Originations

Fitch Ratings has downgraded the special servicer rating of Criimi Mae, Rockville, Md., from CSS2-plus to CSS3-plus and its primary servicer rating from CPS2 to CPS2-minus, while affirming its master servicer rating at CMS3.The rating agency said the primary servicer rating downgrade reflects Criimi Mae's "decreased emphasis" on this business line, while the special servicer rating downgrade takes into account new management at the mortgage real estate investment trust, and high employee turnover. Although Fitch regards the new management team as "well experienced," the rating agency said it believes that "the direction and leadership of the company has been significantly altered, essentially creating a new company" that has not yet established itself. In addition, Fitch said employee turnover at Criimi Mae for the 12-month period ending April 2004 was at 50%, with 47% of this occurring "above the administrative level." This rate is "well above" that for other servicers rated by Fitch, the rating agency said. Fitch rates commercial mortgage servicers on a scale of 1 to 4, with 1 being the highest rating. It can be found online at http://www.fitchratings.com.

The National Association of Mortgage Brokers had a "cordial" first meeting with representatives of the Department of Housing and Urban Development over the prospect of a RESPA rule reproposal, according to NAMB president Bob Armbruster.Speaking at the Florida Association of Mortgage Brokers convention in Orlando, Mr. Armbruster said the association is preparing for a second meeting with HUD in a few weeks and, if need be, could even meet directly with HUD Secretary Alphonso Jackson. (Mr. Jackson announced in May that he planned to repropose a rule that would revamp HUD's Real Estate Settlement Procedures Act regulations.) "We are committed to a level playing field" for yield-spread premiums and initial disclosures, Mr. Armbruster said. He said that if HUD does not come back with a rule that the mortgage broker industry likes, the regulators will once again have "a fight on their hands," referring to the successful industry campaign to quash the original proposal.

The average 30-year fixed mortgage rate dropped to 6.01% for the week ending July 9 from 6.21% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate fell from 5.62% to 5.42%, while the average rate for one-year Treasury-indexed ARMs declined from 4.19% to 4.05%. Fees and points averaged 0.6 of a point for all three mortgage categories. "Long-term mortgage rates this week fell to levels equal to those experienced in April, reacting in large part to last Friday's news of less-than-stellar job growth in June," said Frank Nothaft, Freddie Mac's chief economist. "This is good news for those who are still house hunting, as lower rates mean more affordable housing." A year ago, the average 30-year and 15-year fixed rates were 5.40% and 4.75%, respectively, and the average one-year ARM rate was 3.49%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

Cendant Corp., New York, has announced that it will consider strategic options that include the sale of its mortgage origination platform and its mortgage servicing business.However, the company said any transaction would be aimed at preserving "the cross-selling benefits of a 'value circle' that exists between the mortgage business and the company's residential real estate brands and relocation and resettlement services businesses." Henry R. Silverman, chairman, chief executive officer, and president of Cendant, said the company's mortgage business, which is expected to represent "only a fraction" of the company's income this year, "continues to perform in line with our expectations. However, our mortgage banking activities can produce volatility in Cendant's earnings inconsistent with our business model and the remainder of our portfolio." Cendant also announced that it now expects to exceed the high end of its recently announced earnings projection of $0.42-$0.44 per share from continuing operations by $0.02 to $0.03. Cendant can be found online at http://www.cendant.com.

Huntington Capital, a subsidiary of Columbus, Ohio-based Huntington Bancshares, has entered the Federal Housing Administration mortgage niche by launching Huntington/NAC.The new subsidiary will provide mortgage financing for long-term care properties -- including senior housing, assisted living, skilled care, and "critical access" hospitals -- and multifamily properties through the FHA insurance program, Huntington Bancshares said. Financing will be provided to "for-profit" as well as "not-for-profit" borrowers for construction and rehabilitation projects, as well as for refinancings. Huntington/NAC is managed by John Lewis, David Fumi, and Boyd Crall. Mr. Lewis has more than 10 years of experience in the FHA mortgage world, according to Huntington.

Interest rates are rising due to "healthy economic growth" and therefore won't curb the overall strength of the housing market this year, according to the National Association of Realtors.In the association's July real estate outlook, NAR chief economist David Lereah said the unemployment rate should fall to 5.2% by the beginning of next year. "The reason interest rates are higher is that we are in a growing economy rather than dealing with inflationary pressures," Mr. Lereah said. "This is good news, because corporate profits are up 40% from two years ago, so companies are spending and jobs are being created at a strong pace. In the housing markets, this is largely neutralizing the effects of modestly higher interest rates." The NAR economist said the 30-year fixed mortgage rate should reach 6.7% by the fourth quarter. The NAR can be found on the Internet at http://realtor.org.

The Market Composite Index, an overall measure of mortgage applications, jumped from 575.0 to 687.0 on a seasonally adjusted basis during the week ended July 2, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications rose 19.2% on the week but were down 34.1% from the level of a year earlier. The Purchase Index rose from 435.4 to 500.9 on a seasonally adjusted basis, while the Refinance Index climbed from 1386.9 to 1769.7. Refinancings represented 35.8% of total applications, up from 33.4% the previous week, while adjustable-rate mortgages accounted for 34.1%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages fell from 6.21% to 5.96%, and points (including the origination fee) rose from 1.30 to 1.37 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mortgagebankers.org.

The ratings on four classes of COMM 2001-FL4's commercial mortgage pass-through certificates have been lowered by Standard & Poor's Ratings Services.The downgrades were as follows: class D, from BBB to BB-plus; class E, from BB to BB-minus; class K-PS, from B-plus to B; and class L-PS, from B to B-minus. At the same time, S&P raised its ratings on two other classes and affirmed the ratings on six other classes from the same transaction. S&P said the downgrades reflect "the continued stress" experienced by 100 Pine Street, a San Francisco office building securing a $118 million mortgage, $82 million of which is in the pool. S&P can be found online at http://www.standardandpoors.com.

Lorain National Bank, Lorain, Ohio, has announced an agreement to acquire Mortgage One Banc, also of Lorain, for an undisclosed amount of cash.Mortgage One will retain its identity, and all mortgage employees of Lorain National will be retained and either reassigned to other areas of the bank or to Mortgage One, the bank said. Lorain National is the banking subsidiary of LNB Bancorp Inc., which can be found on the Web at http://www.4lnb.com.

KeyBank Real Estate Capital, Cleveland, has acquired American Capital Resource, an Atlanta-based originator and servicer of FHA and USDA multifamily and health care mortgages, in a bid to expand its offerings of permanent financing options.The terms of the deal were not disclosed. The KeyCorp subsidiary said it expects the acquisition to boost its capabilities in the agency finance area -- including in the Fannie Mae Delegated Underwriting and Servicing program and Freddie Mac Program Plus area. E. J. Burke, a KeyBank REC executive vice president, said ACR's Federal Housing Administration lending and servicing capabilities "enhances our ability to deliver value to our multifamily and seniors housing developer clients." ACR is a Ginnie Mae multifamily issuer and an FHA MAP lender, and is also approved by the U.S. Department of Agriculture's Rural Rental Housing Service to provide financing for Section 538 guaranteed loans, KeyCorp said. ACR employees will continue to operate out of their current offices. KeyBank REC can be found online at http://www.keybank.com.

Countrywide Home Loans Inc., Calabasas, Cal. has launched a new radio and television advertising campaign focusing on first-time Hispanic homebuyers in major markets nationwide.Using the tagline "Facilitando Suenos," it is part of the company's "Realize Your Dreams" national branding campaign launched earlier this year. "Rather than merely translate existing English-language advertisements into Spanish, we have created messages that expressly speak to the Hispanic community -- assuaging their anxieties, demystifying any confusion and earning their trust," said Rodolfo Saenz, Countrywide's executive vice president of emerging markets. The campaign will air Monday to Friday through the fall on Univision, Telemundo, Galavision, and CNN en Espanol along with morning and evening newscasts, in addition to three Spanish-language radio spots broadcast in five major Hispanic markets. Countrywide can be found online at http://www.countrywide.com.

The members of the Mortgage Insurance Cos. of America wrote $19.3 billion of new primary mortgage insurance in May, down slightly over 1% from April's $19.4 billion.In May 2003, MICA members wrote $35.4 billion, but those numbers include Radian Guaranty, which dropped its membership in the trade group last July. Application volume, which for the two prior months topped 180,000, slipped to 152,880 in May, back to the level seen at the end of the refinance boom in November 2003. New pool risk written in May was $85.3 million, down from $81.1 million in April. There were 33,928 cures and 39,188 defaults in May, for a cure/default ratio of 86.6%. This is down from 90.6% in April, but a slight increase over May 2003's 81.3%.

Class L of Bear Stearns Commercial Mortgage Securities Inc. commercial mortgage pass-through securities, series 2000-WF1, has been downgraded from B-minus to CCC by Fitch Ratings.In addition, five classes in the deal were upgraded and the ratings on nine other classes were affirmed, Fitch said. The reason for the downgrade is that losses are expected on loans now in special servicing, according to the rating agency. Fitch can be found online at http://www.fitchratings.com.

Nearly three quarters of commercial real estate professionals surveyed by the Bryan Cave law firm in New York say they expect CRE activity to strengthen or stay the same over the next 12 months, according to the law firm.Among that group, equal percentages (35.8%) said they expect CRE activity to strengthen or stay the same, while 26.9% said they expect it to weaken, according to the survey, which was conducted in April and May. Barry C. Ross, a real estate group co-leader with the firm, said the results reveal the respondents to be "optimistic about the coming year, notwithstanding the full price that better properties are commanding." They are concerned, however, about the effect of an increase in interest rates, he said. About half the respondents (51.5%) believe that U.S. commercial real estate is currently overvalued, while a mere 4.5% believe it to be undervalued. Multifamily properties are viewed as the investment property type of choice by 26.1% of the respondents.

In a bit of irony, on the same day the Federal Reserve Board hiked its benchmark target rate by 25 basis points, the Federal Home Loan Bank of San Francisco announced that the Eleventh Federal Home Loan District Cost of Funds Index has reached a new low.For May, COFI was 1.708%, down 10 basis points from April's 1.802%. The Fed's action will have some effect on COFI, as it is a weighted average of the interest paid for money used to originate mortgages by thrifts in Arizona, California, and Nevada. However, because of the weighted average feature, the effect will not be fully felt by borrowers whose adjustable-rate mortgage loans are indexed to COFI until three to six months down the line.

The average 30-year fixed mortgage rate fell to 6.21% for the week ending July 2 from 6.25% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate fell from 5.64% to 5.62%, while the average rate for one-year Treasury-indexed ARMs rose from 4.13% to 4.19%. Fees and points averaged 0.6 of a point for fixed-rate mortgages and 0.7 of a point for ARMs. "As expected, long-term mortgage rates were relatively unaffected by the Fed's recent actions to pre-empt any future inflationary trend," said Frank Nothaft, Freddie Mac's chief economist. "And, as also expected, short-term mortgage rates moved upward in response to those same actions." A year ago, the average 30-year and 15-year fixed rates were 5.24% and 4.63%, respectively, and the average one-year ARM rate was 3.45%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

Class O of Morgan Stanley Capital I Inc.'s commercial mortgage pass-through certificates, series 1999-LIFE 1, has been downgraded from CCC to CC by Fitch Ratings.The rating agency also upgraded five classes in the deal and affirmed the ratings on 10 other classes. Fitch attributed the downgrade to expected losses on the one loan in special servicing. The loan (representing 1.8% of the pool) is secured by three industrial buildings in Detroit and Warren, Mich., and is currently in foreclosure. The loan transferred to special servicing as a result of the bankruptcy filing of a major tenant, Fitch said. "All properties are 100% vacant," the rating agency said. "The special servicer is reviewing alternative workout solutions and has ordered an updated appraisal." Fitch can be found online at http://www.fitchratings.com.

Trizec Properties, Chicago, has obtained a $750 million unsecured credit facility from a syndicate of 26 lenders, the real estate investment trust has reported.The three-year facility, which comes with a one-year extension option, consists of a $600 million revolver and a $150 million term loan, Trizec said. Interest-only payments are required on the facility, based upon Trizec's debt profile. The office REIT said the initial interest rate on the facility is expected to be 150 basis points above the London interbank offered rate. The capacity of the facility, which replaces a facility that was secured by nine properties, could also be increased to $1 billion. The facility was co-arranged by Deutsche Bank and Bank of America.

The Fraternal Order of Police has signed an agreement with Nationwide Advantage Mortgage Co., Des Moines, Iowa, for the latter to provide mortgage services to the group's over 320,000 members across the country.Chuck Canterbury, FOP president, said, "law enforcement officers are an especially financially savvy, information-conscious group. Access to home purchasing programs is very important to our members because many of them have limited time to apply for a mortgage and ensue the homebuying process." NAMC offers approvals within 10 minutes. Its trademark is "speed, simplicity and savings." The company is a subsidiary of Nationwide Mutual Insurance Co., Columbus, Ohio.

Campus MBA, the educational arm of the Mortgage Bankers Association, is teaming up with Option One Mortgage Corp., a subprime wholesaler in Irvine, Calif., to launch a new mortgage broker and originator initiative called Creating New Customers.Its goal is to teach brokers and other originators how to lead customer workshops in an effort to improve financial literacy and enhance relationships. "Creating New Customers has a dual purpose leading toward one unified goal," said Dan Thoms, the MBA's vice president of education and business development. "By educating consumers on the homebuying process and enhancing the originator's knowledge of consumer concerns, the program will help more Americans across the country realize the dream of homeownership." The MBA can be found online at http://www.mortgagebankers.org, and Option One can be found at http://www.optiononemortgage.com.