Originations

Commercial and multifamily mortgage debt outstanding increased 2.9% to $2.17 trillion in the second quarter, according to the Mortgage Bankers Association."The second quarter marks the greatest single-quarter increase in the amount of commercial/multifamily debt," said Doug Duncan, the MBA's chief economist. "With moderate economic growth, low delinquencies, and moderate interest rate increases, the trend is likely to continue." Commercial banks hold the largest share of these mortgages, at $919 billion (42% of the total), the MBA said. (This includes the category of "commercial and industrial" loans that have commercial and multifamily property as collateral.) Commercial mortgage-backed securities issuers hold $392 billion (18%) of the total, followed by life insurance companies, which hold $250 billion (11.5%) of the debt. Government-sponsored enterprises hold $116 billion of the debt in the form of multifamily mortgages that back the securities they issue and also hold $49 billion of the debt in their own portfolios, for a total share of 7.6%. The MBA can be found online at http://www.mortgagebankers.org.

A record number of applications for mortgage broker registrations will be made in 2004, Kenneth Bielemeier, deputy superintendent with the Banking Department, has told the New York Association of Mortgage Brokers Annual Convention in Melville, N.Y.Last year, the department approved 400; right now the department has 200 applications pending. Mr. Bielemeier told the crowd that for every application that is approved, the department is getting three new ones. However, the regulators are worried about the number of convicted felons looking to work in the industry. Mr. Bielemeier said the department is processing requests for 200 people who have felony convictions. The large number of requests is forcing the department to establish a Felon Processing Unit. Furthermore, many of the former felons were convicted of financial fraud, not crimes such as driving while intoxicated. The department looks at hiring past felons on a case-by-case basis, and wants to know from the employer what safeguards are being put in place, Mr. Bielemeier said.

National Association of Mortgage Brokers president Bob Armbruster has written a letter to the Department of Housing and Urban Development asking that mortgage brokers be allowed to originate FHA loans using a surety bond instead of having to meet a net-worth requirement.He told the New York Association of Mortgage Brokers annual convention in Melville, N.Y., that mortgage brokers now originate 38% of Federal Housing Administration loans. The change could increase the market share for brokers to 60%. Mr. Armbruster also announced that the NAMB will become a self-managed organization starting in January 2006. At the same session, Catherine T. Nolan, the newly appointed chairwoman of the New York State Assembly Banking committee, said, "I hope we have a dialog. It is important for me to understand what you do and how you do it." Ms. Nolan said she and other politicians are not experts on mortgage lending, but that "I hope to learn from you." The NAMB can be found online at http://www.namb.org.

A new advertising campaign tied to Freddie Mac's "Don't Borrow Trouble" initiative has been launched in North Philadelphia and other target neighborhoods to help families avoid falling prey to unscrupulous lending practices.Freddie Mac announced the new ad campaign in Philadelphia at its second annual Don't Borrow Trouble summit in conjunction with Philadelphia Mayor John F. Street, Pennsylvania Secretary of Banking A. William Schenck, and officials from Citizens Bank. The October ad blitz, called "Protected by Knowledge," will include billboards on buses, subways, and elevated cars, ads in community newspapers, and a door-to-door campaign in areas hit hard by predatory lenders, Freddie Mac said. Secretary Schenck summed up the message of the campaign: "If a loan comes looking for you, don't do it. If you have questions, don't sign it." Freddie Mac began launching local "Don't Borrow Trouble" efforts in 2000, and Philadelphia's began in June 2002. Freddie Mac can be found online at http://www.freddiemac.com.

Sterling Testing Systems Inc., an employment screening services company based in New York, has announced the acquisition of the primary assets and customers of Automated Information Services Inc., a reseller of mortgage credit reports, and the formation of a new subsidiary to market mortgage credit reporting products.The terms of the deal were not disclosed. The new subsidiary, Sterling Credit Screening Inc., will market credit reports to mortgage lenders, mortgage brokers, banks, and credit unions, Sterling said. AIS's customer service and operations staff will join Sterling Credit Screening in New York. The companies can be found on the Web at http://www.sterlingtesting.com and http://www.automatedinfo.com.

The average 30-year fixed mortgage rate rose to 5.72% for the week ending Oct. 1 from 5.70% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate rose from 5.10% to 5.12%, while the average rate for one-year Treasury-indexed ARMs declined from 4.00% to 3.97%. Fees and points averaged 0.6 of a point for 30-year fixed-rate mortgages and 0.6 of a point for ARMs and 15-year FRMs. "Mortgage rates didn't move much this week, keeping us on target with industry forecasts for the year," said Frank Nothaft, Freddie Mac's chief economist. "Our forecast is for the 30-year fixed-rate mortgage rate to remain below 6% for the rest of the year and not much higher than that for 2005." A year ago, the average 30-year and 15-year fixed rates were 5.98% and 5.30%, 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.

Class B-8 of DLJ Commercial Mortgage Corp. commercial mortgage pass-through certificates, series 1999-CG1, has been downgraded from B-minus to CCC by Fitch Ratings.In addition, Fitch affirmed the ratings on 13 other classes in the deal. The rating agency attributed the downgrade to increased loss expectations for two specially serviced loans, one on a limited-service hotel in Metairie, La., and the other on a mall in Roanoke Rapids, N.C. The hotel is under contract for sale at a price that indicates "a significant loss," while the mall "continues to compete unfavorably with a nearby Wal-Mart Supercenter," Fitch said. The rating agency can be found online at http://www.fitchratings.com.

The Market Composite Index, an overall measure of mortgage applications, rose from 690.7 to 724.7 on a seasonally adjusted basis during the week ended Sept. 24, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications climbed 4.6% on the week and were up 2.1% from the level of a year earlier. The Purchase Index rose from 456.6 to 469.1 on a seasonally adjusted basis, while the Refinance Index climbed from 2052.5 to 2211.1. Refinancings represented 45.9% of total applications, up from 44.5% the previous week, while adjustable-rate mortgages accounted for 32.5%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages fell from 5.66% to 5.64%, and points (including the origination fee) increased from 1.29 to 1.35, for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mortgagebankers.org.

InterFirst Wholesale Mortgage Lending, Ann Arbor, Mich., has reported that an Internet-based survey of mortgage brokers conducted by a consulting firm found "a high level" of broker satisfaction with InterFirst.In the first of a planned quarterly series of surveys, InterFirst said the SatisfactionFirst broker satisfaction survey gave the company a satisfaction rating of 77 out of 100, using the same methodology employed by the American Customer Satisfaction Index. "At a score of 77, InterFirst scores higher among its broker customer base than the mortgage banking industry does as a whole with its customers (69), and, in fact, better than financial services generally as measured by the ACSI (74)," said Rodger Park, the lead mortgage industry researcher for the CFI Group Inc., which conducted the survey.

AmNet Mortgage Inc., San Diego, has announced that the listing of its common stock is moving from the American Stock Exchange to the NASDAQ National Market System.The shares will begin trading on NASDAQ under the stock's new symbol, AMNT, on Sept. 29, AmNet said. Meanwhile, the stock will continue to trade on Amex until the move is completed. AmNet, the parent company of American Mortgage Network, can be found on the Web at http://www.amnetmortgage.com.

Essex Property Trust, Palo Alto, Calif., has reported the closing of its Essex Apartment Value Fund with an equity commitment of $265.9 million from eight institutional investors, including Essex.The fund will use debt financing of about 65% of the estimated value of the underlying real estate, allowing it to invest up to $750 million in multifamily properties in some targeted West Coast markets, according to the real estate investment trust. The fund will lean toward investment opportunities in Seattle and the San Francisco Bay Area. Keith R. Guericke, Essex's president and chief executive officer, said seven of the nine investors in Essex Fund I, including Essex, are participating in the second Essex apartment fund. The fund's objective is "to add value by identifying and acquiring assets in markets with high rental growth potential and then using the company's development, redevelopment, and asset management capabilities to add value," Essex said.

Marie Head has been named president and chief executive officer of Prudential Huntoon Paige, the FHA lending group of Prudential Mortgage Capital Co., Newark, N.J.Ms. Head joined Prudential in 2000 via its acquisition of WMF Huntoon Paige Associates, where she was senior vice president for Federal Housing Administration loan production in the South. She previously worked for the Department of Housing and Urban Development for 20 years, including a stint as HUD's multifamily production chief, the company said. Prudential Mortgage Capital, the commercial mortgage lending business of Prudential Financial Inc., can be found online at http://www.prudential.com/mortgagecapital.

Classes H-1 and H-2 of Criimi Mae Commercial Mortgage Trust series 1998-C1 have been downgraded from B to B-minus by Standard & Poor's Ratings Services, Criimi Mae has reported.The company said S&P has also upgraded eight classes of the series and affirmed the ratings on two classes. Criimi Mae can be found online at http://www.criimimaeinc.com.

The American Land Title Insurance Association, Washington, contends that that 48.8 million homeowners are at risk because they lack an owner's title insurance policy.Title insurance is sold in two segments -- one that protects the lender, and another that protects the homeowner. Citing U.S. Census Bureau homeownership data, ALTA says 40% of homeowners lack an owner's policy. "It is standard procedure in a home purchase or refinance transaction for the lender to require a loan policy to cover the mortgage loan," said James Maher, executive vice president of ALTA. "An owner's policy, which is optional in many states, covers the homeowner's investment, such as their downpayment and equity up to the coverage limit. Unfortunately, many homeowners either don't know about it or don't think they need it, leaving them vulnerable." ALTA provides three situations in which it says an owner's policy would help the property owner: fraudulent property sales, conflicting wills (or no will), and missing or unknown heirs. ALTA can be found on the Web at http://www.alta.org.

The Schiffrin & Barroway law firm, Bala Cynwyd, Pa., has announced the filing of a shareholder lawsuit on behalf of shareholders who bought shares of New York Community Bancorp between June 27, 2003, and May 9, 2004.The firm is alleging that the Westbury, N.Y.-based thrift, as well as Joseph R. Ficalora, its president and chief executive officer, and Michael P. Puorro, its chief financial officer, have violated aspects of the Securities Exchange Act by failing to disclose certain adverse facts and misrepresenting certain facts. The suit alleges that the defendants manipulated the company's financial results through "leveraged growth funded by short term funding" in order to appear more attractive for potential merger deals. It also alleges that the company's projections about growth and interest rate sensitivity did not have any reasonable basis when made, and that its financial results were "materially inflated at all relevant times." A spokesman for Abernathy McGregor, NYCB's public relations representative, told MortgageWire that the allegations "are without merit, and the company will defend itself vigorously in court." Another law firm, Schatz & Nobel, has also initiated a similar shareholder lawsuit against NYCB, the spokesman said.

Freddie Mac has entered into its first delegated underwriting arrangement, which will allow GMAC Commercial Mortgage Corp. more flexibility in underwriting multifamily properties with tax-credit financing."We are experimenting with a delegated model, whereby we delegate certain underwriting decisions to the seller/servicer in exchange for some risk sharing," said Freddie Mac vice president Mitchell Kiffe. Freddie officials declined to provide any specifics about the risk-sharing agreement. Currently, Freddie re-underwrites loans made by its multifamily lenders before purchasing the loans. Under delegated underwriting, Horsham, Pa.-based GMAC will originate and underwrite loans to Freddie's standards, close the loans, and sell them to Freddie Mac. "Our new delegated underwriting initiative for tax-credit debt will complement our existing prior-approval program and enable us to support an increase in the stock of affordable apartments," said Freddie senior vice president Adrian Corbiere.

New single-family home sales jumped 9.48% in August as lower mortgage rates brought more homebuyers into the market.The U.S. Census Bureau reported that new-home sales rose to a seasonally adjusted annual rate of 1.18 million in August from 1.08 million in July. Michael Carliner, an economist at the National Association of Home Builders, said lower mortgage rates had some impact, but he noted that new-home sales have been above 1.1 million since the third quarter of 2003. Sales are currently 10% ahead of last year's record pace. "It is almost certain" that this will be a record year, Mr. Carliner said.

Municipal Mortgage & Equity, Baltimore, has revised downward its net income and earnings per share for the three months ended March 31, 2004, and the six months ended June 30, 2004, citing "the GAAP effect of $3.0 million in deferred compensations expense which had not previously been recorded."For the three months ended March 31, MuniMae is now reporting a net loss of $1.3 million ($0.04 per share), down from the previously reported net income of $1.2 million ($0.04 per share). For the six months ended June 30, the company's net income has been revised to $9.9 million ($0.29 per share), from the previously reported $12.4 million ($0.37 per share). MuniMae had entered into a number of employment agreements with its senior executives in the first quarter, including one for deferred payment compensation totaling $3 million with its chairman and chief executive officer, who is retiring June 30, 2005, according to the company. The discounted value of this payment is reflected as a compensation expense for the three-month and six-month periods for which the revisions have been made. "The failure to timely record this expense was an oversight due to inadequate internal communications at the time the contract was executed," MuniMae said.

A partnership sponsored by Robert M. Bass has announced the formation of Oak Hill REIT Management LLC in conjunction with Jon Fosheim and John Herold, who have been named chief executive officer and chief operating officer, respectively, of the new firm.The firm will trade the capital of its sponsors and operating principals in various investment strategies. Mr. Fosheim and Mr. Herold were most recently associated with Green Street Advisors Inc., a research and consulting firm focused on publicly traded real estate securities. Mr. Fosheim was co-founder and co-CEO of Green Street, and Mr. Herold was its senior analyst responsible for strip retail and manufactured housing real estate investment trusts.

CitiMortgage has announced a $15 billion commitment to provide affordable housing to low- and moderate-income, minority, and underserved families in greater metropolitan Chicago through the end of the decade.CitiMortgage, Citigroup's residential mortgage lending business, said the pledge was made in connection with its Opportunities Within Neighborhoods program, which is part of Citi's broader $200 billion commitment to affordable housing through 2010. The announcement came at the opening session of the city of Chicago's Restoring the Walls - A Call to Faith and Action conference. More than 2,000 faith-based community leaders attended the conference, CitiMortgage said. The company can be found online at http://www.citimortgage.com.