Originations

HomeBanc Mortgage Corp., Atlanta, has announced plans to form a mortgage real estate investment trust that is expected to go public within several months.The REIT, HomeBanc Corp., will file a registration statement with the Securities and Exchange Commission for the purpose of an initial public offering in late spring or early summer, HomeBanc Mortgage said. The size of the IPO is expected to be approximately $500 million, the company said. HomeBanc Mortgage can be found on the Web at http://www.homebanc.com.

The Market Composite Index, an overall measure of mortgage applications, rose from 854.5 to 878.7 on a seasonally adjusted basis during the week ended Feb. 27, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications rose 15.2% on the week, but were down 29.3% from the level of a year earlier. The Purchase Index declined from 423.5 to 422.6 on a seasonally adjusted basis, while the Refinance Index rose from 3361.9 to 3532.2. Refinancings represented 56.4% of total applications, up from 55.7% the previous week, while adjustable-rate mortgages accounted for 28.8%. The average contract interest rate for 30-year fixed-rate mortgages was unchanged, at 5.49%, and points (including the origination fee) fell from 1.39 to 1.32 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mortgagebankers.org.

LTC Properties Inc., Malibu, Calif., has called for a redemption of nearly 2 million shares of 9.0% series B cumulative preferred stock, which represents all the outstanding shares of the series B stock.The company said the redemption price will be $25 per share plus accrued and unpaid dividends, or $25.1875 per share. The redemption date will be March 31, 2004. LTC, a real estate investment trust that invests in long-term care and other health care facilities, can be found on the Web at http://www.ltcproperties.com.

Paragon Financial Corp., a residential mortgage lender based in Ponte Vedra Beach, Fla., has reported the retention of JPS Capital Corp. to help raise $7 million to $10 million in growth capital.Paragon said it plans to use the proceeds to increase its warehouse facilities, add loan officers, expand its wholesale broker network, and pursue acquisitions. JPS will also assist in any merger-and-acquisition advisory work, the company said. Paragon can be found on the Web at http://www.paragonfinancial.com.

Freddie Mac has announced that it invested nearly $2 billion last year in Low Income Housing Tax Credits and mortgage revenue bonds.New LIHTCs absorbed $958 million of the investment, while $982 million went to MRBs, the government-sponsored enterprise reported. "It was a very competitive year for tax-advantaged investments, particularly fixed-rate revenue bonds," said Paul Peterson, executive vice president and chief operating officer of the GSE. "Nevertheless, Freddie Mac continued to be among the leaders in providing capital to these very important sectors that are responsible for financing the majority of new affordable housing."

Municipal Mortgage & Equity LLC, Baltimore, has reported net income of $72.5 million ($2.44 per share) for 2003, compared with $28.8 million ($1.13 per share) the year before.MuniMae, an investor in multifamily mortgage debt and equity, said the increased earnings "resulted primarily from a $25.7 million transaction recorded as discontinued operations and a $21.2 million decrease in losses on derivative securities." For the fourth quarter of 2003, the company reported net income of 9.3 million ($0.29 per share), down from $10.7 million ($0.42 per share) for the comparable period of 2002. MuniMae can be found on the Web at http://www.munimaemidland.com.

Home prices increased at an 8.4% rate nationwide in 2003, up from 7.6% the year before, according to Freddie Mac.In the fourth quarter, the annualized home price appreciation rate was 17.8%, Freddie Mac said in releasing the Conventional Mortgage Home Price Index. The index showed that the Pacific states recorded the largest gains in home prices, which rose 13.1% for the year. The Middle Atlantic states of New Jersey, New York, and Pennsylvania followed with an 11.9% growth rate, and the New England states finished third with an 11.2% rate. "The 45-year low in interest rates set this past June spurred a huge refinance and home purchase wave that crested in the fourth quarter," said Amy Crews Cutts, Freddie Mac's deputy chief economist. "Higher interest rates in the third and fourth quarters did little to quell interest in the housing market due to the very high economic growth in the second half of the year and the tax break that many households received." The index was jointly developed by Freddie Mac and Fannie Mae. Freddie Mac can be found online at http://www.freddiemac.com.

Financial Freedom Senior Funding Corp., Irvine, Calif., has created an Affinity Division, a business development program for nonlender intermediaries such as financial advisers and insurance agents.The new unit will be responsible for educating these groups on how reverse mortgages can be used to help address their clients' needs. "Reverse mortgages have already proven to be an effective financial planning tool for unlocking frozen assets in order to fund [long-term care] plans, annuities, or other vehicles as well as to execute tax and retirement planning strategies," said Craig Corn, executive vice president of Financial Freedom. "As this trend has grown, so has the influx of inquiries from intermediaries. Resources and manpower from our Affinity Division will enable us to address advisers' and agents' growing need for support."

American Home Mortgage Investment, Melville, N.Y., has priced a public offering of 12.5 million shares of common stock at $25 per share.The underwriters have been granted an option to buy up to 1.875 million shares to cover any overallotments, the company said. The joint lead managers of the offering were Friedman, Billings, Ramsey & Co. and Lehman Brothers Inc.

Home equity lending at commercial banks grew by 33% in 2003 even though consumers were refinancing at a record pace and consolidating their debts.The latest numbers from the Federal Deposit Insurance Corp. show that borrowings on home equity lines of credit rose to $284.5 billion as of Dec. 31, up from $214.6 billion at year-end 2002. In the fourth quarter alone, HELOCs outstandings grew by $23.7 billion, or 9%. "Growth in assets and earnings was dominated by single-family mortgages in the first half of 2003 and credit card and home equity lending in the second half," FDIC chief economist Richard Brown said. The FDIC fourth-quarter report also shows that HELOC delinquencies fell during the year, but chargeoffs rose from 0.17% as of year-end 2002 to 0.20% as of year-end 2003.

The Eleventh Federal Home Loan District Cost of Funds Index stood at 1.811% in January, a decline of 9 basis points and a new record low.In December 2003 the index stood at 1.902%, up from 1.821% in November, the first time the index had increased since June 2002. COFI is a weighted average of the cost of mortgage money (including deposits) paid by member institutions. Typically it lags other rates by three to six months, so trends can be seen by observing the activity of other rates. According to data collected by the Federal Reserve Bank of St. Louis, the nationwide secondary-market rate for the one-month certificate of deposit was 1.05% in July. The index went up 2 bps in August, held steady in September, fell 1 bp in October, and held steady before rising 3 bps in December. However, in January the index fell 5 bps to 1.04%. While the three-month and six-month CD rates trended upward in the fall months, they too declined by 4 and 5 bps, respectively, in January.

Volume for private mortgage insurers suffered in January as rising interest rates severely cut into production levels, according to data from the Mortgage Insurance Cos. of America.Only $14.7 billion of primary new insurance was written in January, down from $20.7 billion in December. Even though Radian pulled out of the group last July, there was no month in 2003 in which primary insurance totaled less than $20 billion. By type, $12.8 billion of traditional insurance and $1.9 billion of bulk insurance was written in January. The number of applications received continued its decline. In July, the first month without Radian, 291,678 applications were received. In January, that fell to 122,642, nearly 13% fewer than the 145,213 received in December. More bad news was seen in the cure/default ratio. January's ratio was 67.89%, compared with 83.7% in December and 75.9% in January 2003. There were 36,213 cures and 53,340 defaults during the month. MICA can be found online at http://www.micanews.com.

New Mexico Gov. Bill Richardson has signed a bill that repeals Section 7 of the state's Home Loan Protection Act, because it could have imposed assignee liability with regard to manufactured housing home loans.Section 7 was said to be problematic because it was not limited to high-cost home loans. Many in the lending industry expressed concern that the broad language used in the act could seriously hamper manufactured home lending and cash-out refinance lending in the state.

The stocks of Equity Office Properties Trust, Chicago, and MeriStar Hospitality Corp., Arlington, Va., have received "strong sell" ratings from Zacks.com.The Zacks Rank #5 (Strong Sell) ratings are assigned to a list of Stocks to Sell Now by Chicago-based Zacks & Co. Zacks noted that EOPT recently reported fourth-quarter earnings that fell short of those from a year earlier, and said earnings estimates for 2004 have slumped in the face of "challenging" fundamentals in the office property sector. MeriStar reported a net loss in the fourth quarter, albeit a smaller one than it reported a year earlier, Zacks said, and it has received downward revisions in earnings estimates from several analysts. Zacks can be found online at http://www.zacks.com.

Standard & Poor's Ratings Services has decided to rate structured finance transactions that include Cleveland loans governed by the city's anti-predatory-lending ordinance.The rating agency said it will not apply any special criteria to the loans, because the law does not impose liability on purchasers or assignees of predatory loans. Penalties are imposed only on lenders who violate the ordinance provisions, all of which relate to the making of the loan. The penalties are either criminal in nature or prohibit doing business with the city of Cleveland. S&P can be found online at http://www.standardandpoors.com.

Trammell Crow Co., a Dallas-based commercial real estate services company, has announced the formation of an industrial development program with ING Clarion, the U.S. real estate arm of a Dutch company, ING Group NV.Trammell Crow said it will be a co-investor in the program, which will focus on creating up to $500 million of bulk warehouse distribution centers in major U.S. markets. "Although this is the first such program we have initiated in several years, it is a continuation of the strategy we followed throughout the last economic cycle," said Bob Sulentic, chairman and chief executive officer of Trammell Crow. The company can be found on the Web at http://www.trammellcrow.com.

Three classes of Salomon Brothers Mortgage Securities VII Inc. CDC Securitization Corp.'s series 2001 CDC deal have been downgraded by Fitch Ratings.The downgrades were as follows: class C, from A to A-minus; class D, from A-minus to BBB-plus; and class G-DS, from BBB-minus to BB-plus. In addition, the ratings on 11 classes in the deal were affirmed and one other was placed on Rating Watch Evolving. Fitch attributed the downgrades to an anticipated loss in the GF Hotel Portfolio, representing 20.3% of the pool, and a decline in credit quality of the Divco-SVP loan, representing 38.6%. The GF Hotel Portfolio is being liquidated by the special servicer, Midland Loan Services Inc., Fitch said. The rating agency can be found online at http://www.fitchratings.com.

Reckson Associates Realty Corp., Melville, N.Y., has announced the appointment of three new independent directors, including Elizabeth McCaul, a former New York state banking regulator.Ms. McCaul was New York's superintendent of banks from 1997 to 2003. The other two newly appointed directors are Stanley "Mickey" Steinberg, a senior adviser to the Casas, Benjamin & White management consulting firm, and Douglas Crocker II, who was formerly chief executive officer, president, and vice chairman of Equity Residential, the nation's largest apartment real estate investment trust. Reckson, an office REIT, can be found online at http://www.reckson.com.

Merit Financial Inc., Kirkland, Wash., has announced the launch of Merit Real Estate Services, which will serve the buyers and sellers of homes in the Puget Sound region.Merit Financial said its goal in forming the new division is to leverage its operations -- such as centralized mortgage brokering, internal bank lines, and title and escrow services (via an affiliation with Platinum Escrow) -- to provide clients with "seamless turnkey services" that offer convenience and lower fees. "In a typical real estate transaction, there are several third parties involved in ensuring the deal is completed," said Scott Greenlaw, the founder and chief executive officer of Merit Financial. "With more hands in the pot, there is greater potential for stalemates to occur, whether that is through underwriting obstacles, contract issues, or problems with release of funds." Merit Real Estate Services can be found online at http://www.meritres.com.

The average 30-year fixed mortgage rate was unchanged, at 5.58%, for the week ending Feb. 27, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate crept up from 4.87% to 4.89%, and the average rate for one-year Treasury-indexed adjustable-rate mortgages fell from 3.53% to 3.50%. Fees and points averaged 0.7 of a point for all three mortgage categories. "Financial markets seem to have locked into this level of mortgage rates," said Frank Nothaft, Freddie Mac's chief economist. ".... And it looks like consumers are taking advantage of the low level of mortgage rates, as applications for home purchases and refinancing are up for the last two weeks." A year ago, the average 30-year and 15-year fixed rates were 5.79% and 5.14%, respectively, and the average one-year ARM rate was 3.83%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.