Originations

ComUnity Lending Morgan Hill, Calif., has announced the opening of a subprime lending division, CreditFlex Funding, which will be headed by ComUnity veteran Steven T. Walker as division vice president.The company said offices will be established throughout the country, the first of which will be in Morgan Hill. Mr. Walker, who was most recently vice president of retail development, previously managed Norwest Mortgage's Alternative Lending Branch in Washington State, among other subprime-oriented positions. Joining him to lead the new division will be Scott Coburn, who has been named vice president and national sales manager. "We feel that the ComUnity Lending service philosophy will make a splash in the nonprime marketplace," said Darryl Fry, president and chief executive officer of ComUnity Lending. "The marriage of nonprime loan products and our Mortgage Master service concept is a natural fit for meeting the demands of the marketplace." Under the Mortgage Master concept, one mortgage professional underwrites, locks, draws, documents, and funds loans. The company can be found online at http://www.comunitylending.

The Market Composite Index, an overall measure of mortgage applications, rose from 878.7 to 889.1 on a seasonally adjusted basis during the week ended March 5, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications rose 1.6% on the week, but were down 43.1% from the level of a year earlier. The Purchase Index climbed from 422.6 to 428.6 on a seasonally adjusted basis, while the Refinance Index rose from 3532.2 to 3567.6. Refinancings represented 56.1% of total applications, down from 56.4% the previous week, while adjustable-rate mortgages accounted for 28.1%. The average contract interest rate for 30-year fixed-rate mortgages fell from 5.49% to 5.34%, and points (including the origination fee) rose from 1.32 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.

Unequal access to home mortgages and a changing market structure are burdening with high-cost mortgage debt low-income homebuyers who lack the knowledge to shop for affordable products, according to research by the Harvard University Joint Center for Housing Studies.According to center director Nicolas P. Retsinas, new technologies "have spawned a revolution in mortgage finance" enabling millions of low-income families "to obtain home mortgages on favorable terms." However, he said, "The mortgage broker-led 'push marketing' of low-downpayment, high-cost mortgages has left some unsuspecting borrowers with mortgage debt they cannot afford and may not even need." Entitled "Credit, Capital, and Communities: The Implications of the Changing Mortgage Banking Industry for Community Based Organizations," the 18-month study funded by the Ford Foundation was released at a Federal Reserve Board briefing. It found that mortgage brokers are most prevalent in the subprime market, where they accounted for almost 45% of subprime home mortgage originations in 2002 -- 16 percentage points higher than their share of prime mortgage originations.

Jeffrey M. Granowitz, a former principal at The Praedium Group, has announced the formation of Artisan Realty Capital, a boutique real estate investment firm based in New York.Artisan will focus on value-added investments that offer attractive pricing due to distress, repositioning, or special situations, he said. "Artisan is targeting mezzanine and equity capital products for middle-market transactions in major East Coast and Midwest markets," said Mr. Granowitz. "We will use strategic alliances to originate less widely marketed transactions and will offer flexible investment structures based on risk and complexity." Mr. Granowitz formed Artisan along with David J. Domm, who worked with him at Praedium. Mr. Granowitz spent 10 years at Credit Suisse First Boston and The Praedium Group, including five years as a principal.

A survey of 40 commercial/multifamily mortgage banking firms has found that all the 29 respondents favor the extension and reauthorization of the Terrorism Risk Insurance Act of 2002, according to the Mortgage Bankers Association.The survey respondents, who together did more than $115 billion in debt financing for 2003, say that a failure to re-enact the law will adversely affect the commercial/multifamily real estate market, the MBA said. Twenty-eight respondents said TRIA had made terrorism insurance more available, while 18 of 23 respondents that responded to a question about the cost of terrorism insurance say the legislation has made terrorism insurance less expensive. Gail Davis Cardwell, the MBA's senior vice president for commercial/multifamily, said the association "urges the Treasury Department to extend the 'make available' provisions of TRIA to ensure continued availability of terrorism insurance, and urges Congress to reauthorize TRIA." The legislation expires in December 2005.

Kroll Inc. has announced that its mortgage screening subsidiary, Kroll Factual Data Inc., Loveland, Colo., has acquired The Credit Network Trust, a mortgage credit reporting company, for $20.5 million in cash.The acquisition is expected to add $0.03 to Kroll's earnings per share in 2004, the New York-based global risk consulting company said. TCN, which is based in Framingham, Mass., and has operations in Lyndonville, Vt., is expected to generate 2004 revenues of $16.3 million, Kroll said. "This acquisition has the strategic benefit of broadening our client base and revenues in the lender and wholesaler side of the mortgage lending business, which will further balance our revenues across all key segments of the industry," said James Donnan, president of Kroll Factual Data. Kroll Factual Data, a provider of merged mortgage credit reports and other customized business information services, can be found online at http://www.krollfactualdata.com.

Omega Healthcare Investors Inc., a real estate investment trust based in Timonium, Md., has announced that it has entered into "firm commitments" with three companies for a new $125 million revolving senior secured credit facility.Under the commitments with Bank of America NA, Deutsche Bank AG, and UBS Loan Finance, the facility is conditioned on the completion of Omega's private offering of $200 million of unsecured notes, among other things, Omega said. The proceeds of that offering are expected to be used to repay borrowings under Omega's existing senior secured credit facility and for working capital and general corporate purposes. If completed, the new facility and note offering would replace Omega's $225 million senior secured credit facility and its $50 million acquisition credit facility. The company can be found online at http://www.omegahealthcare.com.

Vestin Group, a Las Vegas-based commercial mortgage fund manager and lender, has reported that it is the subject of an "informal inquiry" by the Pacific Regional Office of the Securities and Exchange Commission.The SEC has not given the reasons for the inquiry, which involves Vestin and its Vestin Fund I and Vestin Fund II, the company said. Mike Shustek, Vestin's chairman and chief executive officer, said in a prepared statement that Vestin has recently settled "an administrative issue" with the Nevada Mortgage Lending Division, which found that the company did not have any "direct administrative violations." He added that Vestin has "fully complied with SEC disclosure requirements" and is "cooperating fully with this informal inquiry."

Freddie Mac has announced the formation of an Advisory Council Committee on Targeted Affordable Housing in its multifamily division that will monitor market trends and seek comments on the company's affordable housing products.The committee will consist of eight seller/servicers, three representatives of the tax credit equity market, and Freddie Mac's director of affordable housing, W. Kimball Griffith, and its director of affordable equity investments, Christine Hobbs. Companies that will be represented on the panel include American Property Financing Inc., Berkshire Mortgage Finance, CharterMac, GMAC Commercial Mortgage, MMA Financial, National Equity Fund Inc., North Marq, PNC Multifamily Capital, and Primary Capital. "We are expanding our outreach on affordable housing issues as part of the renewed emphasis that our new senior management team has placed on our affordable housing mission," said Adrian Corbiere, Freddie Mac's multifamily senior vice president. Freddie Mac can be found online at http://www.freddiemac.com.

Oak Street Mortgage LLC, Carmel, Ind., has announced the launch of Oak Street Mortgage Correspondent Lending, which will be targeted at midsize mortgage originators who sell into the secondary market.The business will handle a broad line of products, including first and second mortgage loans, for purchase, refinance, cash-out, and debt consolidation, the company said. "This is a logical next step for Oak Street Mortgage," said Steve Alonso, the company's chairman and chief executive officer. "We've organized a team of mortgage professionals for this business that has great experience as mortgage investors." Oak Street now has three channels -- retail, wholesale, and correspondent. The correspondent channel, headed by Ed Waller, will be housed in the wholesale division and will be managed from Overland Park, Kan., a suburb of Kansas City. The company can be found online at http://www.osloans.com.

The industrial real estate sector is rebounding, and the office sector has stabilized, according to a report by the Society of Industrial and Office Realtors, Washington.The association's 2004 Comparative Statistics market data report indicates that the vacancy rate for industrial real estate held steady last year at 10.2%, while the office vacancy rate rose from 15.1% to 16.2%. Twenty-one office markets are in "serious distress," with vacancy rates of at least 20%, the report said. David T. Houston, president of SIOR and Colliers Houston & Co., said the report "reveals that a rebound has begun" for the industrial RE market, while the office market "has stabilized and should improve towards the end of 2004, if the current rate of economic recovery continues." The association can be found online at http://www.sior.com.

Capital Lease Funding, New York, has filed a registration statement with the Securities and Exchange Commission for the initial public offering of 20 million shares of its common stock priced at between $9.00 and $11.00 per share.The company said it expects to be listed on the New York Stock Exchange and to qualify for real estate investment trust status. The current owners of Capital Lease Funding are company chairman Lewis S. Ranieri, who is widely regarded as the father of the mortgage-backed security; Hyperion Partners; an affiliate of Wachovia Bank; and Capital Lease management. The company said it plans to use the money raised to invest in net lease properties -- in the form of both debt and equity financings -- leased to "high credit quality" tenants. The initial funding for the investments will be through short-term financing, after which the company plans to tap the secured long-term debt market, mostly through collateralized debt obligations.

American Residential Investment Trust Inc., the San Diego-based parent company of the American Mortgage Network wholesale mortgage bank, has announced the purchase of 1.1 million shares of ARIT stock by the D3 Family Funds at $9.50 per share.The purchase -- at an above-market price -- was privately negotiated and not made through an open market transaction, ARIT said. (The company's stock was trading below $9 per share on March 5.) ARIT also reported that its board of directors has appointed David Nierenberg to the board to replace John C. Rocchio, a general partner of TCW/Crescent Mezzanine LLC. Mr. Nierenberg is president of Nierenberg Investment Management Co., which manages the D3 Family Funds, four private investment partnerships based in Camas, Wash. ARIT can be found online at http://www.amerreit.com.

Employment in the mortgage industry fell by 7,300 in January as lenders continued to trim their payrolls for the sixth consecutive month.The U.S. Bureau of Labor Statistics reported March 5 that jobs in the mortgage banking/broker sector fell from 439,800 in December to 432,500 in January. Since last July, lenders have cut 25,100 full-time employees. But the layoffs and job cuts may be ending soon, since home sales remain strong and refinancing activity is increasing. The February employment report indicates that job creation in the economy continues to be anemic, and the yield on the 10-year Treasury note fell to its lowest level since July. This should give homeowners another chance to refinance at historically low mortgage rates. (The February employment report released on Friday provided mortgage sector employment data for January only. BLS instituted this one-month lag in the mortgage data when it revamped its jobs report in May.)

Standard and Poor's Ratings Services has announced that it will continue to rate structured transactions containing loans originated by national banks governed by anti-predatory-lending laws in 11 states and in Oakland, Calif., because the lenders would not be subject to assignee liability.The 11 states are: Georgia, Illinois, Kentucky, Maine, Nevada, New Jersey, New Mexico, New York, North Carolina, Oklahoma, and South Carolina. The rating agency said it was unable to make the same determination about assignee liability for loans originated by national banks subject to predatory-lending laws in Arkansas and Los Angeles. The decision followed a review of a final rule issued by the Office of the Comptroller of the Currency that amends criteria regarding the OCC's pre-emption authority over national banks and their operating subsidiaries. S&P can be found online at http://www.standardandpoors.com.

The average 30-year fixed mortgage rate inched up to 5.59% for the week ending March 5 from 5.58% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate dipped from 4.89% to 4.88%, and the average rate for one-year Treasury-indexed adjustable-rate mortgages declined from 3.50% to 3.47%. Fees and points averaged 0.7 of a point for all three mortgage categories. "Despite strong signs of economic growth, the financial markets were nonplussed, leaving mortgage rates to hover around the same affordable level for yet another week," said Frank Nothaft, Freddie Mac's chief economist. A year ago, the average 30-year and 15-year fixed rates were 5.67% and 5.01%, respectively, and the average one-year ARM rate was 3.76%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

A servicer is free to "force-place" terrorism insurance if the borrower refuses to get the insurance, a U.S. District Court in New York has ruled in a case initiated by Dallas-based Omni Berkshire Corp. against Wells Fargo.Kathryn O' Neall, a managing director with the Wells Fargo commercial mortgage servicing group, said she believes this is the first decision upholding the right of a servicer to force-place terrorism insurance. In rendering the decision, District Judge Denny Chin said that while terrorism insurance could not be required under the "all risk" policy, Wells Fargo "acted reasonably in requiring Omni to purchase terrorism insurance under the 'other insurance' clause" of the loan agreement. The judge has given Omni 30 days from Feb. 25 to obtain $60 million in terrorism insurance coverage on five hotel properties that are the collateral for a $250 million loan that is part of a $1.8 billion commercial mortgage-backed securities offering. If Omni fails to do so, Wells Fargo is free to force-place the insurance at Omni's expense. Omni's general counsel had not returned a call seeking comment on the ruling by MortgageWire's deadline.

Class I of Credit Suisse First Boston Mortgage Securities Corp.'s commercial mortgage pass-through certificates, series 1997-C2, has been downgraded from CCC to CC by Fitch Ratings.The ratings on nine other Fitch-rated classes in the deal were affirmed. Fitch attributed the downgrade to losses that are expected to be incurred when the trust's real estate owned is disposed of. Six loans, representing 8.3% of the pool, are in special servicing, the rating agency said.

Class J of J.P. Morgan Commercial Mortgage Finance Corp.'s mortgage pass-through certificates, series 1999-C8, ha been downgraded from CCC to CC by Fitch Ratings.Fitch also affirmed the ratings on nine other Fitch-rated classes in the deal and upgraded two classes. The rating agency attributed the downgrade to anticipated losses on several specially serviced loans. Fitch can be found online at http://www.fitchratings.com.

Municipal Mortgage & Equity, Baltimore, has agreed to sell 1.95 million shares of its common stock to RBC Capital Markets and Legg Mason Wood Walker.MuniMae did not disclose the price of the offering. The investor in multifamily debt and equity said it expects to use the net proceeds from the offering to fund future investments, to reduce debt, and for "general corporate purposes." The underwriters of the issue have been given the option to buy up to 195,000 additional shares to cover any overallotments. MuniMae can be found on the Web at http://www.munimaemidland.com.