Originations

The National Association of Securities Dealers has suspended two securities brokers for making unsuitable investment recommendations to customers, advising them about how to use proceeds obtained from cash-out home mortgage refinancing.James Kenas, of Coeur d'Alene, ID, and formerly a registered representative with WMA Securities, Inc., was suspended for six months after he advised his customers to purchase mutual fund shares, when the only funds available to them were from mortgaging their home. Mr. Kenas said the six-month suspension is inappropriate. "I definitely feel like I and other people are currently being singled out because NASD headquarters wants to make an issue out of this," he said. "Clients should have the freedom to position their assets any way they choose." Steve Morgan of Loveland CO, formerly associated with Washington Square Securities, also was suspended for six months and ordered to pay restitution of more than $15,000, which must be paid before he re-enters the securities business. NASD also filed a complaint against Jamie Engelking of Denver, CO, formerly with First Union Securities, charging that he recommended the purchase of a variable annuity using mortgage proceeds. Messages left for Mr. Morgan and Mr. Engelking were not returned by MortgageWire's deadline.

ICBA Mortgage, the mortgage lending affiliate of the Independent Community Bankers Association, has formed an affinity partnership with Financial Freedom Senior Funding Corp., Irvine, Calif., to distribute reverse mortgage lending products through IBCA member banks."Reverse mortgages add additional flexibility to the wide range of residential lending products and services already offered by ICBA Mortgage and will well serve the seniors in our communities," said Thomas J. Sheehan, chairman of Grafton (Wis.) State Bank and chairman of ICBA Mortgage. "This new reverse mortgage program creates a great new opportunity for community banks and their older customers." Financial Freedom will provide training, customer and bank support and will assist IBCA members in marketing these products.

Fannie Mae is "stepping up" its pre-purchase reviews of subprime mortgage pools to make sure it is not helping predatory lenders, according to a Fannie Mae attorney."It is very important to Fannie Mae that we are not providing liquidity that will go to predatory lenders who are ripping off consumers," deputy general counsel Jon Seward told a National Community Reinvestment Coalition meeting. Fannie will be sampling a statistically significant number of loans in each pool to make sure the loans are in compliance with its predatory lending guidelines. Fannie is planning to issue expanded guidelines in a few weeks. "To the extent that the loans do not comply, we will kick them out," Mr. Seward said. "Or if it exceeds our tolerance, we won't go forward with that deal." The new predatory lending guidelines are expected to ban mandatory arbitration, limit the duration of payment penalties to three years, and ban balloon loans with a term of less than seven years.

United Guaranty Residential Insurance Co., Greensboro, N.C., has announced its selection by the New Hampshire Housing Finance Authority to provide mortgage insurance for the authority's single-family housing programs.Under the five-year contract, UGRIC will provide up to $900 million in pool insurance coverage, and will be one of four providers of primary mortgage insurance, in support of special homeownership programs for low- and moderate-income borrowers in New Hampshire. Among the programs are the Purchase Rehabilitation Program, the Voucher Assisted Mortgage Option, and the Manufactured Housing Replacement Program.

Corporate Office Properties Trust, a real estate investment trust based in Columbia, Md., has announced the closing of a $300 million unsecured revolving credit facility to replace its $150 million secured revolver.The pricing of the new three-year facility is based on the company's leverage, with an initial price of 140 basis points over the London interbank offered rate. The facility has a one-year extension option. Wachovia Securities Inc. and KeyBanc Capital Markets were the joint lead arrangers of the facility. COPT can be found online at http://www.copt.com.

Four classes of J.P. Morgan Commercial Mortgage Finance Corp.'s mortgage pass-through certificates, series 1999-C8, have been downgraded by Moody's Investors Service.The downgrades were as follows: class G, from Ba2 to Ba3; class H, from B1 to B3; class J, from Caa1 to Ca; and class K, from C to Caa2. Moody's also affirmed the ratings on six other classes in the deal and confirmed the ratings of two classes. The rating agency attributed the downgrades to a decline in pool performance. The certificates are collateralized by 123 mortgage loans secured by commercial and multifamily properties. Three loans have been liquidated from the pool, resulting in realized losses totaling approximately $18.2 million, Moody's said. Moody's can be found online at http://www.moodys.com.

MetLife Inc., New York, has announced the execution of a contract on behalf of an affiliate to sell the Sears Tower in downtown Chicago.The terms of the deal were not disclosed, but MetLife said the sale is expected to result in an after-tax gain of approximately $90 million. The contract was executed on behalf of Metropolitan Insurance and Annuity Co.

Newcastle Investment Corp., New York, has priced a $450 million collateralized debt obligation in an offering by related entities.Newcastle, an investor in real-estate-related assets, said it is selling $414 million of investment-grade-rated debt in the offering. The CDO is made up of about 63% commercial mortgage-backed securities, about 17% senior unsecured debt of real estate investment trusts, and about 20% real-estate-related asset-backed securities, Newcastle said. Newcastle has acquired about 80% of the assets that will make up the portfolio. The fully invested portfolio is expected to have a weighted average credit rating of BBB-minus.

Fannie Mae has announced a partnership with the National Association of Home Builders to kick off the third phase of the company's expanded American Dream Commitment.The partnership will place special emphasis on the growing affordable housing needs of working professionals (such as police officers, firefighters, teachers, and health care providers) who cannot afford to live in the communities they serve. Fannie Mae and the NAHB will focus on strategies that combine existing Fannie products and services with new approaches. Fannie cited findings from various housing studies showing that, as the gap between home price growth and income growth widens, housing affordability is dropping for many middle-income households. The first step will be the creation of a Metropolitan-Area Workforce Housing Initiative in an area to be identified by the end of June. The chosen community will serve as a laboratory for Fannie, local homebuilders, lenders, mortgage insurers, Realtors, nonprofit organizations, government agencies, and other partners.

Dividend Capital Group, Denver, has announced the formation of Dividend Capital Investments, an investment advisory firm focused on managing public real estate securities.DCI plans a March 16 launch of the Dividend Capital Realty Income Fund, which will invest in securities of real estate investment trusts and other companies chiefly engaged in the real estate industry. The fund will be offered to individual investors through DCI's network of broker-dealer relationships, Dividend Capital said. Russell Platt, DCI's chief investment officer and the former CIO of Morgan Stanley Asset Management's real estate division, will head the fund's investment team.

IndyMac Bancorp, Pasadena, Calif., says it hopes to be one of the 10 largest mortgage lenders by market share within four years.More specifically, IndyMac chairman and chief executive officer Michael Perry told attendees at a JMP Securities investors conference that he believes IndyMac will be among the top eight by 2008. Last year, IndyMac expanded its sales and marketing force to 848 positions, from 477 in 2002. Mr. Perry said IndyMac plans to leverage its mortgage banking infrastructure by expanding its sales force, adding geographical presence, and creating niche mortgage lending units. He also said the company can gain market share in a contracting mortgage origination environment because of its "all-weather product mix," which includes strength in alternative-A lending, adaptability to adjustable-rate lending, and home purchase orientation. IndyMac can be found online at http://www.indymacbank.com.

Bankers expect to increase their exposure to commercial real estate collateral this year, according to a survey of 75 financial institutions by San Francisco-based Bridger Commercial Funding that suggests the market is now recovering.While bankers reported that credit and underwriting standards would be tighter in the surveys Bridger conducted in 2002 and 2003, they are now indicating that the standards have not changed this year, the company said. Additionally, the survey "found a movement toward bullishness about the sector from neutral sentiments reported since 2002." The respondents expect "moderate-to-strong" performance for multifamily, retail, and warehouse/industrial property and a "moderate-to-weak" performance for office and lodging. Bridger, a commercial mortgage market intermediary, said survey respondents hold on average more than $500 million in CRE-backed loans.

Criimi Mae, Rockville, Md., has reported a net loss of $4.1 million ($0.27 per share) for 2003, a major improvement from the net loss of $65.5 million ($4.77 per share) reported the year before.For the fourth quarter, the commercial mortgage investor and servicer reported net income of $2.6 million ($0.17 per share), compared with a net loss of $34.6 million ($2.48 per share) for the comparable period of 2002. The real estate investment trust attributed the improvement to reductions in impairment charges and interest expenses. In a related teleconference, Barry Blattman, Criimi Mae's chairman and chief executive officer, said the "dialogue is now shifting from challenges to opportunities" for the REIT. He said Criimi Mae is contemplating getting into the "manufacture" of commercial mortgage-backed securities, by originating or purchasing newly originated commercial mortgage loans and issuing CMBS backed by the loans. By servicing the CMBS loans within the company, Criimi Mae says it hopes to differentiate itself from other companies in that arena. Criimi Mae can be found online at http://www.criimimaeinc.com.

United Financial Mortgage Corp., Oak Brook, Ill., has announced an alliance with the media division of New York-based Admiral Asset Group Inc. under which Admiral Asset will advertise UFMC's mortgage products and services in some of UFMC's largest markets.Benefits for customers who choose home financing through Admiral Asset's advertising efforts include: a dedicated staff of trained and experienced loan officers; no-cost, no-obligation interest rate protection, subject to time limits; and Streamlined Up-Front Approval, subject to certain conditions. Steve Khoshabe, UFMC's president and chief executive officer, said the campaign "will begin to brand the United Financial Mortgage Corp. name and to bolster our loan origination efforts as well." Admiral Asset is an independent specialized business services organization that operates nationwide, with representatives in 12 states. UFMC can be found online at http://www.ufmc.com.

Several lawsuits have been filed against mass e-mail senders -- who promote products that include mortgage loans -- by four of the major online services, alleging violations of CAN-SPAM, the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003.The plaintiffs are America Online Inc., EarthLink Inc., Microsoft Corp. (the parent company of MSN), and Yahoo Inc. The AOL complaint against "John Does 1 through 40" cites the transmission of messages to AOL members that allegedly sell a variety of products, including mortgages. The EarthLink complaint groups together John Does 26 through 35 as the "Mortgage Lead Spammers." The Yahoo complaint against a group it calls the "Head Operation," after defendants Eric Head, Matthew Head, and Barry Head, alleges that the group sent 94 million e-mail messages to Yahoo Mail users. The spam included mortgage solicitations.

Affiliates of J.C. Flowers I LLP (known as JCF CFN LLC) have sold their holdings in Green Tree Investment Holdings LLC, which is the former Conseco Finance manufactured housing unit, to an affiliate of Fortress Investment Group LLC.Flowers, Fortress, and Cerberus Capital Management LP teamed up to acquire the manufactured housing unit in a bankruptcy court auction approximately one year ago with a bid of $1.1 billion. Among the selling members of JCF CFN are The Enstar Group Inc. and Castlewood Holdings Ltd. J. Christopher Flowers, a Montgomery, Ala., investor, indirectly controls the JCF CFN entities. The sellers invested $25 million to get a 3.995% interest in Green Tree, of which Enstar provided $15 million and Castlewood $10 million. Total consideration for the stake is $40 million, of which Enstar will get $24 million and Castlewood $16 million. Separately, Conseco Inc., the former owner of Conseco Finance, said it has entered into a settlement with the Securities and Exchange Commission. Without admitting or denying the allegations, Conseco has consented to a cease-and-desist order, but will not have to pay any fines or other monetary penalties, nor will it have to restate any financial statements. The investigation looked at how Conseco Finance accounted for its interest-only securities and servicing rights.

The average 30-year fixed mortgage rate dropped to 5.41% for the week ending March 12 from 5.59% the previous week, while the average rate for adjustable-rate mortgages sank to a record low, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate fell from 4.88% to 4.69%, and the average rate for one-year Treasury-indexed ARMs declined from 3.47% to 3.41%, the lowest the rate has been since Freddie Mac began tracking it in 1984. Fees and points averaged 0.6 of a point for 30-year fixed-rate mortgages and ARMs and 0.7 of a point for 15-year FRMs. "As we had predicted earlier in the month, interest rates for 30-year fixed-rate mortgages edged closer to last year's record low figures," said Frank Nothaft, Freddie Mac's chief economist. "For the year as a whole, we expect long-term rates may be even lower annually than they were in 2003." A year ago, the average 30-year and 15-year fixed rates were 5.59% and 4.93%, respectively, and the average one-year ARM rate was 3.68%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

Three classes of Credit Suisse First Boston Mortgage Securities Corp.'s commercial mortgage pass-through certificates, series 2002-TFL1, have been downgraded by Fitch Ratings.The downgrades were as follows: class H-ALH, from BBB-minus to BB-plus; class F-WBC, from BBB-plus to BB-plus; and class G-WBC, from BBB-minus to BB-minus. The ratings on the 21 other Fitch-rated classes in the deal were affirmed. Fitch attributed the downgrades to declines in occupancy and Fitch-adjusted net cash flows at the properties backing two multifamily pools.

The slow recovery in the job market should help keep the pressure off interest rates and sustain a strong housing market this year, according to the National Association of Realtors.In the association's March real estate outlook, NAR chief economist David Lereah points to the Bureau of Labor Statistics Household Survey, which indicates that 1.3 million jobs were created last year. "That's a wider measure of jobs than a separate survey of companies because it includes the self-employed, but we still have a way to go to recover all the jobs lost early in the decade," Mr. Lereah said. "The silver lining now is that interest rates probably won't move much until late in the year when the unemployment rate is expected to drop to 5.4%." The NAR economist said the 30-year fixed mortgage rate should rise slowly, reaching 6.3% in the fourth quarter. The NAR can be found on the Internet at http://realtor.org.

The National Reverse Mortgage Lenders Association says originations of Home Equity Conversion Mortgages (the Federal Housing Administration-insured reverse mortgage product) were up 76% between October 2003 and January 2004 when compared with those of the previous year.NRMLA, citing statistics from the Department of Housing and Urban Development, said HECM production totaled 8,700 loans so far in the federal fiscal year, compared with 4,948 for the year before. Consumer awareness of reverse mortgages, and senior citizens' increasingly tight budgets, are responsible for the surge, NRMLA officials said. "While some signs suggest a recovering economy, many retirees are still struggling day-to-day to live comfortably or to make ends meet," said NRMLA president Peter Bell. "As a result of this, more and more older Americans are turning to reverse mortgages as the solution to their financial needs." The 10 HUD field offices where the highest numbers of HECM loans were originated in the first four months of the federal fiscal year are: Los Angeles; Santa Ana, Calif.; San Francisco; Denver; New York; San Diego; Detroit; Boston; Coral Gables, Fla. (a suburb of Miami); and Minneapolis-St. Paul.