Originations

The average 30-year fixed mortgage rate rose to 6.32% for the week ending May 28 from 6.30% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate rose from 5.67% to 5.69%, while the average rate for one-year Treasury-indexed ARMs fell from 3.99% to 3.87%. Fees and points averaged 0.6 of a point for all three mortgage categories. "Although new-home sales fell in April, existing-home sales rose to the second-highest level on record as homebuyers rushed to close in the face of low, but surely rising, mortgage rates," said Frank Nothaft, Freddie Mac's chief economist. "Current mortgage rates are now a full point above where they were last year, and almost half a point higher than they were last month." A year ago, the average 30-year and 15-year fixed rates were 5.31% and 4.73%, respectively, and the average one-year ARM rate was 3.63%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

Commercial and multifamily mortgage originations totaled $20.9 billion in the first quarter, up 2.8% from the volume recorded a year earlier, according to a quarterly survey by the Mortgage Bankers Association.The total fell $17 billion short of the commercial/MF originations reported for the fourth quarter, but the MBA said this reflects "the industry's usual push to finalize deals" before the end of the year. "The first-quarter origination figures show the continued impact of a steady supply of capital -- and correspondingly low interest rates -- to the commercial and multifamily mortgage markets," said MBA chief economist Doug Duncan. Though rising interest rates and high vacancy rates in some sectors would normally presage a slowdown in originations, the current economic expansion is likely to cause originations to "remain relatively stable," he said. The MBA reported that investment by commercial mortgage-backed security conduits represented $7.1 billion of loan originations in the first quarter, followed by life insurance companies, $3.9 billion; commercial banks, $3.7 billion; originations for other investors, $2.6 billion; and Fannie Mae and Freddie Mac, $2.5 billion. The group can be found online at http://www.mortgagebankers.org.

Mortgage originations will average close to $3 trillion a year from 2004 to 2013, according to the chief economists of three trade groups and two secondary market agencies."America's families will need 125 million new mortgage loans for home purchase or refinancing totaling $27 trillion in mortgage originations," Freddie Mac chief economist Frank Nothaft said at a press conference. Meanwhile, mortgage debt will grow at a rate of 8.25% a year, he said, which is close to the growth rate experienced over the last decade. The chief economists from Freddie, Fannie Mae, the National Association of Realtors, the National Association of Home Builders, and the Independent Community Bankers of America collaborated on the report, which is called "America's Home Forecast: The Next Decade for Housing and Mortgage Finance." The bullish report, sponsored by the Homeownership Alliance, predicts that the homeownership rate will exceed 70% by 2013.

Fidelity National Financial Inc., Jacksonville, Fla., has announced a filing with the Securities and Exchange Commission relating to a proposed spinoff of its noninsurance operations into a separately traded public company.The new company, Fidelity National Information Services Inc., would issue common stock in an initial public offering. FNF said it plans to later distribute all its ownership interest in the new company in a tax-free spinoff through a special dividend to FNF common stockholders. FNF chairman and chief executive officer William P. Foley II said the spinoff will allow FNF to better position its financial institution processing, outsourcing, and real estate information businesses and "provide a separate, publicly traded currency that can be used in its business, including helping to finance future acquisitions." FNF will focus on title insurance and its other specialty insurance businesses, he said. The new company will consist of three main segments: Financial Institution Software and Services, including FNF's mortgage processing business; Lender Outsourcing Solutions; and Information Products and Services. Mr. Foley will become chairman and CEO of the new company. He will remain chairman of FNF, and Randy Quirk, now president, will assume the role of CEO. FNF can be found online at http://www.fnf.com.

A faith-based campaign to help more Rhode Island families become first-time homeowners has been announced by Sen. Lincoln Chafee, R-R.I., the Faith Community Coalition for Homeownership, the Cathedral of Life Community Development Corp., Wells Fargo Home Mortgage, and Freddie Mac.Freddie Mac said the Faith Community Coalition for Homeownership will identify potential homeowners and work with the Consumer Credit Counseling Services of Southern New England and other organizations to ensure that participants receive in-depth pre- and post-purchase homeownership counseling. "In addition, Wells Fargo Home Mortgage will provide flexible, low-downpayment mortgages that Freddie Mac expects to purchase, in order to provide a steady flow of mortgage credit for additional borrowers," the government-sponsored enterprise said.

The Market Composite Index, an overall measure of mortgage applications, fell from 654.1 to 632.4 on a seasonally adjusted basis during the week ended May 21, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications fell 3.4% on the week and were down 59.1% from the level of a year earlier. The Purchase Index declined from 454.2 to 449.8 on a seasonally adjusted basis, while the Refinance Index fell from 1816.9 to 1694.9. Refinancings represented 36.2% of total applications, down from 37.4% the previous week, while adjustable-rate mortgages accounted for 34.6%, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages rose from 6.21% to 6.26%, and points (including the origination fee) fell from 1.39 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.

New-home sales dropped 11.8% in April but remained above the 1 million mark for the 14th consecutive month.The U.S. Census Bureau reported that the sales of new single-family homes fell to a seasonally adjusted annual rate of 1.09 million in April from 1.24 million in March. The March number was revised upward by 6.4%. Mortgage Bankers Association chief economist Doug Duncan noted that the new-home sales numbers are very strong and very volatile and said he wouldn't jump to any conclusions based on one month's data. He pointed out that new-home sales are ahead of last year's pace by 6% and that the MBA's index of mortgage purchase applications hit a monthly record of 458 in April. "Our mortgage application data, which are a really good leading indicator of sales, says sales are remaining very strong," he said. He said he expects sales to slow later this summer, but he is forecasting that 2004 sales will come in slightly above last year's record of 1.09 million in new-home sales.

Class I of Chase Commercial Mortgage Securities Corp.'s mortgage pass-through certificates, series 1997-2, has been downgraded from B-minus to CCC by Fitch Ratings.Fitch also upgraded two classes in the deal and affirmed the ratings on seven other classes. The rating agency attributed the downgrade to expected losses on several specially serviced loans in the pool. Fitch can be found on the Web at http://www.fitchratings.com.

Related Capital, a subsidiary of New York-based CharterMac, has closed a $225 million corporate tax credit fund."The closing of this fund illustrates the continued investor demand for investments in Low-Income Housing Tax Credits," said Marc D. Schnitzer, Related's chief executive officer. "This fund alone represents almost 25% of Related Capital's budgeted volume for the year." The fund, in which seven institutional investors have invested, represents LIHTC investments in more than 30 properties in 15 states nationwide, Charter Mac said. So far this year, Related has raised over $359 million in gross equity, which is 53% ahead of the amount raised in the same period of 2003, according to the company. This is the largest fund of its kind ever closed by Related, Charter Mac said.

Fannie Mae has introduced the "MyCommunityMortgage" product, previously available to housing finance agencies, as a flexible-terms supplement to current mortgage revenue bond programs for low- to moderate-income borrowers and communities offered by some HFAs.Announced at the National Council of State Housing Agencies Spring Workshops in Portland, Ore., MCM is designed for the unique homebuying needs of underserved borrowers. "As housing finance agencies develop strategies to extend their reach to more first-time homebuyers, many are discovering that penetrating minority, new immigrant, and other underserved markets is a core element of future growth and business success," said Julie Gould, vice president of community lending at Fannie Mae. MCM allows HFAs to provide borrowers with 100% loan-to-value options, the possibility to contribute as little as $500 in personal funds, flexible income sources, nontraditional credit histories, and other flexible approval criteria.

First American Title Insurance Co., Santa Ana, Calif., has announced an agreement to acquire Columbian National Title Co., Topeka, Kan., and its affiliated title companies from McCaffree Financial Corp.The terms of the deal were not disclosed. Columbia National, a regional underwriter, is a licensed insurer in 11 states, including Kansas, Texas, New Mexico, Arizona, and Montana, First American said. The affiliates of Columbian National are Columbian Title of Johnson City Inc.; Columbian Title of Kansas City Inc.; Columbian Title of Topeka Inc.; and Columbian Title of Wichita Inc. First American Title is the largest subsidiary of First American Corp., which can be found on the Web at http://www.firstam.com.

The PMI Group, San Francisco, long the No. 2-ranked mortgage insurance company in the nation, is now No. 1.According to mortgage insurance company rankings compiled by National Mortgage News and the Quarterly Data Report, PMI wrote $12.68 billion in new policies during the first quarter, edging out MGIC Investment Corp., Milwaukee, which insured $12.49 billion. During the quarter, PMI wrote $3.29 billion in bulk insurance deals to MGIC's $1.64 billion. Some MI firms have been cutting back on bulk deals because the profit margins on these arrangements can be razor thin. As of MortgageWire's deadline late Monday, PMI and MGIC could not be reached for comment on the rankings. MGIC is still the nation's No. 1 MI in terms of policies-in-force, with $185 billion. PMI is ranked second, with $134 billion.

Genworth Financial, the parent company of G.E. Mortgage Insurance, Raleigh, N.C., went public Tuesday, but at a price several dollars short of what it hoped for.In trading midday Tuesday, Genworth Financial stood at $19.28. Underwriters, led by Morgan Stanley Dean Witter, forecast an offering price of $21 to $23 a share. According to rankings compiled by National Mortgage News, GEMI has been losing market share for years. In the first quarter, it ranked sixth out of seven mortgage insurance firms in terms of new policies written. However, it ranks fourth in terms of policies-in-force and continues to post strong profits. Genworth represents a spinoff of GE's life and mortgage insurance units. GE will initially retain a 30% stake in Genworth, but then hopes to divest itself of the entire unit. At 145 million shares, the initial public offering will raise $2.83 billion. To date, it is the largest IPO of the year.

Merrill Lynch Credit Corp., New York, has announced the introduction of the Blended-Rate mortgage, an adjustable-rate loan that it says combines the lower rates of an ARM with the lower risk of fixed-rate mortgages.The Blended-Rate mortgage helps diversify interest-rate risk by combining a fixed rate and an adjustable rate during an initial period of three, five, or seven years, Merrill Lynch said. The blended rate rises or falls half as much as a traditional adjustable-rate mortgage, providing greater protection against rising interest rates, the company said. The loan includes interest-only payments during the blended period, and rates are adjusted semiannually based on the six-month London interbank offered rate. After the blended period, the loan is amortized and the rate continues to adjust semiannually based on the six-month LIBOR plus 2%, Merrill Lynch said. "Until now, homeowners have had two basic choices -- paying for the security of a traditional fixed-rate mortgage or taking on more risk to benefit from lower rates and lower monthly payments with ARMs," said Larry Washington, chairman and chief executive officer of Merrill Lynch Credit. "The flexibility of the Blended-Rate mortgage can offer clients both lower rates and lower risk." The company can be found online at http://www.ml.com.

Existing-home sales rose 2.5% in April to the second-highest monthly rate ever as the expectation of rising mortgage rates contributes to a very strong spring homebuying season.The National Association of Realtors reported that sales of previously owned homes rose from a seasonally adjusted annual rate of 6.48 million units in March to 6.64 million in April. (The previous record rate of 6.68 million was set in September 2003.) NAR chief economist David Lereah told reporters that the strong sales number probably reflects "jumping" into the market by potential homebuyers to take advantage of low rates before the Federal Reserve Board starts raising interest rates. He said he expects home sales to start slowing in June but remain at healthy levels because of strong economic growth. He noted, however, that the inventory of unsold homes jumped 9.4% (from the March level) to 2.57 million in April, which was the second-highest number since August 1990. "At the current sales pace, it is not a problem," Mr. Lereah said. But it bears watching "if the sales rate slows appreciably," he added.

The National Association of Home Builders is seeing signs that the slump is over for the multifamily sector, the Washington-based trade association has reported.Citing its Multifamily Market Index, the NAHB said the component that gauges current market conditions for for-sale units jumped to 64.0 in the first quarter, up from 46.7 in the first quarter of 2003. The indexes gauging current market conditions for low-income and market-rate apartments both were "well above" their levels of a year earlier, at 49.4 and 48.1, respectively. The MMI is based on a quarterly survey of multifamily builders and property owners. "The evolving upswing in the job creation numbers bodes well for the multifamily sector," said David Seiders, the NAHB's chief economist. "Since job creation often leads to new household formation -- and new households often tend to be renters or first-time condo buyers -- it looks like there are better days ahead for the multifamily segment of the housing market." The NAHB can be found online at http://www.nahb.com.

Housing affordability now ranks third among voter concerns and is likely to be an issue for about two-thirds of American voters in the November election, according to a survey by the National Association of Realtors.The survey found that 81% of voters would like to see government place a higher priority on making housing more affordable, and two out of three said they would be more likely to vote for a candidate who works to make housing more affordable, the NAR reported. "Our latest survey found that, despite all of the other concerns America faces, affordable housing ranks as voters' third-greatest concern, just behind health care and the economy," said NAR president Walt McDonald. "Moreover, our survey found that the issue is growing in importance. More voters are worried about the cost of housing today and what it means for their families and their communities than they were just nine months ago." The NAR can be found on the Internet at http://realtor.org.

Bradford Mortgage Co., Winston-Salem, N.C., has acquired the mortgage division of The Scottish Bank, a community bank based in Charlotte, N.C., for an undisclosed amount.The division will now operate as The Scottish Bank Mortgage Co., and will remain in Charlotte. "This acquisition was a logical and strategic expansion of Bradford Mortgage Co.," said Brad Church, president of Bradford Mortgage. "We know each other's companies, and our culture and values, including our customer base, are similar." Mr. Church said Mecklenburg County, where Charlotte is located, is "the most dynamic, fastest-growing region" in the state and that the acquisition "will give us excellent entree into this market." As part of the deal, the privately held Bradford Mortgage said it will sell a minority interest to The Scottish Bank.

The ratings on the senior debt of Prime Property Fund and Prime Property Funding II Inc. have been lowered from A2 to A3 by Moody's Investors Service.The rating outlook is stable. Prime Property Funding II, a subsidiary of The Equitable Life Assurance Society of the United States, was created to issue debt securities and to assign the proceeds to Prime Property Fund in exchange for a funding agreement, Moody's said. The rating agency attributed the downgrades to three considerations: "debt protection measures, including high leverage, are more consistent with the A3 rating; risks associated with the [conversion to a private real estate investment trust] are material, although the fund's management is taking steps to minimize such risks; and the fund's ability to substantially delever may prove difficult as the fund pursues a more aggressive growth strategy over the next two years." Moody's can be found online at http://www.moodys.com.

Pressley A. Ridgill has been named president of FNB Southeast, Greensboro, N.C., the regional banking organization of FNB Financial Services Corp.Mr. Ridgill, previously an executive vice president and chief operating officer of the company, has also been elected to the board of directors of FNB Financial, the parent company said. As president of FNB Southeast, Mr. Ridgill will have direct supervision of FNB Southeast Mortgage Corp., a subsidiary. Ernest J. Sewell will continue as president and chief executive officer of FNB Financial and CEO of FNB Southeast.