Originations

The Port Authority of New York and New Jersey and Larry Silverstein have come to an agreement that will allow the New York City developer to repay a $563 million commercial mortgage loan that GMAC Commercial Mortgage Corp. made in 2001 to partly finance Mr. Silverstein's purchase of a 99-year lease interest in the World Trade Center, according to GMACCM.The loan was made to World Trade Center Properties, an affiliate of Silverstein Properties, and has been securitized into the commercial mortgage-backed securities market, with GMACCM retaining a portion of the loan. "The agreement to pay off GMACCM is subject to other conditions," the Horsham, Pa.-based commercial mortgage lender said. "First, an agreement between the Port Authority and Westfield must be reached regarding the future of the retail space. Second, the bondholders of the GMACCM loan will have to consent to the payoff." The payoff could occur as early as December, the company said. As of MortgageWire's deadline, a spokesman for Mr. Silverstein was not available for comment, and calls placed to the Port Authority had not been returned.

North Carolina has issued very restrictive guidance on "net branching" that is expected to lead to a crackdown on mortgage bankers or brokers who maintain loose affiliations with loan officers who operate out their homes.A declaratory ruling issued Nov. 6 by the North Carolina Office of the Commissioner of Banks points out that the state legislature considered net branching when it passed the Mortgage Lending Act of 2001. That law, which went into effect July 1, 2002, presumes accountability on the part of mortgage lenders and brokers who sponsor net branches for the actions of the loan officers in those branches. "To the extent that a licensee seeks to shift responsibility and accountability to the branch manager and away from the licensed firm which purports to operate a location as a branch, such arrangement is unlawful under the Act," the Nov. 6 ruling says. The ruling says it is unlawful for a loan officer to operate out of his or her residence unless the lender has licensed that branch and designated a qualified person to supervise it.

The Pacific Exchange has announced the initiation of trading in options on Accredited Home Lenders Holding Co., a San Diego-based subprime lender and servicer.The options will trade on the March expiration cycle, with limits set at 31,500 contracts. The exchange can be found on the Web at http://www.pacificex.com.

LaSalle Hotel Properties, Bethesda, Md., has announced the closing of a $215 million senior unsecured bank facility.The new three-year line of credit replaces the company's current credit facility and comes with "improved" terms and pricing, according to LaSalle's chief financial officer, Hans Weger, although pricing details were not disclosed. The facility carries a one-year extension option. The co-lead arrangers of the facility were Bank of Montreal, the administrative agent, and Fleet National Bank, the syndication agent. LaSalle, a real estate investment trust, can be found online at http://www.lasallehotels.com.

Roger Haughton, chairman and chief executive officer of The PMI Group Inc., has been elected to the board of directors of Habitat for Humanity International.Habitat board members typically serve two three-year terms, PMI said. Mr. Haughton was elected at a recent Habitat board meeting in New Zealand. He has served as PMI's chairman since 1998, after becoming president and CEO when the company went public in 1995. PMI said it has built, sponsored, or contributed to more than 50 Habitat homes worldwide over the past decade.

Fannie Mae has announced the promotion of six company officers, including five vice presidents.Emmanuel Bailey, previously director of human resources, has been named vice president for human resources. Joy Cianci, formerly a principal in Fannie Mae's electronic business division, has been named managing director for lender management and operations in e-business. Amy Edwards, previously a director in the controller's office, has been named vice president for e-business financial and business services. Ann Eiler, formerly a director of accounting and audit, has been named vice president for audit. Thomas King, previously regional counsel for the Chicago office, has been named vice president and deputy general counsel for strategic business initiatives. And Charles Rumfola, formerly director of marketing, has been named vice president for manufactured housing. Fannie Mae can be found online at http://www.fanniemae.com.

Morgan Stanley Real Estate has completed the acquisition of some of Lend Lease's U.S. real estate equity investment advisory businesses, according to Morgan Stanley.The terms of the deal -- involving Lend Lease's Prime Property Fund, its Arch Street series of multifamily funds, and a group of individual accounts -- were not disclosed. The acquisition has pushed the level of U.S. real estate assets being managed by Morgan Stanley to $19 billion, including $10 billion of assets from this deal, according to the company. Owen D. Thomas, global head of Morgan Stanley Real Estate, said the acquisition would augment the company's "already strong presence in opportunistic and real estate securities investing." E. Davisson Hardman, a senior manager on Morgan Stanley's real estate investment team, will be responsible for the company's expanded U.S. real estate investment businesses.

Class H of Prudential Securities Secured Financing Corp.'s commercial mortgage pass-through certificates, series 1995-MCF2, has been downgraded from C to D by Fitch Ratings.In addition, the ratings on six other classes in the deal were affirmed. The downgrade was attributed to $3.6 million in losses (out of a total loss of $6.3 million) that were applied to class H at the October distribution. The loss was due to the disposition of the Mountain Creek Manor loan, which was collateralized by a health care property in Chattanooga, Tenn.

Fitch Ratings has placed the senior unsecured note and preferred stock ratings of Shurgard Storage Centers Inc. on Rating Watch Negative, citing the resignation of the real estate investment trust's independent auditor.The resignation of Deloitte & Touche LLP could delay the filing of Shurgard's financial statements beyond Nov. 29 and result in a technical default under the Seattle-based REIT's unsecured bond covenants, Fitch said. Shurgard would then have only 60 days, until Jan. 28, to cure the breached covenant and avoid a default. "It is likely that Shurgard, like other issuers who have been put in this situation, will need to seek waivers from its bondholders," the rating agency said. Fitch can be found on the Web at http://www.fitchratings.com.

Commercial and multifamily mortgage lending set a new record in the third quarter, totaling $29.7 billion, up from $29.5 billion in the second quarter, according to the Mortgage Bankers Association.Third-quarter originations are also up 45% from the third quarter of last year, the MBA said. If this trend continues, loan production for the year could "easily exceed" $100 billion, the association said. Loans on all property types increased in the third quarter compared with those of a year earlier. Industrial park lending rose 64%, retail property lending 60%, office lending 58%, and multifamily lending 29%. MBA chief economist Douglas Duncan said that "the upturn in long-term rates in mid-June caused a number of borrowers to lock in deals that closed during the third quarter." In addition, the most recent employment trends "bode well" for property revenues, he said. Multifamily lending accounted for 41% of the originations. Fannie Mae and Freddie Mac led the pack in multifamily lending, and their total share rose 42% from that of a year earlier.

Ventas Inc., Louisville, Ky., and ElderTrust, Wilmington, Del., have announced a merger agreement under which Ventas will acquire all outstanding common shares of ElderTrust in a cash transaction valued at $184 million.After completing the transaction, Ventas would own ElderTrust's 18 health care and senior housing assets, whose principal tenant is the eldercare and therapy business unit of Genesis Healthcare Ventures, according to the two real estate investment trusts. ElderTrust owns approximately 96% of the partnership units in ElderTrust Operating LP, which owns all the ElderTrust properties. Ventas said it expects to acquire all the limited partnership units in ETOP directly from their owners at $12.50 per share. The REITs can be found online at http://www.ventasreit.com and http://www.eldertrust.com.

New Century Mortgage Corp., Irvine, Calif., has announced that it expects to make 60% fewer loans in New Jersey after the state's predatory lending law takes effect Nov. 27.The subprime lender said the new law will reduce access to mortgage financing for thousands of New Jersey borrowers, price many prospective homebuyers out of the market, and spur higher interest rates for loans covered by the law. "New Century will reduce purchase-money and refinance lending in New Jersey because the new law will significantly undercut the secondary market for loans made in New Jersey and creates unacceptable legal and reputational risks," the company said. "Secondary-market investors, who purchase substantially all of New Century's loans and thus free up the company's capital for additional lending, previously stopped purchasing New Century's loans in states that passed similar laws." Terry Theologides, executive vice president for corporate affairs and general counsel at New Century, said the company supports "genuine consumer protection statutes," but that the New Jersey law "will harm the very people it purports to help." The company can be found online at http://www.ncen.com.

Responding to expected RESPA reform and the growing demand for one-fee mortgages, First American Corp., Santa Ana, Calif., has announced the introduction of what it calls the mortgage industry's first "consolidated bundle of products and services to complete home purchase transactions."The company said the Purchase Money Bundle will feature a single fixed price and will integrate all the origination and settlement services required by mortgage lenders to originate mortgages in purchase transactions, including: credit reporting, flood zone determination, property valuation, title insurance, and closing services. A version of the Purchase Money Bundle minus title services will also be available to title agents wishing to offer a bundle of real estate information products. First American says its purchase-money package is the first in the industry, but there are lenders that are offering bundled services programs, the most well known being ABN Amro Mortgage Group, Ann Arbor, Mich., and its OneFee program. The Department of Housing and Urban Development has called for the packaging of settlement services in its proposal to reform the Real Estate Settlement Procedures Act. First American can be found online at http://www.firstam.com.

The average 30-year fixed mortgage rate fell to 5.83% for the week ending Nov. 21 from 6.03% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate fell from 5.39% to 5.17%, and the average rate for one-year Treasury-indexed adjustable-rate mortgages dipped from 3.76% to 3.72%. Fees and points averaged 0.6 points for 30-year fixed-rate mortgages and 0.7 points for ARMs and 15-year FRMs. "Over the past week, several high-ranking Federal Reserve officials gave speeches indicating that inflation remains a non-event," said Frank Nothaft, Freddie Mac's chief economist. "One official even suggested [that] the possibility that inflation might go even lower is more of an issue for the Fed at the moment. Consequently, the bond market rallied, and this caused mortgages rates to fall." A year ago, the average 30-year and 15-year fixed rates were 6.03% and 5.44%, respectively, and the average one-year ARM rate was 4.14%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

AmeriDream Inc., a downpayment gift provider based in Gaithersburg, Md., has announced a partnership with the Outer Banks Home Builders Association to create the Hurricane Isabel Rebuilding Fund.The fund will assist residents of North Carolina's Outer Banks in repairing or rebuilding their homes. AmeriDream said it has donated $35,000 to start up the fund and, along with the association, has invited real estate agents, mortgage lenders, brokers, homebuilders, and other real estate industry professionals to contribute. "The damage we have seen on Hatteras Island is devastating," said Maxine Rossman, executive director of the OBHBA. ".... The homes of many residents of Hatteras Village were lost completely or destroyed beyond repair, so we are hoping to raise funds that will help those who are most in need." AmeriDream can be found on the Web at http://www.ameridream.org.

American Residential Mortgage, Cherry Hill, N.J., has been awarded a grant of approximately $745,000 from the New Jersey Department of Labor.American Residential is building its new headquarters in Mount Laurel, and the grant from the state reimburses the company for costs associated with training new employees and enhancing the skills of existing employees. Jack G. Mondel, chairman of American Residential, said "maintaining the high skill level of our employees is essential to providing the utmost service to our many valued clients. Moreover, the grant will enable use to hire more New Jersey employees, which will contribute to our overall growth." American Residential Mortgage is the trade name of American Mortgage Express Corp., and originates through retail and wholesale channels. It is not related to a pair of similarly named companies based in California.

Freddie Mac has announced that its latest investment in a project backed by Low Income Housing Tax Credits brings its total LIHTC investments since 1988 to more than $3 billion.The latest equity investment of $5 million was in the rehabilitation of Jackson Park Terrace, a rental housing community on the south side of Chicago. "This project is preserving vital affordable housing while supporting neighborhood revitalization efforts," said Daryl Hall, vice president of multifamily asset management at Freddie Mac. "We have found LIHTC investments to be among the most effective ways we can expand the availability of affordable rental housing to people who need it most." Freddie Mac said it invests in LIHTC funds sponsored by nonprofit and for-profit syndicators, buys tax credits in the secondary market, and has its own investment fund, the Freddie Mac Equity Plus fund. Freddie Mac can be found online at http://www.freddiemac.com.

Fitch Ratings has expressed concern that "participated" commercial mortgage-backed securities loans, in which a single first-mortgage loan is split into more than one note and held by different parties, are becoming more and more complex.The rating agency says agreements that require multiple parties in servicing and workout decisions will frustrate borrowers, delay necessary action to preserve the collateral, increase trust expenses, and result in additional and unnecessary losses. "Fitch is concerned that recent participated loan structures are inefficient and the lack of uniform intercreditor provisions and servicing procedures are causing confusion in the market," said Daniel Chambers, a senior director at Fitch. In addition, the rating agency is concerned that "history will repeat itself, and the lessons we learned with syndicated loans from the early '90s will be forgotten." It also worried that the "excessive coordination required among servicers and multiple subordinate investors will slow servicer responsiveness, and delays will inevitably lead to greater loan losses." Fitch is seeing more participations in the post-9/11 environment, with issuers more inclined to split large loans so as to mitigate "event risk and diversity concerns."

Prime Retail Inc., Baltimore, has reported that its shareholders have voted in favor of its acquisition by an affiliate of The Lightstone Group, a New Jersey-based real estate company.Prime Retail, a real estate investment trust, said the total acquisition price is $115.5 million, plus the assumption of about $511 million of secured debt by the buyer. Prime Retail series A preferred shareholders are to be paid $18.40 per share in cash, the REIT's series B preferred shareholders $18.169 per share in cash, and the company's common shareholders $0.17 per share in cash. The company's series A preferred shareholders, mainly Merrill Lynch and Fortress Investment Trust II, had expressed their dissatisfaction with Prime's initial offer of $16.25 per share, causing the REIT to revise it upward. The payouts to the series B and common stockholders have been pared down, however, from an initial offer of $8.66 per share and $0.18 per share, respectively. The merger is expected to go through in the next month. Responding to this development, Prime Retail stock moved to $0.162 per share around midday Wednesday, up 16% from Tuesday's close of $0.14 per share. The REIT can be found online at http://www.primeretail.com.

The Market Composite Index, an overall measure of mortgage applications, rose to 663.2 on a seasonally adjusted basis during the week ended Nov. 14 from 626.0 the week before, according to the Mortgage Bankers Association of America's Weekly Mortgage Applications Survey.On an unadjusted basis, applications were down 6.6% on the week and down 51.9% from a year earlier. The Purchase Index rose from 375.4 to 425.9 on a seasonally adjusted basis, while the Refinance Index declined from 2084.2 to 2043.9. Refinancings represented 48.1% of total applications, down from 50.9% the previous week, while adjustable-rate mortgages accounted for 27.5%, their highest share in more than three years. The average contract interest rate for 30-year fixed-rate mortgages dropped from 5.94% to 5.64%, and points (including the origination fee) rose from 1.39 to 1.54 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mbaa.org.