Originations

The Market Composite Index, an overall measure of mortgage applications, dipped from 1117.1 to 1114.9 on a seasonally adjusted basis during the week ended March 19, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications fell 0.3% on the week and were down 25.6% from the level of a year earlier. The Purchase Index declined from 452.4 to 448.9 on a seasonally adjusted basis, while the Refinance Index rose from 4983.7 to 4988.7. Refinancings represented 63.1% of total applications, up from 62.8% the previous week, while adjustable-rate mortgages accounted for 28.1%. The average contract interest rate for 30-year fixed-rate mortgages rose from 5.37% to 5.38%, and points (including the origination fee) fell from 1.26 to 1.24 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mortgagebankers.org.

New-homes sales jumped 5.8% in February as low mortgage rates and better weather combined to boost homebuying.The U.S. Census Bureau reported that the sales of new single-family homes rose from a seasonally adjusted annual rate of 1.1 million in January to a 1.16 million rate in February. National Association of Home Builders economists have been forecasting that this year's sales would lag slightly behind 2004's record pace. However, mortgage rates have gone down instead of up. If mortgage rates stay low, "then this year may very well beat last year," said NAHB economist Michael Carliner.

Palm Harbor Homes Inc., Dallas, has announced that its CountryPlace Mortgage Ltd. subsidiary has arranged a $200 million warehouse borrowing facility.The two-year facility will be used to fund chattel loans originated by company-owned retail superstores, Palm Harbor said. The agreement provides for an advance rate of 80% against the outstanding principal balance of eligible receivables. The warehouse line replaces a one-year, $125 million facility with a 65% advance rate, the company said.

Coventry Real Estate Advisors, New York, has raised $330 million in equity capital from institutional investors for its Coventry Real Estate Fund II.Acquisitions for the fund, which will invest in "value-added" retail properties nationwide, will be made through joint ventures with Developers Diversified Realty, Coventry said. The real estate investment trust said it will provide management and leasing services to the fund, and will also make a 20% equity co-investment in each fund acquisition. The fund will have the capacity to acquire over $1 billion of assets, including the two partners' equity contributions and a potential 65% debt component, Coventry said.

MortgageIT Holdings Inc., New York, has filed a registration statement with the Securities and Exchange Commission for an initial public offering.MortgageIT Holdings will be the parent company of MortgageIT Inc., a New York-based mortgage banker. The units of MortgageIT include IPI Skyscraper (retail), MIT Lending (wholesale/correspondent), and MortgageIT.com. MIT Lending recently opened a subprime division, New Beginnings. MortgageIT Holdings expects to elect to take real estate investment trust status. A pair of residential lenders converting to public ownership are also taking the same route --New York Mortgage Corp., and HomeBanc Mortgage Corp., Atlanta.

Commercial Capital Bancorp Inc. and Sperry Van Ness International Inc., both based in Irvine, Calif., have announced a strategic alliance under which SVN will promote CCBI as its provider of financing, banking, and deposit products.The companies said CCBI will provide SVN, its brokers, and its clients with an institutionalized source of prompt funding decisions for borrowers and properties referred for financing. The alliance and marketing agreement represents an effort to create "the one-stop shop for income property investors," said Stephen H. Gordon, chairman and chief executive officer of CCBI. Joint marketing will include reciprocal referral efforts, website links, and direct-mail promotions. CCBI, an originator of multifamily loans and the holding company of Commercial Capital Bank, can be found online at http://www.commercialcapital.com. SVN, a commercial real estate brokerage firm, can be found at http://www.svn.com.

Sandler O'Neill & Partners has raised its price target for Freddie Mac's stock to $74, citing "too steep a discount" in the current price relative to Fannie Mae's shares. Previously, Sandler O'Neill had pegged a $65 target to Freddie Mac. Analyst Mike McMahon said that currently Freddie Mac's stock trades at about a 40% discount to Fannie Mae. The new 12-month price target reflects a more rational 25% discount, he said in a report. A likely catalyst for an increasing share price is the release of the company's 2003 earnings at the end of June, he said. Freddie Mac shares were trading at $59.27 just before 1 p.m., down nearly 2% from its opening price.

Mercury Partners, Greenwich, Conn., has expressed concern about a recent Securities and Exchange Commission filing by Lodgian proposing the issue of $175 million of common stock. The Atlanta-based hotel operator plans to use the proceeds from the offering to aid its restructuring efforts. Mercury Partners, a merchant bank and a "significant shareholder" in Lodgian, said, in a written release, that the offering – which it is calling a "wholesale dumping of equity" – reflects "a serious error in judgment" for a company with an existing equity market capitalization of $50 million. According to Mercury, Lodgian's stock price has gone down from over $8.00 two weeks ago to $5.60 by the close of trading on March 17, a 30% decline. Mercury is recommending some alternative courses of action for Lodgian, including a smaller equity offering than is currently proposed; a hotel sales program; or an equity for preferred exchange offering. Responding to a request for comment on Mercury Partners' objections, Dan Ellis, Lodgian's general counsel, told Mortgage Wire that Lodgian's board of directors is still reviewing the letter, which they received Thursday morning, and that it is too early for them to comment.

Guaranty National Bank, Tallahassee, Fla., which was recently closed by the Office of the Comptroller of the Currency, has reopened the doors to its five offices here as Hancock Bank of Florida, a newly-chartered bank. Carl F. Chaney, chief financial officer of Hancock Holding Co., described the $13.6 million cash deal as a "clean bank transaction." Guaranty National is the second bank to fail this year and the first in Florida since Net 1st National Bank, Boca Raton, was closed on March 1, 2002. According to the OCC, poor management resulted in the closing. Guaranty National, with approximately $71 million in assets, was chartered in 1986. It had losses of over $4 million in 2003 and over $2 million in 2002.

BB&T Corporation, Winston-Salem, N.C., has lowered its earnings estimate for this year to reflect the impact that "fluctuating interest rates" have had on its mortgage operation. Management now expects earnings per share for 2004 to be $2.75 to $2.90 excluding the impact of merger-related charges. Previous guidance was $2.85 to $2.95. John Allison, BB&T's chairman and CEO, said, "fluctuations in interest rates are producing unexpected pressure on mortgage banking operations." Specifically, he said originations have been slower than expected in the first quarter, while falling rates have impaired the value of BB&T's mortgage servicing rights.

Zacks.com, the online unit of Zacks Investment Research, Chicago, has put LandAmerica Financial Group Inc., the Richmond, Va.-based title insurer on its "#5(Strong Sell)" list. In its report, Zachs.com noted that LandAmerica fell short of its fourth quarter consensus estimated earnings. Meanwhile earnings estimates for 2004 have fallen by $0.50 per share in the past month. "For the time being it may be wise to avoid increasing exposure to the company until earnings momentum materializes," Zacks.com said.

The average 30-year fixed mortgage rate slipped slightly to 5.38% during the week ending March 18 from 5.41%, while the average rate for adjustable-rate mortgages inched down to yet another record low, according to the Freddie Mac Primary Mortgage Market Survey. The average 15-year fixed mortgage rate remained unchanged from the previous week at 4.69% and the average rate for one-year Treasury-indexed ARMs fell to 3.39% from 3.41% the week before, the lowest the rate has been since Freddie Mac began tracking it in 1984. Fees and points averaged 0.7 of a point for 30-year fixed-rate mortgages and 15-year FRMs and 0.6 of a point for ARMs. "Mortgage rates this week are barely above the generational low levels we saw in June of last year," said Frank Nothaft, Freddie Mac's chief economist. "Indeed, Freddie Mac's annual average forecast of long-term mortgage mortgage rates is approximately 5.75% for the 30-year FRM this year, well below the 33-year historical average. That said, we are currently predicting that this will fuel yet another record year for total home sales." A year ago, the average 30- and 15-year fixed rates were 5.79% and 5.11%, respectively, and the average one-year ARM rate was 3.75. Freddie Mac can be found online at http://www.freddiemac.com.

CreditXpert, Towson, Md., says it has a new product that will allow lenders to approve more loans by helping applicants raise their credit scores.Loan officers can now use CreditXpert's Credit Wizard to enter a target credit score improvement and automatically identify, if possible, steps to achieve the desired score. The target-score feature is not "score manipulation," but rather a tool to help lenders close more loans and help consumers qualify for better loan products, said David Chung, interim president and vice president of business development for the firm.

Delta Financial Corporation, Woodbury, N.Y., said it intends to file a registration with the SEC in the second quarter to issue stock.The actual size of any proposed offering, and its successful completion, will depend upon market conditions and other factors, the company said. Delta believes the completion of the offering would help increase the public float of Delta's stock. If the offering is completed, Delta said it intends to use approximately $13.9 million of the proceeds to redeem all of its outstanding Series A 10% Preferred Stock and the balance for general corporate purposes. Since 1991, Delta, which originates home equity loans in 26 states, has sold $9.3 billion of its mortgages through 38 securitization transactions.

Boykin Lodging Company, Cleveland, has notified the Securities and Exchange Commission that it will not file its 10-K financial statement for the year ended December 31, 2003, by March 15.The lodging real estate investment trust reports that it is currently reviewing the accounting treatment related to a Doubletree Kansas City property that was acquired in November 1997. The seller of the property had some "tax increment financing" obligations on the property which have been assumed by a subsidiary of Boykin. And the REIT is now reviewing "whether and to what extent these obligations should be reflected as liabilities and related assets" on its balance sheet. However, the REIT expects to file the form 10-K by March 30, 2004.

The Mortgage Bankers Association and the Building Owners & Managers Association International have joined forces to provide information and training on the commercial real estate industry to each group's members.Through CampusMBA, the educational arm of the mortgage trade group, both associations will offer Web-based courses on topics such as mold and its impact on commercial buildings, tenant retention strategies, security and emergency preparedness, property and corporate facilities management, asset and portfolio management, and building operations.

Mortgage lenders ought to be thinking about is going to happen when interest rates start to rise above their historical lows, according to Federal Deposit Insurance Corp. chairman Donald Powell.Mortgage indebtedness increased by $1.4 trillion or 27% in the past two years and homeowners tapped $390 billion in equity from their homes last year, the FDIC chairman told an Independent Community Bankers Association meeting. Meanwhile, income growth has been slow and personal bankruptcies hit a record high in 2003. What happens when interest rates really go up, he asked? "What will be the impact on borrowers' ability to service debt or continue their historic consumption levels?" The FDIC chairman also cautioned that the performance of commercial real estate loans have benefited from low rates, despite weak fundamentals. "Low interest rates have bailed out many projects that would have sunk if the environment had been different."

The Mortgage Bankers Association's composite index of loan applications increased by 25.6% to hit 1117.1 in the week ending March 12, its highest level since last July.On an unadjusted basis, loan applications were up 24.8% from the previous week but were down 31.9% compared to the same week a year earlier. The Purchase Index rose 5.6% to 452.4 during the week. The refinancing index surged by 39.7% to hit 4983.7. Refinancing accounted for 62.8% of loan applications, up from 56.1% a week earlier. The average contract rate for 30-year, fixed-rate mortgages was 5.37%, up from 5.34% a week earlier, with average points of 1.26%, according to the MBA.

Guardian Mortgage Documents (GMD), Lakewood, Colo., and MortgageFlex Systems Inc. have formed a strategic alliance that will allow MortgageFlex customers to customize upfront disclosure documents and related documents involved in the closing process through a newly-designed interface.Prior to developing this interface both companies were relegated to coming up with client-specific interfaces based on individual needs. GMD provides document preparation, automated workflow management and outsourcing solutions and can be found on the Web at www.gmd.com. MortgageFlex provides LoanQuest, an integrated mortgage processing system and can be found on the Web at www.mortgageflex.com.

Single-family housing starts fell 4.1% in February as construction activity declined for the third consecutive month.The U.S. Census Bureau reported that single-family starts fell from a seasonally adjusted annual rate of 1.55 million in January to 1.49 million in February. But National Association of Home Builders economists are expecting an improvement in March due to the recent drop in mortgage rates and a high level of unused permits. For the first quarter, NAHB expects starts will total 1.54 million. The forecast for the second quarter is 1.45 million SF starts. In February, housing starts rebounded in the Northeast and Midwest after severe winter weather in January. However, starts in the South and West fell -- probably reflecting worst than average weather, according to NAHB economist Michael Carliner. Meanwhile, multifamily starts fell 4% from a seasonally adjusted annual rate of 350,000 in January to 336,000 in February.