Originations

The Market Composite Index, an overall measure of mortgage applications, fell from 1114.9 to 1091.3 on a seasonally adjusted basis during the week ended March 26, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications fell 2.2% on the week and were down 12.6% from the level of a year earlier. The Purchase Index declined from 448.9 to 443.8 on a seasonally adjusted basis, while the Refinance Index fell from 4988.7 to 4857.6. Refinancings represented 62.8% of total applications, down from 63.1% the previous week, while adjustable-rate mortgages accounted for 27.5%. The average contract interest rate for 30-year fixed-rate mortgages rose from 5.38% to 5.49%, and points (including the origination fee) rose from 1.24 to 1.29 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mortgagebankers.org.

Fannie Mae has named 24 new members to its 44-member National Advisory Council.The National Advisory Council includes mortgage bankers, commercial bankers, investment banking executives, real estate agents, homebuilders, government and community leaders, housing authority officials, and representatives of consumer groups. It meets three times a year with Fannie Mae's senior management to discuss "the challenges and opportunities" facing the government-sponsored enterprise and the housing finance system, the GSE said. The chairman of the council this year is James R. "Bobby" Rayburn, president of Rayburn and Associates LLC, Madison, Miss. Fannie Mae can be found online at http://www.fanniemae.com.

Luminent Mortgage Capital Inc., San Francisco, has priced a public offering of 12 million shares of common stock at $14 per share.The company was formed in April 2003 to invest primarily in agency and other highly rated single-family mortgage-backed securities, Luminent said. It is externally managed and advised by Seneca Capital Management LLC and organized as a real estate investment trust. Friedman, Billings, Ramsey & Co. is the managing underwriter of the offering, and the co-managers are Credit Suisse First Boston LLC, JMP Securities LLC, and Flagstone Securities LLC. The REIT can be found online at http://www.luminentcapital.com.

Stewart Title Co., Houston, has announced the acquisition of a majority interest in Stewart Title of Pueblo, Colo., for an undisclosed amount.Key management and staff will remain with the office, Stewart Title said. Jeff Fogg, president of Stewart Title of Pueblo, said the main reason for the step is "to allow our associates to enjoy the full range of company benefits offered by Stewart Title." Stewart Title is a wholly owned subsidiary of Stewart Information Services Corp., which can be found online at http://www.stewart.com. Stewart Title of Pueblo can be found at http://www.stewartpueblo.com.

Ed Fritsch, president and chief operating officer of Highwoods Properties Inc., Raleigh, N.C., has been elected to succeed Ron Gibson as chief executive officer of the real estate investment trust.Mr. Gibson, a founder of Highwoods, plans to retire as CEO on June 30, but will continue to serve on the company's board of directors. Highwoods also announced that Mike Harris, senior regional vice president, will assume the post of executive vice president and COO when the succession takes effect on June 30. The REIT can be found on the Web at http://www.highwoods.com.

The Mills Corp., Arlington, Va., is transferring a 50% joint venture interest in Opry Mills to Kan Am Grund, a German real estate fund operator, for $158.1 million.This includes the transfer of $89.3 million of "allocable joint venture debt," the real estate investment trust said. Under the terms of the joint venture, both parties are to receive "an unguaranteed 9% preference on equity" on the 1.2 million-square-foot Nashville, Tenn., retail property, Mills said. The REIT's interest and cash flows in the property will "be increased disproportionately" after payment of the 9% preference. This is Kan Am Grund's second joint venture investment in a stabilized property with Mills, the REIT said. Mills expects to use the proceeds from the transaction partly to fund its development pipeline and to pay down its line of credit. WestWind Capital Partners completed the transaction on behalf of Kan Am Grund.

Equity Office Properties Trust, Chicago, has issued $1 billion of 4.75% senior unsecured notes due March 2014, with an effective interest rate of 5.54%.The office real estate investment trust said it has entered into $1 billion of fixed-to-floating interest rate swaps due March 2014. As a result of these swaps, the effective rate on the notes, which are guaranteed by EOPT, is 53 basis points over the London interbank offered rate, the REIT said. The net cash proceeds from the offering of approximately $990.4 million have been used to repay balances under EOPT's $1 billion revolving credit facility and to settle two interest rate swaps. A short-term credit facility that EOPT entered into last year has also been canceled.

Shurgard Storage Centers Inc., Seattle, has announced that certain accounting adjustments have been made that will require a restatement of historical financial statements and will prevent the company from filing its Form 10-K for 2003 by March 30.Shurgard said its new auditors have made "significant progress" since mid-January toward completing an audit of the company's 2003 financial statements and re-audits for 2002 and 2001. The company said its goal is to complete the audit in time to permit the filing of its Form 10-K for 2003 in April. "Although the audits are ongoing, and could result in additional adjustments, the company currently expects to restate its historical financial statements to take a full valuation allowance for certain deferred tax assets, to account for its tax retention operating leases (referred to as the 'TROLs') on-balance-sheet, and to consolidate certain domestic development joint ventures in the company's financial statements," Shurgard said.

The picture for the manufactured housing segment has improved, but a recovery is still far off, according to a report from Fitch Ratings.Among the positives are the purchase of Clayton Homes (Vanderbilt Mortgage) and the proposed purchase of Oakwood Homes by Berkshire Hathaway, Omaha, Neb., as well as CFN Investment Holdings' success in bringing Conseco Finance (now Green Tree Investment Holdings, St. Paul, Minn.) out of bankruptcy. Fannie Mae has also stepped up its involvement in the area, helping to bring U.S. Bank and GMAC-Residential Funding Corp., both of Minneapolis, into MH lending. But the long-term benefits of the changes are still to come, and thus Fitch expects manufactured housing to perform poorly this year, the rating agency said. "Despite CFC's emergence from Chapter 11, it will take time to determine the level of stabilization of the servicing platform, while the benefits of Berkshire Hathaway's purchase of Clayton and pending purchase of Oakwood Homes have yet to be recognized beyond the initial infusion of capital," said Jenine Fitter, a Fitch senior director. "Further, re-establishment of a full servicing operation for these new entities needs to be consistent for a longer period before its impact on performance can be judged appropriately."

Standard & Poor's has announced that E*Trade Financial Corp., a New York-based provider of online discount brokerage services and retail mortgage lending, will replace FleetBoston Financial Corp. in the S&P 500 Index as of the close of trading on March 31.S&P said FleetBoston is being replaced in the index because it is being acquired by Banc of America Corp., which is also a constituent of the S&P 500. Concurrently with the move, E*Trade will be deleted from the S&P MidCap 400 Index and replaced by Ryland Group Inc., a homebuilder and provider of mortgage-related financial services based in Calabasas, Calif. Ryland, in turn, will be deleted from the S&P SmallCap 600 Index and replaced by Sterling Financial Corp., Spokane, Wash., which will be added to that index's Thrifts & Mortgage Finance Sub-Industry Index, S&P said. S&P can be found online at http://www.standardandpoors.com.

Sales of existing single-family homes in Illinois totaled 6,669 in February, up slightly from 6,662 in February 2003 but still a record high for that month, according to the Illinois Association of Realtors.The statewide median sales price stood at $155,700 in February, up from $154,300 a year earlier, the association said. In the Chicago metropolitan statistical area, resales totaled 4,048 in February, down from 4,061 a year earlier, and the median sales price was up 5.4%. The association can be found on the Web at http://www.illinoisrealtor.org.

Sales of existing single-family homes in Florida were 18% higher in February than they were a year earlier, according to the Florida Association of Realtors.Sales of detached single-family homes totaled 16,127 in February, compared with 13,642 in February 2003, FAR said. The median price of a single-family home was $162,600 in February, up from $143,400 a year earlier, according to the association.

The median price of an existing home in California was 20.7% higher in February than the level recorded a year earlier, and resales were up 3.9%, according to the California Association of Realtors.The median price of an existing single-family detached home in California totaled $394,300 in February, compared with $326,640 a year earlier, CAR reported. Closed escrow sales of existing single-family detached homes totaled a seasonally adjusted annualized rate of 589,220, up from the 566,890-unit rate recorded in February 2003, CAR said. "While demand for housing gives no indication of slowing down, the inventory of homes for sale continues to decline," said CAR president Ann Pettijohn. "This dynamic is a key constraint in the housing market and why we're experiencing such dramatic price appreciation." CAR can be found online at http://www.car.org.

Aames Financial Corp., a Los Angeles-based subprime mortgage lender, has reported the filing of two registration statements with the Securities and Exchange Commission regarding the company's proposed conversion into a real estate investment trust and a related initial public offering.The statements were filed by Aames Investment Corp., a wholly owned subsidiary of Aames Financial that would become the parent company and be taxed as a REIT if the registration statements become effective. At the same time, Aames Investment would raise additional capital through an IPO of its common stock. Aames Financial has retained Friedman, Billings, Ramsey & Co. as a financial adviser in connection with the reorganization and as an underwriter in connection with the IPO.

Wellsford Real Properties, New York, has retained Lazard Freres & Co. to advise the real estate merchant banking firm on strategic options.WRP said it is looking at various financial and business alternatives, including a recapitalization, acquisitions, sales of assets, a liquidation, and a sale or merger of WRP, as well as other options that would keep WRP independent. WRP acquires, finances, and operates real estate, and also invests in real estate companies.

Whit Brame has been named capital markets manager of Mortgage Guaranty Insurance Corp., Milwaukee, the principal subsidiary of MGIC Investment Corp.Mr. Brame was most recently vice president of secondary marketing at Home Capital Inc., Atlanta. His responsibilities with MGIC will focus on "maintaining and maximizing customer relationships in the Southeast," the company said. MGIC can be found on the Web at http://www.mgic.com.

The real challenge in crafting a new RESPA regulation will be devising a system that is agreeable to all the parties involved, according to Ron Alba of the Mortgage Bankers Association.Speaking at the Northeast Regional Conference of Mortgage Bankers Associations in Atlantic City, N.J., Mr. Alba said any regulation under the Real Estate Settlement Procedures Act will need the support of the mortgage brokers, the title industry, and Realtors. "That is where the real challenges lie," he said. Meanwhile, Jack Konyk of National City Corp. called on industry professionals at the grassroots level to keep their voices heard at the Department of Housing and Urban Development. He said the consumer groups will be doing that, and "numbers speak." Mr. Konyk continued: "You have the expertise rulemakers need to see." The MBA can be found online at http://www.mortgagebankers.org.

The average 30-year fixed mortgage rate rose to 5.40% for the week ending March 26 from 5.38% the previous week, while the average rate for adjustable-rate mortgages sank to another record low, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate inched up from 4.69% to 4.70%, and the average rate for one-year Treasury-indexed ARMs declined from 3.39% to 3.36%, the lowest the rate has been since Freddie Mac began tracking it in 1984. Fees and points averaged 0.6 of a point for ARMs and 0.7 of a point for fixed-rate mortgages. "Low mortgage rates continue to fuel the housing market, making homeownership more attainable to a broader segment of families," said Frank Nothaft, Freddie Mac's chief economist. "As evidence of this, we have seen mortgage applications rise for the last two months and home sales have picked up speed. And with the weather getting better, we should see housing sales strengthen even more in the near term." A year ago, the average 30-year and 15-year fixed rates were 5.91% and 5.21%, respectively, and the average one-year ARM rate was 3.84%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

Sales of existing single-family homes rose 2.0% in February, only the eighth month on record in which the resale pace has reached or surpassed the 6 million mark, according to the National Association of Realtors.The NAR reported that resales increased from a revised seasonally adjusted annual rate of 6.00 million units in January to a 6.12 million rate in February. The rate was 5.7% higher than the 5.79 million rate recorded in February 2003. "Currently, we are projecting that home sales will decline slightly, but they remain at exceptionally high levels," said NAR chief economist David Lereah. "With a strong underlying demand for housing from a growing population in a recovering economy, we could be flirting with another record this year." Regionally, resales jumped 14.3% in the Northeast and 7.6% in the Midwest, rose 3.1% in the West, and fell 4.2% in the South, the NAR reported. The NAR can be found on the Internet at http://realtor.org.

There are "three troubling themes" that are affecting the mortgage industry, Mortgage Bankers Association Chairman Rob Couch told the Northeast Regional Conference of Mortgage Bankers Associations in Atlantic City Wednesday.The first is predatory lending. Every state that has enacted a predatory lending law has seen a reduction in the availability of subprime credit, he said, adding that what needs to be talked about is where to "strike the balance." To increase homeownership rates, the industry needs to find a way to reach those that have not been reached before, Mr. Couch said. The second issue is the perception of "foreclosures run amok," he said, dismissing as "hooey" complaints that mortgage bankers put people in homes just to fail. With total foreclosures at 1.29%, Mr. Couch sees "the glass at 98.71% full." Even with subprime driving foreclosures to 5.63%, that means 94.37% are not in foreclosure. The third troubling issue, he said, involves complaints of "too much subsidy for homeownership," including recent comments by Federal Reserve Chairman Alan Greenspan. "Homeownership is the single best vehicle for the accumulation of wealth," Mr. Couch said, challenging Mr. Greenspan to attend a closing for a first-time homebuyer.