Originations

Cowlitz Bank, Longview, Wash., has announced plans to close two offices of its Bay Mortgage division and lay off 32 employees as part of a realignment of the division.Cowlitz said the plans call for closing its offices in Seattle and Bellevue, Wash., while continuing the operation of its mortgage origination business in Longview and Vancouver, Wash., and Portland, Ore. The realignment is aimed at redirecting company resources toward expanding its commercial banking business. "The decline in refinance volume has reduced the profitability of Bay Mortgage as it is currently structured, and the effort required to grow our mortgage market share in Bellevue and Seattle was utilizing an excessive amount of corporate resources," said Rich Fitzpatrick, president and chief executive officer of Cowlitz Bank. The bank also announced that the declining mortgage market is likely to result in an impairment in the fourth quarter of the carrying value of goodwill related to the purchase of Bay Mortgage.

Sutter Holding Co., San Francisco, has closed on the acquisition of Progressive Lending LLC, a mortgage bank with offices in Washington and Arizona.The purchase price of $1.5 million includes $500,000 in cash, a promissory note for $500,000, and 49,500 shares of common stock, Sutter said. The price is subject to reduction if Progressive does not earn at least $500,000 in each of the two years after closing. Progressive's senior management has agreed to stay with the company. "We believe this is the ideal time to partner with a company like Sutter in order to take advantage of the current turmoil in the mortgage origination industry," said William S. "Steve" Howard, president of Progressive Lending. Progressive is licensed to do business in California, Oregon, Idaho, Colorado, Illinois, and Montana as well as Washington and Arizona.

Corporate Office Properties Trust, a real estate investment trust based in Columbia, Md., has priced an offering of 2 million shares of 7.5% series H cumulative redeemable preferred stock at $25 per share.Credit Suisse First Boston and Wachovia Securities are the joint book-running managers of the issue. The REIT can be found online at http://www.copt.com.

Vacancy rates in the U.S. office market should decline gradually over the next three years from this year's peak of about 17.5%, according to Prudential Real Estate Investors.In a recent research report, PREI said some markets will recover more rapidly than others, and that investors may be able to find opportunities for greater returns in certain markets as vacancy rates peak and rents begin to stabilize. The supply of new offices has plunged since 2001 and should remain "constrained" for several years before the supply pipeline starts picking up, the company says. "Supply growth should remain subdued, and tenant demand should rise as employment growth resumes," said Youguo Liang, a managing director in PREI Research. "Office vacancy rates should fall, allowing property owners to raise rents as the supply-and-demand balance returns. For investors seeking value-added returns, the office market recovery will provide opportunities to buy assets with leasing risk in high-growth markets." The report, "The Office Market Recovery Ahead," can be found online at http://www.prudential.com/prei.

Mortgage originations will drop by 50% from the third to the fourth quarter, and mortgage lenders can expect loan volume in 2004 to be half of this year's (projected) record $3.67 trillion harvest, according to Fannie Mae economists.Fannie Mae's mortgage market outlook shows loan production dropping from $1.18 trillion in the third quarter to $615.9 billion in the fourth quarter. Meanwhile, Fannie Mae chief economist David Berson is warning lenders that they will have to get used to half a loaf in 2004. He is predicting that loan volume will total $1.75 trillion, down 52% from this year's projected total. "Refinance originations will plunge in 2004 as mortgage rates rise -- down by about 77% to only 590.3 billion," according to the secondary-market agency's latest forecast. Home sales will continue at a strong pace in 2004, but fall short of this year's record. Purchase originations in 2004 will be "close to this year's estimated record of $1.17 trillion," Fannie said. Fannie Mae can be found online at http://www.fanniemae.com.

Bill Dallas is teaming up once again with CIVC Partners, Chicago, to purchase Oakmont Mortgage, Woodland Hills, Calif.The terms of the deal were not disclosed. Oakmont is a privately held company that had been owned by Jack Wise, who founded it in 1989. Mr. Dallas and CIVC had teamed up once before, in 1996, when Mr. Dallas reacquired First Franklin Financial, San Jose, Calif. That company was sold to National City Corp., Cleveland, in July 1999. Mr. Dallas left First Franklin in the summer of 2001. Oakmont is a nonconforming wholesaler that has over $1 billion in originations so far this year, after doing $570 million last year. Mr. Dallas will become chairman, president, and chief executive of Oakmont.

United Financial Mortgage Corp., Oak Brook, Ill., has announced the pricing of a public offering of approximately 2.04 million shares of common stock at $6.67 per share.The gross proceeds totaled approximately $13.6 million. Maxim Group LLC, the sole underwriter, has been granted an option to buy approximately 306,000 additional shares from the company's largest shareholder to cover any overallotments, UFMC said. UFMC, a retail and wholesale mortgage lender, can be found on the Internet at http://www.ufmc.com.

Liberty Property Trust, Malvern, Pa., has announced that it has raised approximately $99.6 million in a public offering of 2.7 million shares of beneficial interest.The real estate investment trust said it has granted the underwriter, Goldman, Sachs & Co., an option to buy up to 405,000 additional shares. The REIT can be found online at http://www.libertyproperty.com.

Edward A. Stokx has been named chief financial officer of PS Business Parks Inc., Glendale, Calif.Mr. Stokx was previously CFO of Center Trust and was instrumental in completing its January 2003 merger with Pan Pacific Retail Properties, PS Business Parks said. He replaces Jack Corrigan as CFO at PS Business Parks, but Mr. Corrigan has agreed to stay on for a few months to ensure a smooth transition, the company said. PS Business Parks, an equity real estate investment trust, can be found online at http://www.psbusinessparks.com.

David L. Carneal has been promoted to executive vice president and co-chief operating officer at Cornerstone Realty Income Trust Inc., Richmond, Va., and Gus G. Remppies has been promoted to EVP and chief investment officer.Mr. Carneal was previously senior vice president of operations at the real estate investment trust, and Mr. Remppies was senior vice president of acquisitions, the REIT said. Mr. Carneal, 39, joined Cornerstone in 1996, and in 1998 he became senior vice president of Apple Residential Inc., which merged into Cornerstone in 1999. Mr. Remppies, 43, joined Cornerstone in 1995 and has served as SVP of acquisitions since 1998. The company can be found online at http://www.cornerstonereit.com.

LandAmerica Financial Group Inc., Richmond, Va., has announced the promotions of Janet A. Alpert from president to vice chairman and Theodore L. Chandler Jr. from chief operating officer to president and COO.The company also named Michelle Gluck executive vice president, general counsel, and corporate secretary. Ms. Alpert is a 34-year veteran of the company and has served as president since 1993. Mr. Chandler joined LandAmerica in 2000, and Ms. Gluck joins the company from Kmart Corp., where she was vice president, associate general counsel, and assistant secretary. LandAmerica, a provider of real estate transaction services, can be found on the Web at http://www.landam.com.

The CreditVantage division of Fitch Risk, an affiliate of Fitch Ratings, and Property & Portfolio Research Inc. have announced an alliance to develop and market commercial real estate credit models.The companies said the alliance will leverage PPR's CRE analytics and Fitch Risk's quantitative modeling expertise and data to offer a model that measures probability of default, loss given default, and expected loss for a loan, portfolio, or securitized pool. The model is calibrated using an extensive sample of defaulted and nondefaulted commercial real estate loans. "As commercial real estate market fundamentals continue to deteriorate and Basel II implementation draws closer, real estate lenders, regulators, and risk managers recognize a growing need for an empirically validated model to quantify and effectively manage commercial mortgage risk," the companies said. They can be found online at http://www.fitchrisk.com and http://www.ppr.info.

Prudential Mortgage Capital, Newark, N.J., is expanding its affordable housing financing activities through a newly formed affiliate, Red Stone Partners.In partnership with Red Stone, a New York-based affiliate of Prudential Real Estate Investors, PMC will provide developers nationwide with tax-exempt financing, PMC said. PMC president David Twardock said the company has seen "increased demand for tax-exempt bonds" and sees an opportunity to "leverage our overall platform and build on the strength of our originations team." The relationship seeks to combine PMC's senior lending abilities with Red Stone's equity and mezzanine capital lines. Red Stone, which has been capitalized through some undisclosed institutional investors, will focus on the credit enhancement of tax-exempt multifamily bonds to aid the acquisition, refinancing, or construction/rehabilitation of multifamily housing properties. The partnership will offer borrowers nonrecourse financing with up to 95% loan-to-value ratios on single assets of $5 million and up, and on portfolios of up to $350 million. The partnership's products are to be offered through PMC's originations team.

The average 30-year fixed mortgage rate fell to 5.88% for the week ending Dec. 12 from 6.02% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate fell from 5.36% to 5.24%, and the average rate for one-year Treasury-indexed adjustable-rate mortgages was unchanged, at 3.77%. Fees and points averaged 0.6 points for 15-year fixed-rate mortgages and ARMs and 0.7 points for 30-year FRMs. "Mortgage rates continue to be spectacularly low at present, especially when you consider that a generation ago, the 30-year fixed-rate mortgage rate was triple today's rates," said Frank Nothaft, Freddie Mac's chief economist. "Not only does it look like the annual 30-year rate for 2003 will fall to the lowest level in the 32-year history of our survey, but next year's rates won't be a lot higher, according to our December forecast." A year ago, the average 30-year and 15-year fixed rates were 6.04% and 5.46%, respectively, and the average one-year ARM rate was 4.18%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

Brandywine Realty Trust, Plymouth Meeting, Pa., has entered into a joint venture with the Australia-based Macquarie Office Trust and has contributed two office buildings to the venture.The two fully occupied class A office properties in Wilmington, Del., are valued at $112.8 million, and have a total of 632,797 square feet, Brandywine said. The real estate investment trust will retain a 20% interest in the venture and Macquarie will have an 80% interest. The retail REIT has used about $53.4 million of the cash proceeds to repay the mortgage debt on the properties and expects to use the rest partly to repay borrowings under its line of credit. The venture has obtained $74.5 million of five-year, fixed-rate mortgage debt on the properties, Brandywine said.

E. Todd Chamberlain has been named president and chief operating officer of Regions Mortgage, Montgomery, Ala.Mr. Chamberlain was most recently the manager of government-sponsored enterprise relations at United Guaranty Insurance, Greensboro, N.C. He was previously executive vice president of business development and, later, of production support for Columbia National Mortgage, Regions said. Mr. Chamberlain has more than 20 years of banking and mortgage banking experience. Regions Mortgage is a division of Regions Bank, the primary subsidiary of Regions Financial Corp., Birmingham, Ala.

Three well-known mortgage professionals have announced the launch of the 1st Reverse Mortgage Store in Oak Brook, Ill., which will be devoted exclusively to supplying reverse mortgage loan products and services.The managing partners of the office are David J. Cesario, Ralph E. Rosynek Jr., and Terry R. Bivins. Mr. Cesario was most recently senior managing partner and co-owner of 1st Metropolitan Mortgage Co., and he was previously national director of training for RBC Mortgage Corp. Mr. Rosynek is a former owner and president of Margo Financial Services LLV (a division of Argo Federal Savings Bank) and of Shoreline Bancorp LLC. Mr. Bivins was most recently a national sales manager in wholesale lending, and he founded a retail mortgage origination company, Ficus Financial Services Inc., in 1983 and co-founded a wholesale lending company, EQ Financial, in 1992. The new reverse mortgage company can be found online at http://www.1streverse.com.

PMI Mortgage Insurance Co., a subsidiary of The PMI Group Inc., Walnut Creek, Calif., has announced that it will promote L. Stephen Smith to chief executive officer as of Jan. 1, 2004.Mr. Smith retains his current titles as president and chief operating officer of The PMI Group and chairman of CMG Mortgage Insurance Co., its joint venture with CUNA Mutual. In his new position, Mr. Smith will be responsible for the overall management of PMI Mortgage Insurance and represent the company in the Mortgage Insurance Cos. of America. He started with PMI in 1979, and in 1998 took over the No. 2 slot at PMI Group behind W. Roger Haughton, who remains the parent company's chairman and chief executive.

Sen. Hillary Rodham Clinton, D-N.Y., told an awards ceremony in New York City Dec. 9 that she will introduce legislation that would increase the loan limits of the Federal Housing Authority and enable more New York households to qualify for FHA loans.Speaking at the 30th Annual Awards Luncheon hosted by the New York Housing Conference and the National Housing Conference, Sen. Clinton said the FHA Single Family Loan Limit Adjustment Act of 2003 would increase the FHA loan limit to 100% of the area median home price, which in New York is up to $310,000, and eliminate the Fannie- and Freddie-imposed 87% ceiling on such loans. Under current law, FHA loans are permitted for up to 95% of the area's median home price, but loans cannot exceed 87% of the Fannie and Freddie national limit, which will be at about $290,000 beginning in January. "It may not mean much for Cleveland, Ohio, or Detroit, Michigan," she said, "but in New York this would increase the number of homes eligible by nearly 900,000."

The Market Composite Index, an overall measure of mortgage applications, fell from 685.1 to 601.6 on a seasonally adjusted basis during the week ended Dec. 5 as the Refinance Index fell to its lowest level in 18 months, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.On an unadjusted basis, applications dropped 22.3% on the week and were down 33.6% from the level of a year earlier. The Purchase Index fell from 441.8 to 399.8 on a seasonally adjusted basis, while the Refinance Index dropped from 2100.0 to 1775.5, its lowest level since June 2002. Refinancings represented 49.4% of total applications, down from 50.0% the previous week, while adjustable-rate mortgages accounted for 29.3%. The average contract interest rate for 30-year fixed-rate mortgages fell from 5.93% to 5.76%, and points (including the origination fee) declined from 1.45 to 1.38 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mortgagebankers.org.