Originations

Application volume at Countrywide Financial Corp., Calabasas, Calif., surged 33% in January (to $1.78 billion) from that of the previous month, although it was down about 11% from the volume recorded a year earlier, according to the company.The application pipeline increased 16%, to $38 billion, from the total in December, while loan fundings declined to $21 billion, the company reported. Countrywide attributed the funding decline to homebuying seasonality and a short working month of 20 business days. Countrywide's servicing portfolio stood at nearly $658 billion at the end of January, up 40% from $469 billion a year earlier. Countrywide can be found online at http://www.countrywide.com.

Fitch Ratings has affirmed its ratings on Pennsylvania Real Estate Investment Trust, Philadelphia, and removed them from Rating Watch Negative.The action followed PREIT's announcement that the Internal Revenue Service has granted its request for retroactive relief, allowing it to elect taxable REIT subsidiary status for a subsidiary company. The failure to make the TRS election had put PREIT at risk of losing its REIT status for the tax years 2001 through 2003. Fitch said it expects the development to "act as a catalyst for management to review the financial systems and controls of the company to avoid future lapses." Fitch can be found online at http://www.fitchratings.com.

The Market Composite Index, an overall measure of mortgage applications, fell from 855.7 to 797.8 on a seasonally adjusted basis during the week ended Feb. 6, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications fell 4.5% on the week and 26.5% from the level of a year earlier. The Purchase Index declined from 444.0 to 402.2 on a seasonally adjusted basis, while the Refinance Index fell from 3250.6 to 3099.1. Refinancings represented 56.9% of total applications, down slightly from 57.0% the previous week, while adjustable-rate mortgages accounted for 26.3%. The average contract interest rate for 30-year fixed-rate mortgages fell from 5.63% to 5.60%, and points (including the origination fee) decreased from 1.42 to 1.40 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mortgagebankers.org.

Post Properties, Atlanta, has reported net income of $2.7 million ($0.07 per share) for 2003, compared with $49.3 million ($1.33 per share) for the previous year.For the fourth quarter, the multifamily real estate investment trust reported net income of $5.8 million ($0.15 per share), compared with $9.6 million ($0.26 per share) for the fourth quarter of 2002. The battle to take over the company last year by John Williams, Post's former chief executive officer, appears to have made inroads into the REIT's earnings. Post reported that, excluding severance and proxy charges, net income available to common shareholders totaled $26.6 million ($0.71 per share) for 2003. The REIT's earnings have also been hurt by multifamily vacancies.

Robert Efros has been named vice president of the mortgage division of Paramount Bank, Farmington Hills, Mich.Mr. Efros will be responsible for developing target markets and initiating new programs for the division, the bank said. Mr. Efros has been with Paramount Bank for seven years, specializing in construction loans.

Pennsylvania Real Estate Investment Trust, Philadelphia, has announced that it will retain its status as a real estate investment trust as a result of retroactive relief granted by the Internal Revenue Service.PREIT recently reported that it had inadvertently failed to opt for taxable REIT subsidiary status for a subsidiary company, which could have prevented it from qualifying for REIT status for the tax years 2001 through 2003. Under the relief granted by the IRS, PREIT has been permitted to make the TRS election, effective Oct. 12, 2001. The failure to make the TRS election would have resulted in a requirement to pay taxes, interest, and possible penalties, which could have caused it to default under various agreements, the REIT said.

Texas United Bancshares Inc., La Grange, Texas, has announced the acquisition (by its subsidiary State Bank) of Community Home Loan Inc., Houston.The terms of the deal were not disclosed. Community Home, a four-year-old, privately held mortgage company, will retain its name and operate as a subsidiary of State Bank, Texas United said. "Community Home Loan's established retail presence will give us a strong position in the fast-growing markets of Houston and San Antonio and complements our company's existing mortgage operation," said Don Stricklin, president and chief executive officer of Texas United.

Countrywide Home Loans, Calabasas, Calif., and Paragon Financial Resources have announced the formation of Paragon Financial Mortgage, which will offer more than 130 loan programs.The joint venture, an operating division of Countrywide Mortgage Ventures LLC, will enable the clients of Paragon Global Resources Inc. (the parent company of Paragon Financial Resources) to offer "unprecedented levels of service" to their employees, the companies said. Qualified homebuyers will have options that include zero-downpayment loans and a variety of fixed- and adjustable-rate loans with "optimum flexibility" on rates and terms, they said. The companies can be found online at http://www.countrywide.com and http://www.paragongri.com.

In an effort to prop up the sagging manufactured housing sector, Fannie Mae has reinstituted a 5% down, 30-year loan program for factory-built houses with nine lenders on a negotiated basis.The big secondary-market institution also pledged to work with the nine companies to transform the manufactured housing market by developing processes and procedures that lower the risk associated with mortgages on houses that are assembled in a factory, trucked to a building site, and fixed to the land. "This is both more and better," said Rep. Barney Frank, D-Mass., in praising the initiative. Fannie Mae invests in manufactured housing loans, but stepped back last year because of problems in the business. Shipments have fallen to their lowest level in decades, and many manufacturers and retailers have exited the market or declared bankruptcy, largely because of high delinquencies and loan losses. The number of repossessed and foreclosed manufactured homes also is said to be at record high levels. The nine lenders -- AgFirst Farm Credit Bank, Flagstar Bank, GMAC Manufactured Housing, Huntington Mortgage Group, Origen Financial, RBC Mortgage, 21st Mortgage, Vanderbilt Mortgage, and Washington Mutual -- have all demonstrated the "high levels of expertise necessary to understand the property, titling, appraisal, and servicing issues associated with manufactured homes," Fannie Mae said.

Richard Rosan, president of the Urban Land Institute, and Stanley Perla, vice president and director of internal audit at Vornado Realty Trust, have been named to the board of trustees of American Mortgage Acceptance Co., a New York-based real estate investment trust.The REIT said the new independent trustees will replace Arthur Fisch and Peter Allen, who resigned from AMAC's board in January when they were deemed no longer independent as a result of a recent transaction. The transaction involved the acquisition of Related Capital Co. by CharterMac, on whose board they serve. AMAC is managed by an affiliate of Related Capital, the REIT said. AMAC, which specializes in multifamily housing finance, can be found online at http://www.americanmortgageco.com.

Pennsylvania Real Estate Investment Trust, Philadelphia, is at risk of losing its real estate investment trust status as a result of failing to opt for taxable REIT subsidiary status for a subsidiary company.The omission could prevent PREIT from qualifying for REIT status for the tax years 2001 through 2003, the REIT said. PREIT's "failure to qualify as a REIT and the resulting requirement to pay taxes and interest (and perhaps penalties) would cause it to default under various agreements to which it is a party, including under its credit facility, and would have a material adverse effect on its business, prospects, results of operations, earnings, financial condition and its ability to declare or pay dividends," the REIT said. PREIT could also be precluded from qualifying for REIT status until 2006. PREIT is seeking "discretionary retroactive relief" from the Internal Revenue Service and said it believes that the relief will be granted. Citing the REIT-status development, Fitch Ratings and Moody's Investors Service have placed PREIT's ratings on watch for possible downgrade. Meanwhile, PREIT has withdrawn a previously announced offering of 4.35 million shares of its common stock.

Royal Bank of Scotland and HSBC Holdings are being mentioned as possible suitors for Greenpoint Financial, New York, the nation's 18th-largest residential lender, sources have told MortgageWire.Investment banking sources told MW they have heard rumors concerning Greenpoint, but have yet to see an offering book on the thrift or its mortgage affiliate, Greenpoint Mortgage Funding of Novato, Calif. The London-based HSBC already has a large presence in the U.S. mortgage market and owns Household International, the largest residential subprime servicer in the United States. HSBC Mortgage, Depew, N.Y., is the nation's 16th-largest residential lender. (HSBC is also a large warehouse provider.) Over the past week, Greenpoint's shares have been trading near their 52-week high of $45.10 a share. In trading on Monday its share price was up slightly.

Residential Funding Corp., Minneapolis, has announced its entry into the manufactured housing finance market with the formation of GMAC Manufactured Housing.The new company will originate, acquire, and service manufactured housing loans in conjunction with selected partners, GMAC-RFC said. Chris Gilson, executive vice president and business leader of GMAC Manufactured Housing, said the new company and its strategic partners are committed to "providing an influx of capital to this underserved housing segment." The strategic partners include Fannie Mae (see item above). Mike Kozlak, president of GMAC-RFC's Residential Capital Group, said manufactured housing consumers "have been forced to cope with inconsistent lending standards, the exit of major lenders from the marketplace, and lax underwriting standards." GMAC Manufactured Housing said it plans eventually to leverage GMAC-RFC's expertise in securitization to issue asset-backed securities backed by pools of manufactured housing loans. The parent company can be found online at http://www.gmacrfc.com.

Housing affordability in California was down by five percentage points in December from the level recorded a year earlier, according to the California Association of Realtors.Housing affordability stood at 23% in December, down from 28% a year earlier and 25% in October, CAR said. The index indicates the percentage of households that can afford to buy a median-priced home in California, which cost $404,520 in December. The minimum household income needed to buy a median-priced home was $94,730, up from $81,290 a year earlier, CAR said. (The figures are based on a 30-year fixed-rate mortgage at a 5.82% interest rate, assuming a 20% downpayment.) CAR can be found on the Web at http://www.car.org.

Sarah Gerecke, who joined Neighborhood Housing Services of New York City as chief operating officer in 2001, has been named the nonprofit's new chief executive officer.She replaces Francine Justa, who stepped down after 18 years of leadership in affordable housing development. Ms. Gerecke's previous executive experience includes housing finance, real estate law, low-income housing program development, and housing development and management.

Wells Fargo & Co., San Francisco, has announced plans to hire over 400 employees in Los Angeles this year, including more than 100 home mortgage loan consultants, terming it the company's "most aggressive hiring plan in recent memory" in any of its markets.Wells Fargo Home Mortgage expects to open six mortgage stores in low- to moderate-income and multicultural areas of the city, the parent company said. "Los Angeles is the city of the 21st century, and it's Wells Fargo's largest and fastest-growing market," said Shelley Freeman, regional president for Wells Fargo's LA Metro Community Bank. ".... We opened nine new banking stores last year in Los Angeles and will more than double that number this year." In addition to the more than 100 mortgage consultants, Wells Fargo said its planned hires will include more than 200 community bankers, nearly 40 business bankers in its California Business Banking division, 30 personal financial consultants in its Private Client Services group, and several commercial bankers in its Specialized Financial Services group. The company can be found online at http://www.wellsfargo.com.

Mortgage lenders reduced their payrolls in December by 5,800 full-time employees, according to the latest government report.The Bureau of Labor Statistics data released Friday show that employment in the mortgage banker/broker sector fell from 444,700 in November to 438,900 in December. Lenders have been trimming their payrolls since September, when the demand for refinancings fell dramatically. Meanwhile, the BLS report shows that the economy created 112,000 jobs in January, and the December jobs creation number was revised upward from 1,000 to 16,000. The unemployment rate fell slightly, to 5.6%. (There is a one-month lag in the mortgage employment data due to changes made by the Labor Department last year in its employment report.) The BLS can be found online at http://stats.bls.gov.

The rating outlook for the title insurance operations of LandAmerica Financial Group Inc., Richmond, Va., has been revised from negative to stable by Standard & Poor's Ratings Services.S&P also affirmed its A-minus counterparty credit and financial strength ratings on LandAmerica. The rating agency said it revised LandAmerica's outlook because its market position as the third-largest domestic title insurer has stabilized. S&P said it expects LandAmerica to be "well positioned to manage any downturn or moderation in the real estate sector given the variable cost structure of its predominant agency distribution channel, which accounted for 54% of total title revenues as of Sept. 30, 2003." S&P can be found online at http://www.standardandpoors.com.

There is roughly a one-in-six chance of a general decline in home prices over the next two years, according to the PMI Risk Index, which rose 12 points in the fourth quarter.The average value of the index for the 50 largest metropolitan statistical areas stood at 174 at the end of the fourth quarter, said PMI Mortgage Insurance Co., the Walnut Creek, Calif.-based mortgage insurer that created the index. The index value means that these cities have on average a 17.4% probability of experiencing a home price decline in the next two years. PMI noted that San Jose, Calif., which topped the index with a 468, as well as Portland, Ore., with 353, and Charlotte, N.C., with 346, are higher-risk MSAs that experienced increases in their risk index average. They have suffered from higher-than-average unemployment rates and low or negative job creation rates, PMI said.

American Residential Investment Trust Inc. and its American Mortgage Network subsidiary have launched a subprime initiative."The program will be piloted in four regional centers this month and is expected to roll out across the country in the summer of 2004," said the company, which operates a national wholesale mortgage bank. American Residential can be found online at http://www.amerreit.com and American Mortgage Network can be found at http://www.amnetmortgage.com.