Originations

The average 30-year fixed mortgage rate rose to 5.72% for the week ending Feb. 6 from 5.68% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate rose from 4.97% to 5.03%, and the average rate for one-year Treasury-indexed adjustable-rate mortgages rose from 3.59% to 3.61%. Fees and points averaged 0.6 of a point for all three mortgage categories. "Shrugging off statements by the Fed last week, mortgage rates remained relatively more stable than bond market yields," said Amy Crews Cutts, Freddie Mac's deputy chief economist. "Without a key indicator that would move it one way or another, the financial market is in something of a state of limbo." A year ago, the average 30-year and 15-year fixed rates were 5.88% and 5.27%, respectively, and the average one-year ARM rate was 3.89%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

Fannie Mae has announced that the second phase of its expanded $2 trillion American Dream Commitment, designed to facilitate homeownership for 18 million targeted American families by the end of the decade, will focus on rental housing assistance.During this phase, Fannie will promote affordable housing initiatives for mid-life and older Americans and help families at risk of losing their homes. Among other partners, Fannie is cooperating with AARP, a nonprofit organization for older Americans. "Especially older Americans on reduced income and new homeowners with few savings are afraid of losing their homes because of unexpected setbacks," said Fannie Mae chairman and chief executive officer Franklin D. Raines. The three-phase expansion plan announced in January aims to increase homeownership for another 6 million first-time homebuyers, including 1.8 million minority families, and to raise the minority homeownership rate to 55% in 10 years. The third phase will focus on "expanding the supply of affordable housing where it is needed the most," Fannie said. The government-sponsored enterprise can be found online at http://www.fanniemae.com.

LandAmerica Financial Group Inc., Richmond, Va., has announced the acquisition through a subsidiary of two mortgage credit reporting companies: Far West Credit, Salt Lake City, and CommCo Credit, Orange, Calif.The terms of the deals were not disclosed. Barton Taylor, the founder of Far West, will remain with the company, focusing on business development, LandAmerica said. "These acquisitions are important steps in achieving LandAmerica's vision the premier provider of real estate transaction services," said Ken Goins, president of LandAmerica Info1, which the parent company says is the fourth-largest mortgage credit reporting company in the United States. LandAmerica can be found on the Web at http://www.landam.com.

Commercial and multifamily mortgage originations surged in 2003 to a record $116 billion, up more than a third from $86.4 billion the year before, according to the Mortgage Bankers Association.The total of $37.9 billion in commercial/MF originations for the fourth quarter also set a quarterly record, and was $7.9 billion above the volume recorded a year earlier, the MBA reported. "The combination of the strong relative value of real estate as an investment, plentiful capital, continued low interest rates, and the quickened pace of the economy's recovery fueled loan demand," said Douglas Duncan, the MBA's chief economist and senior vice president for research and business development. "The commercial real estate finance business should remain strong as we enter 2004, given our forecast of continued solid economic growth and moderate increases in credit costs." The MBA said the increase in commercial/MF volume last year was recorded across all property and investor types.

GMAC Commercial Mortgage was the top commercial mortgage servicer at the end of 2003, with a total servicing portfolio of $213.7 billion, the Mortgage Bankers Association has reported.Wachovia Securities ($120.2 billion), Midland Loan Services ($83.3 billion), and GEMSA Loan Services ($61.0 billion) were the other top-ranked servicers for the period (based on total master and primary servicing volume), the association said. The largest servicers for life company and other private-investor loans are: GMAC, GEMSA, Prudential Asset Resources, and Midland. Washington Mutual, Berkshire Mortgage Finance, GMAC, and ARCS Commercial Mortgage top the list of Fannie Mae/Freddie Mac servicers, the MBA said. And the largest Federal Housing Administration servicers are GMAC, Reilly Mortgage Group, Prudential, Midland Loan Servicing, and Greystone Servicing. Lennar Funding, Midland, GMAC and ARCap REIT are the leading "named special servicers" who will service the loans when problem situations arise.

Under pressure from consumer groups, Fannie Mae has agreed to stop purchasing subprime mortgages with mandatory arbitration clauses and prohibit prepayment penalties longer than three years.The announcement comes two months after Freddie Mac announced it would no longer invest in or purchase subprime loans that contain mandatory arbitration clauses, starting Aug. 1, 2004. Fannie plans to notify its lenders in the next few months about its new policies and the effective dates. Fannie Mae was scheduled to make the announcement Wednesday at a joint news conference with AARP. In addition, Fannie is making a commitment to finance and preserve affordable rental housing for older Americans as well as independent-living and assisted-living facilities. Mandatory arbitration precludes borrowers from suing a lender in court. AARP maintains that mandatory arbitration clauses protect predatory lenders and denies their victims access to justice.

The Market Composite Index, an overall measure of mortgage applications, fell from 868.9 to 855.7 on a seasonally adjusted basis during the week ended Jan. 30, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications rose 12.4% on the week and were down 25.9% from the level of a year earlier. The Purchase Index declined from 451.6 to 444.0 on a seasonally adjusted basis, while the Refinance Index slipped from 3296.7 to 3250.6. Refinancings represented 57.0% of total applications, down from 58.5% the previous week, while adjustable-rate mortgages accounted for 27.2%. The average contract interest rate for 30-year fixed-rate mortgages rose from 5.58% to 5.63%, and points (including the origination fee) decreased from 1.47 to 1.42 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mortgagebankers.org.

The U.S. homeownership rate ended 2003 at a record rate of 68.6%, according to the government, and homeownership among blacks rose to nearly 50%.The Census Bureau reported that homeownership rates rose from 68.4% in the third quarter to 68.6% in the fourth quarter. The percentage of homeowners in the United States at the end of the fourth quarter of 2002 was 68.3%. The latest numbers show that homeownership among blacks rose from 47.7% in the fourth quarter of 2002 to 49.4% in the fourth quarter of 2003. But Hispanic homeownership ended the year at 47.7%, down from 48.3% a year earlier. "These homeownership numbers, coupled with a record number of new and existing homes sold last year, show that housing continues to lead the way in our rebounding economy," acting Housing Secretary Alphonso Jackson said.

Freddie Mac has partnered with the Affordable Housing Partnership, HSBC Mortgage Corp. (USA), and HSBC Bank USA in a $25 million initiative that will provide affordable homeownership to residents of the New York cities of Albany, Schenectady, and Troy."SHOP-Capital marks our fourth SHOP initiative with HSBC in upstate New York," said Craig Nickerson, Freddie's vice president of community development lending. "By working together in Buffalo, Rochester, Syracuse, and now Albany, we are expanding affordable housing homeownership opportunities to some 4 million New York residents." SHOP offers consumer outreach and financial education through AHP, as well as flexible mortgage products provided by HSBC and Freddie, while focusing primarily on minorities and families who lack personal finance management skills, downpayment funds, or both. Products include Freddie's "community gold" mortgage that applies flexible underwriting and requires only $500 from the borrower's own funds, and HSBC's "community works" mortgage that allows for discounted interest rates and liberal credit criteria on either one- or two-unit properties. SHOP is part of Freddie's "Catch the Dream" national effort designed to support the Bush administration goal of adding 5.5 million minority homeowners by the end of the decade.

Alliance Capital Partners, Jacksonville, Fla., has changed its name to EverBank Financial Corp., according to the company.In addition, Alliance's primary operating businesses, First Alliance Bank and Alliance Mortgage Co., will become EverBank and EverHome Mortgage Co., respectively. Robert Clements, EverBank's chairman and chief executive officer, said the announcement reflects the company's "10-year transformation from a monoline mortgage company to a high-performing diversified financial institution." Mr. Clements said the company's strategy differs from that of banks that rely heavily on acquisitions for growth. EverBank "focuses on growth through business-to-business partnerships with leading brand names, national consumer marketing, product leadership, and customer service," he said. The company can be found online at http://www.everbank.com.

New England Realty Resources, a Boston-based company founded by James M. Murphy, has banded together with 11 other companies to form a company called Q10, Mr. Murphy told attendees at the MBA's commercial real estate finance/multifamily housing convention in Orlando.Q10, a commercial mortgage lender and servicer with 18 offices nationwide, is looking to have a presence in the 35 largest U.S. metropolitan markets, Mr. Murphy told MortgageWire, and is looking for independent owners to partner with for this purpose. Q10 has a $9.1 billion servicing portfolio and did about $4.5 billion in loan production last year, according to Mr. Murphy, a former president of the MBA. The company provides financing for first and second mortgages, mezzanine loans, joint ventures, and commercial mortgage-backed securities. Mr. Murphy told convention attendees that "the back-end of CMBS is broken" and that the CMBS industry is hurting itself by developing a "bidding frenzy for servicing rights."

The Mortgage Bankers Association and the Commercial Mortgage Securities Association are taking advantage of a "window of opportunity" to seek a loosening of restrictions on the real estate mortgage investment conduit structure, according to a speaker at the MBA's commercial real estate finance/multifamily lending convention in Orlando, Fla.Robert Vestewig, chief operating officer of GEMSA Loan Services, told a panel session that managing real estate "is not a passive task" and that REMIC rules "tend to limit substantial modifications" to commercial mortgage-backed security loans. The MBA is pursuing the changes with a letter to the chairman of the House Banking Committee, while recognizing that this is an election year and that it will be hard to have any "controversial changes" made, Mr. Vestewig said. If the changes are made, securitized commercial mortgage loans will have more flexibility and CMBS will be more competitive with whole loans, he said.

The typical American family's ability to purchase a median-priced home increased in the fourth quarter as a result of a seasonal decline in home prices and rising family income, according to the National Association of Realtors.The NAR's composite Housing Affordability Index stood at 139.2, up from 136.6 in the third quarter but down from 140.3 a year earlier. The latest index number means that the typical household in the United States had 139.2% of the income needed to purchase a home at the fourth-quarter median existing-home price, which was $171,600. NAR chief economist David Lereah said the seasonal home price decline stems from the fact that a higher ratio of singles and childless couples typically buy homes in the fourth quarter, and they generally buy more moderately priced homes. "Even so, the median price is 6.6% higher than [in] the fourth quarter of 2002, and the buying power is strong because the typical family could afford a home costing $238,900 -- well above the median price," he said. The NAR can be found online at http://realtor.org.

Companies that belong to the Mortgage Insurance Cos. of America wrote $20.7 billion of primary new insurance in December, down nearly 6% from $22.0 billion in November.However, in terms of traditional primary new insurance written, there was an increase to $18.0 billion from $17.2 billion in November. Bulk insurance decreased to $2.7 billion from $4.9 billion. Applications received continue to fall, from 154,348 to 145,213. Comparisons with statistics from December 2002 are misleading because Radian Group Inc. is no longer a member of MICA, and results prior to June 2003 include that company's data. Pool risk written totaled $96.8 million in December, down from $124.5 million in November. Pool risk in force at the end of the fourth quarter totaled $13.6 billion. After a one-month improvement, the cure/default ratio declined from November to December, from 95.5% to 83.7%. There were 45,336 cures and 54,187 defaults during the month. MICA can be found online at http://www.micanews.com.

Fitch Ratings has announced that it will continue to rate residential mortgage-backed securities that include mortgage loans originated in Cleveland and covered by the city's predatory lending ordinance.The move comes after the Court of Appeals of Ohio reinstated the city's predatory lending ordinance by staying the lower court's prior ruling that had found the ordinance to be unconstitutional. It is uncertain from the motions filed in the case whether the law in effect is the first ordinance the city passed or the second ordinance containing the amendments. Either way, there are no explicit civil penalties or assignee liability provisions in the ordinance, which is why Fitch revised its rating criteria in the wake of predatory lending legislation. The company had said it would not rate RMBS transactions containing loans produced in jurisdictions that have passed laws that could result in unlimited purchaser or assignee liability for the predatory lending practices of an originator, broker, or servicer. "The penalty cannot be assessed by the assignee, and there is no additional liability," said Michael Nelson, senior director of structured finance for residential mortgages at Fitch. "The ordinance simply prohibits predatory lenders from doing business with the city."

AmeriDream Inc., a downpayment assistance provider based in Gaithersburg, Md., has announced the imposition of a $500 cap on the processing fee paid by sellers who use its gift program.The processing fee will continue to be calculated at 0.75% of the house purchase price up to the $500 cap. Ann Ashburn, AmeriDream's president and chief executive officer, said she expects the fee change to serve as an incentive that will allow more sellers "to sell their homes to buyers who need downpayment gifts." The service fee homesellers pay to AmeriDream for every new buyer of their homes goes back into the pool of funds from which future downpayment gifts are funded. AmeriDream said it could lower the processing fee thanks to technology that enabled the DPA to switch to Internet-based application processing, which is preferred by the industry because it is faster, more cost-effective, and more convenient than filing applications by fax. Additionally, AmeriDream is establishing a call center that will enable lenders, real estate agents, settlement agents, and consumers to communicate directly with the DPA. AmeriDream provides homebuyers up to 5% of the sales price of their homes to use toward downpayment and closing costs.

The Eleventh Federal Home Loan District Cost of Funds Index for December 2003 stood at 1.902%, an 8-basis-point increase from November's 1.821%.The increase is the first in the index since June 2002. Back then, the increase capped off a small run of three consecutive increases for COFI. In April, the index rose by 7 bps. The following month it rose by 8 bps, and that was followed by a 7-bps increase. The index peaked at 2.847% before beginning the current run that put COFI below the 2% barrier. The bottom point was 102 bps below that peak. According to the Federal Home Loan Bank of San Francisco, the index was first published for July 1981, when it stood at 11.84%. The index's record high was reached in June 1982, at 12.673%. Between its high and its low, COFI had a range of 10,852 bps.

Fannie Mae and Freddie Mac have announced record multifamily investments of about $36 billion and $22.6 billion, respectively, for 2003.Fannie Mae said more than 85% of the multifamily units it financed last year were affordable to families at or below the median income in their communities. The government-sponsored enterprise said it committed $1.7 billion in multifamily equity investments that qualify for the federal Low Income Housing Tax Credit. Freddie Mac said its flow funding volume jumped from $2 billion in the first half of 2003 to nearly $7 billion by year end. It attributed the surge to changes in its pricing as well as product improvements such as alternative yield maintenance schedules and built-in interest rate caps for adjustable-rate mortgages. The GSEs can be found online at http://www.fanniemae.com and http://www.freddiemac.com.

Metropolitan Mortgage & Securities Inc., Spokane, Wash., and Summit Securities Inc. have jointly announced plans to file for Chapter 11 bankruptcy protection.The companies said the expected filing would enable them to combine and reorganize their businesses through a debt-for-equity arrangement. They said a preliminary agreement on the terms of such a plan could be reached shortly. Metropolitan Mortgage has been embroiled in controversy in recent months. Investors in securities issued by the company have filed a class action lawsuit the company's auditor, Ernst & Young, resigned because it said it could no longer rely on the representations of management; and the Securities and Exchange Commission has started an informal inquiry. C. Paul Sandifur Jr. recently resigned as chairman, president, and chief executive of Metropolitan Mortgage and was replaced on an acting basis by Irv Marcus.

Spirit Finance Corp., Scottsdale, Ariz., has completed a private offering of 36 million shares of its common stock with Banc of America Securities, raising total proceeds of $360 million.The real estate investment trust said it expects to use the net proceeds from the offering to invest in "a diversified portfolio of single tenant, free-standing commercial real estate essential to the generating of tenant sales and profits." The company was formed by Morton Fleischer, its chairman and chief executive officer, and Christopher Volk, its president and chief operating officer, who were formerly with Franchise Finance Corp. of America, Spirit said. Spirit has already used $41 million of the proceeds to purchase mortgage loans from Washington Mutual Bank, the company said. Spirit can be found online at http://www.spiritfinance.com.