MSDW's customer-service officers will take mortgage applications from its brokerage clients using Nexstar's technology. Nexstar will then process, underwrite, and fund the loan behind the scenes for MSDW. In a recent interview with National Mortgage News, Nexstar chief executive Richard Thornberry said the company is also talking to two additional firms that might become clients early next year. Formed five years ago (and backed by the buyout firm of Kohlberg, Kravis and Roberts), Nexstar has almost 30 clients. As a private-label funder, it competes against Cendant Mortgage Corp., Mt. Laurel, N.J., and others in that niche.

Unable to sell its mortgage unit at a price it deems acceptable, Cendant Corp., New York, has decided to spin off the division to current shareholders in an offering scheduled for the first quarter.Announcing the deal on Wednesday morning, Cendant chairman Henry Silverman noted that the parent company and PHH Corp. (the Cendant entity that houses Cendant Mortgage Corp. and a fleet division) will enter into a joint venture agreement whereby Cendant and PHH will split all profits on mortgages referred to CMC by Cendant's realty division. Mr. Silverman estimates that about 30% of CMC's production is sourced through Cendant-owned realty firms. Cendant values PHH Corp. (CMC and the fleet division) at about $1.2 billion. The mortgage unit, the nation's largest private-label originator, earns about $120 million a year after taxes. The spin-off announcement comes on the same day that one of CMC's competitors, Nexstar Financial of St. Louis, disclosed that it had landed a huge private-label client -- Morgan Stanley Dean Witter Credit Corp., one of the nation's largest retail brokerage firms [see next item]. (For the complete stories on CMC and Nexstar, see the Oct. 18 issue of National Mortgage News.)

American Church Mortgage Co., Minnetonka, Minn., is making a public offering of $23 million of secured investor certificates.The real estate investment trust reports that the offering is being made on a "best-efforts basis." Scott J. Marquis, ACMC's vice president of church loan advisers, told MortgageWire that the certificates will be offered on a "perpetual basis," with ACMC selling as many of them as possible over a one-year period. The REIT makes mortgage loans to churches and other nonprofit religious organizations. Since the offering opened on Oct. 8, about $2.3 million has been raised, according to Mr. Marquis.

Winston Finance Partners LLC has finalized a $50 million credit facility, according to its parent company, Winston Hotels Inc., a real estate investment trust based in Raleigh, N.C.The three-year facility with Marathon Structured Finance Fund LP will allow Winston Finance to borrow up to $50 million to provide hotel loans to the lodging industry, the REIT said. This represents an expansion of Winston Finance's hotel lending program, Winston Hotels said. The parent company can be found on the Web at http://www.winstonhotels.com.

Citing regulatory burdens, Kennedy Wilson Inc., Beverly Hills, Calif., has announced that it intends to deregister its common stock with the Securities and Exchange Commission.The real estate investment and services firm said it intends to file a Form 15 with the SEC on Nov. 1 to suspend its reporting obligations (including Form 10-K) under the Securities Exchange Act of 1934. Kennedy Wilson said its stock will no longer be listed on the NASDAQ National Market. The company said it expects its stock to be traded over the counter on the so-called Pink Sheets, but that it "can make no assurances" that any broker will make a market in its stock. William J. Morrow, the company's chairman and chief executive officer, said the board "has determined that the increasing financial cost and commitment of management's time to ever-increasing regulatory requirements have become an excessive burden that will only grow over time." Freeing up the resources "will allow us to better execute both tactical and strategic plans," he said.

A group of New York credit unions have pledged $100 million to fund affordable mortgage programs in underserved areas, the largest such fund ever organized by credit unions.The New York CU Loan Fund for Underserved Neighborhoods was unveiled in Rochester on Monday by Sen. Hillary Clinton, D-N.Y. The unveiling came during a conference for the underserved organized by Debbie Matz, a board member of the National Credit Union Administration. Michael Vadala, president of Rochester's Summit FCU, who also helped organize the conference, said he came to an agreement on the outlines for the credit union affordable mortgage fund during discussions with Sen. Clinton's staff. Mr. Vadala, who pledged $2 million from his credit union, said he will be meeting soon with credit union executives during the state's annual CEO roundtable to solicit additional participants.

California topped the mortgage origination chart last year with nearly 3.39 million loans, which represented 15.9% of the total number of U.S. originations but 24% by dollar volume, according to the Mortgage Bankers Association.The MBA reported that Florida had the second-highest number of originations, 1.18 million, followed by Texas, with 967,000; Illinois, with 948,000; and Michigan, with 829,000. On the subprime front, California led the pack with 443,000 originations, followed by Florida (150,000), Texas (132,000), and New York (85,000). The numbers were published in two market summary reports: 2003 Mortgage Originations by State and 2003 Prime and Subprime Mortgage Originations by State. The MBA can be found on the Web at http://www.mortgagebankers.org.

This could prove to be a record year for the issuance of U.S. commercial mortgage-backed securities, with total issuance of $87 billion, according to Moody's Investors Service.The projected total includes $65 billion of issuance at the end of the third quarter and another $22 billion in the pipeline. At the rating agency's sixth annual CMBS conference, Moody's analyst Jim Duca reported that fusion deals are dominating the issuance, accounting for 79% of Moody's-rated deals as of the third quarter. And expectations of higher interest rates have caused a 30% increase in fixed-rate issuance so far, compared with that of last year ($52 billion, or 80%, of the Moody's-rated deals so far this year are fixed-rate). Regarding the impact of a rising interest rate environment, analyst Tad Philipp said he expects that the appetite of the government-sponsored enterprises for multifamily-backed CMBS may decline as home refinancings decline. Mr. Philipp said Moody's does not necessarily believe that a rising economy will lead to rising rents in all cases, and that the laws of supply and demand still apply to real estate. Moody's can be found online at http://www.moodys.com.

Bank of America will lay off and provide severance packages to an undisclosed number of mortgage-related staff as the company cuts 4,500 positions across all its global business lines to reduce its total employment by about 2.5%.A spokeswoman told MortgageWire that she could not comment on how many mortgage-related positions would be affected, but noted that "one of the three drivers of this reduction was in fact the decrease in mortgage refinancing." The spokeswoman said BoA has "right-sized" the mortgage business "to meet customer demand, which has decreased." According to the company, the job reductions "begin this month" and "will be in predominantly non-customer-facing positions." The company says it expects that severance packages will result in an expense of approximately $150 million over the next three quarters, but believes the move will ultimately allow the company to operate more efficiently. Bank of America can be found on the Web at http://www.bankofamerica.com.

Employment in the mortgage sector hit a new high in August as lenders resumed hiring and added 4,000 full-time employees to their payrolls, according to the September employment report by the U.S. Bureau of Labor Statistics.The August increase erased a loss of 1,600 jobs in July. Total employment in the mortgage sector has increased by 27,200 since January. Friday's BLS report shows that jobs in the mortgage banking/broker sector rose from 455,700 in July to 459,900 in August. In 2003, jobs in the mortgage sector peaked at 457,300. (There is a one-month lag in BLS reporting of mortgage sector employment data. The September data will be released Nov. 5.) Meanwhile, the BLS reported that the economy generated 96,000 new jobs in September, and the unemployment rate was unchanged at 5.4%. The BLS can be found online at http://stats.bls.gov.

An initiative to expand homeownership opportunities for Latino families in California has been launched by Freddie Mac and the California Association of Realtors in conjunction with several other organizations, according to CAR.The goal of the effort is to increase real estate professionals' understanding of "how to reach and serve the Latino homebuyer" and to help Latinos learn about homebuyer assistance programs offered by city, county, and state housing agencies, CAR said. A "major component" of the campaign is a new course developed by Freddie Mac and Chase Home Finance that will be offered through CAR and the National Association of Hispanic Real Estate Professionals to "educate real estate professionals on how to better serve the Latino homebuyer," CAR said. Other participants in the initiative include the League of United Latin American Citizens and the California Housing Finance Agency. CAR can be found online at http://www.car.org.

Craig I. DeRoy has been named president of The First American Corp., a Santa Ana, Calif.-based provider of economic information, including title insurance and mortgage data.Mr. DeRoy, who was most recently senior executive vice president, will succeed Parker S. Kennedy, who will continue as chairman and chief executive officer of First American. Mr. DeRoy began his career as a trial attorney and served a three-year appointment as a deputy chief with a U.S. attorney's office. He later formed First Environmental Review Insurance Co., where he "pioneered a new form of real estate insurance covering certain forms of environmental risk," First American said. The company can be found on the Web at http://www.firstam.com.

As regulators prepare to implement the new Massachusetts predatory-lending law on Nov. 7, emergency regulations are likely to be issued by that date, according to Jim Dougherty, executive director of the Massachusetts Mortgage Association, Wakefield, Mass.These regulations could more clearly define and satisfy Standard and Poor's on the issue of indeterminate liability, he said. Beginning Nov. 7, S&P says it will not permit "high cost home mortgage loans" governed by the Massachusetts Predatory Home Loan Practices Act into its rated structured finance transactions, because purchasers of such loans may be subject to indeterminate liability. "It's too vague in regard to the standards the lender must meet under the law," Mr. Dougherty said. The Massachusetts act has been questioned by many industry insiders who say it fails to provide clear guidance, so that lenders have no way of knowing -- if they refinance a loan, for example -- whether a loan would be considered in the "borrower's interest."

Countrywide Home Loans Inc., Calabasas, Calif., and Brookfield Homes, a homebuilder headquartered in New York and Toronto, have announced the formation of BHI Mortgage under the aegis of Countrywide Mortgage Ventures LLC.The joint venture, based in San Diego, will offer homebuyers in California's Riverside and San Diego counties a variety of loan programs, including zero-downpayment loans and streamlined Fast & Easy loans. Qualified homebuyers who purchase a home built by Brookfield Homes will benefit from the services of a BHI Mortgage consultant who works with a Brookfield Homes sales representative to develop a customized financial package, the companies said. Countrywide can be found online at http://www.countrywide.com, and Brookfield Properties Corp., the parent company of Brookfield Homes, can be found at http://www.brookfieldproperties.com.

AmericasBank, Towson, Md., has reported the acquisition of uvm Mortgage Marketing Inc., a Towson-based mortgage lender.AmericasBank said it will buy certain assets and assume certain liabilities in exchange for an undisclosed amount of cash and stock in AmericasBank Corp., the bank's parent company. Mortgage Marketing will operate as a division of the bank serving the greater Baltimore area, and AmericasBank said the acquisition is expected to more than triple its mortgage banking capacity. Jon Zemarel, Ben Stauffer, and Linda Henritz will join AmericasBank as part of the transaction.

The average 30-year fixed mortgage rate rose to 5.82% for the week ending Oct. 8 from 5.72% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate rose from 5.12% to 5.24%, while the average rate for one-year Treasury-indexed ARMs climbed from 3.97% to 4.08%. Fees and points averaged 0.6 of a point for all three mortgage categories. "The financial market thinks we've passed the 'soft patch' in the economy, which would translate into stronger growth in the coming months," said Amy Crews Cutts, Freddie Mac's deputy chief economist. "Stronger growth means a greater threat of inflation, and that means interest rates will start to rise in response to the threat." A year ago, the average 30-year and 15-year fixed rates were 5.77% and 5.10%, 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.