Originations

First NLC Financial Services, Deerfield Beach, Fla., has launched its Black Label Mortgage Program, a new division that provides alternative-A jumbo loans to high-net-worth clients of financial institutions.Jeffrey Henschel, president of First NLC, said the company's institutional clients "appreciate the confidentiality shown to their clientele. Because we make only mortgages, they never have to worry about our competing for their clients' other financial services business." Philip A. Pike and Rick Meli are the managing directors for Black Label. The new unit offers full, stated, and no-document loans up to $5 million. There are adjustable-rate loans indexed to the London interbank offered rate and fixed-rate products with an interest-only option on all offerings.

The Market Composite Index, an overall measure of mortgage applications, fell to 649.6 on a seasonally adjusted basis during the week ended Oct. 24 from 652.8 the week before, according to the Mortgage Bankers Association of America's Weekly Mortgage Applications Survey.On an unadjusted basis, applications were up 10.4% on the week and down 29.2% from a year earlier. The Purchase Index decreased from 386.1 to 363.9 on a seasonally adjusted basis, while the Refinance Index rose from 2204.1 to 2311.8. Refinancings represented 53.3% of total applications, up from 50.5% the previous week, while adjustable-rate mortgages accounted for 26.5%. "The ARM share of applications is at its highest point in over two-and-a-half years," said Michael Cevarr, the MBA's manager of member surveys. "With little expectation of an increase in short-term rates in the near term, borrowers are reacting to the continued large spread between adjustable and fixed rates." The average contract interest rate for 30-year fixed-rate mortgages fell from 5.97% to 5.83%, and points (including the origination fee) were unchanged at 1.39 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mbaa.org.

Meanwhile, housing, financial, and philanthropic leaders have announced the completion of a $2 billion affordable housing initiative begun in 1998, and Fannie Mae has pledged to buy an additional $2.5 billion in loans over the next five years.Representatives from Self-Help (a community development group), the Ford Foundation, Bank of America, Chevy Chase Bank, and Fannie Mae gathered in Washington Oct. 28 to mark the occasion. "I commend Fannie Mae and the Ford Foundation for their vision in helping make homeownership a reality for nearly 30,000 families across the nation through this initiative," said Martin Eakes, chief executive officer of Self-Help. "Together we have helped prove that low-income families are creditworthy, with low levels of losses and foreclosures, as documented in new research conducted by the initiative." The research, conducted by the University of North Carolina, found that participating lenders experienced a 0.7% foreclosure rate over five years, below the national rate of 1.1%. Self-Help's new initiative will focus on expanding homeownership for low-income rural families by targeting areas where they have migrated for job opportunities, the organizations said.

CitiMortgage and Fannie Mae have announced the largest affordable housing lending alliance in Fannie Mae's history, which they said will provide $100 billion in affordable mortgage financing through the end of the decade.The initiative will target families with incomes at or below the median level for their communities, including minorities, new immigrants, residents of central cities and other underserved areas, and people with special housing needs, Citi and Fannie said. The partnership is part of CitiMortgage's $200 billion affordable housing commitment under its Opportunities Within Neighborhoods program. The lending initiatives will be offered nationally through all CitiMortgage affiliates, and Fannie Mae has pledged to buy all the eligible loans. Products to be offered include a Closing Cost Assistance Program; CitiAffordable Mortgage and CitiAffordable Purchase Assistance programs that provide low-downpayment options and flexible qualifying criteria; and Fannie Mae's MyCommunityMortgage low-downpayment program and Expanded Approval/Timely Payment Rewards programs. Citi and Fannie also announced the completion, two years early, of a $12 billion, five-year commitment made in 2000. CitiMortgage can be found online at http://www.citimortgage.com, and Fannie can be found at http://www.fanniemae.com.

Florida home sales and prices both hit record levels in September, according to the Florida Association of Realtors.Sales of existing single-family homes rose 34% to 18,222, up from 13,585 a year earlier, FAR said. The median home price rose 12%, to $158,800, from $141,400 a year earlier.

Sales of existing single-family homes in California rose 28% in September, and home prices rose 17.9%, compared with the levels recorded a year earlier, according to the California Association of Realtors.The median price of a home in September stood at $380,040, down 5% from a record $400,020 the month before, but still up significantly from the median price of $322,450 in September 2002. Resales totaled 631,880 in September on a seasonally adjusted annualized basis, compared with 493,800 a year earlier. CAR can be found on the Web at http://www.car.org.

Regency Centers Corp. and Correctional Properties Trust will replace Host Marriott and Prime Group Realty Trust in the S&P REIT Composite Index, according to Standard & Poor's.Host Marriott and Prime Group are being removed for suspending dividend payments since 2001, S&P said. The replacements are scheduled to occur after the close of trading Oct. 31. The rating agency can be found online at http://www.standardandpoors.com.

Dick Gravino, president of PCFS Mortgage Resources and executive vice president of The Provident Bank, will retire at the end of the year, Provident has announced.Vince Rinaldi, Provident's executive vice president, has been named to succeed Mr. Gravino, the bank said. Mr. Rinaldi will remain president of Information Leasing Corp., another Provident subsidiary. Mr. Gravino joined Provident in 1995 and founded PCFS Mortgage Resources. Before joining Provident, he worked in the financial services industry for 32 years, 27 of them with Household Finance, the company said. PCFS Mortgage can be found on the Web at http://www.pcfs.com.

C. D. Davies has been named president of Wachovia Mortgage Corp., Charlotte, N.C., succeeding Debra Warren, who retired in May.Mr. Davies, currently chief operating officer of Wachovia Mortgage, has been employed by Wachovia Corp., the parent company, for 15 years. During that time he has held a variety of posts, most recently as leader of wholesale lending and secondary marketing, Wachovia said. The company can be found online at http://www.wachovia.com.

Delinquencies in office and retail loans backing commercial mortgage-backed securities monitored by Fitch Ratings jumped more than 20% in the third quarter, according to the rating agency.Office delinquencies rose 27%, and retail delinquencies climbed 24%, Fitch reported. Despite these increases, however, Fitch's CMBS Loan Delinquency Index remained "essentially unchanged" at 1.61% from the previous quarter, in large part because hotel delinquencies fell 15%, the rating agency said. Delinquencies for other loan types in the third quarter were as follows: industrial, up 12%; health care, up 7%; and multifamily, up 5%.

Candlewood Hotel Co., Wichita, Kan., has announced that it will cease operations after completing two asset sale agreements that will result in the sale of substantially all its operating assets to Hospitality Properties Trust and InterContinental Hotels Group.Candlewood said it will sell 12 Candlewood Suites hotels to HPT for $90 million. In a separate transaction, the company said it will sell the rights to the Candlewood Suites brand and certain other trademarks, and assign the licensing rights for all franchise agreements, to IHG's subsidiary Six Continents Hotels for $15 million. Candlewood will simultaneously terminate its lease and management agreements with HPT, a real estate investment trust based in Newton, Mass. After the transactions, Candlewood "will retain limited operating assets and anticipates ceasing business operations in a statutory dissolution," the company said. Meanwhile, HPT said it has entered a new management agreement with IHG for the operation of all the Candlewood hotels owned by HPT, which will total 76 after it acquires the 12 being sold by Candlewood. The companies can be found online at http://www.candlewoodsuites.com, http://www.hptreit.com, and http://www.ichotelsgroup.com.

Scorex, an Atlanta-based provider of decision systems, has announced the launch of a new consulting service designed to help lenders carry out automated credit line increase programs to recover lost revenue or increase profit margins.Credit Line Optimization Consulting will analyze demographic data along with current credit scores, payment profiles, and competitive information to design a portfolio-specific strategy, Scorex said. The service "alerts credit-granting institutions to the untapped potential in their portfolios," said company president Steve Burnside. "This cost-justified solution enables financial institutions to execute a line increase strategy with minimal involvement of their information technology department." Scorex, a division of Experian, can be found online at http://www.scorex.com.

Fitch Ratings' recent announcement that it will no longer rate loan pools containing Oakland mortgages "sets the stage for a likely exodus" of lenders from the city, according to the American Financial Services Association.AFSA announced that it has appealed a recent decision upholding the Oakland ordinance, in an attempt to block it from taking effect.

Tarragon Realty Investors Inc., a New York-based real estate investor and developer of for-sale housing and rental communities, has announced the formation of a wholly owned subsidiary, Tarragon Mortgage Co. LLC, to provide financing for its homebuyers.The new venture will begin providing mortgages at the company's Tuscany on the Intracoastal condominium in Boynton Beach, Fla. William Friedman, president of Tarragon, said the company's for-sale housing division will benefit "because we will now be able to monitor and manage one aspect of the sale transaction that, until now, had been out of our control. And our shareholders will win because this in-house capability will add efficiency and speed to the closing process, thereby improving our internal rate of return." Tarragon Mortgage will be located in Fort Lauderdale, Fla., with satellite offices at various projects as needed. The parent company can be found online at http://www.tarragonrealty.com.

The PMI Group Inc., Walnut Creek, Calif., has agreed to sell its subsidiary American Pioneer Title Insurance Co. to a subsidiary of Fidelity National Financial Inc., Jacksonville, Fla., for $115 million in cash.PMI said the sale is part of a strategic plan to position itself as a global provider of credit enhancement. APTIC is licensed as a title insurance underwriter in 45 states with "significant agency operations and computerized title plant assets" in Florida, said FNF, whose subsidiary Chicago Title Insurance Co. will acquire the company. FNF said APTIC will operate under FNF's Ticor Title brand, and projected that it will ultimately save at least $5 million in annual costs that were previously paid to third parties in Florida for title information." The APTIC acquisition vaults FNF to the No. 1 market share position in the state of Florida, with $321 million in pro forma 2002 title premiums and 28% market share," said William P. Foley II, FNF's chairman and chief executive officer. "We will own the No. 1 market share position in each of the four states -- California, Texas, Florida, and New York -- that produce nearly 50% of all title insurance premiums in the country." The companies can be found online at http://www.pmigroup.com and http://www.fnf.com.

Bank of America, Charlotte, N.C., the nation's fifth-largest residential lender, is buying FleetBoston Financial for almost $47 billion in stock, a move that will expand BoA's presence in New England and create the nation's second-largest bank.However, BoA's purchase of Fleet will not dramatically alter the residential mortgage landscape. Two years ago FleetBoston jettisoned its mortgage subsidiary, Fleet Mortgage Group, selling it to Seattle-based Washington Mutual for $660 million. (Included in the FMG sale was $138 billion in servicing rights.) After the sale of its mortgage affiliate, FleetBoston continued to originate loans under the Fleet name (mostly in the bank's imprint) and in 2002 funded $23.1 billion in product, ranking 23rd nationwide, according to National Mortgage News' Home Mortgage Disclosure Act database. Besides being the fifth-largest residential originator, BoA is also the fifth-largest servicer, with a portfolio of $250 billion in receivables (at June 30). BoA will pay $45 per share for Fleet, or 41.5% above Fleet's closing price on Oct. 24. BoA is the No. 3-ranked commercial bank in terms of assets, with $737 billion, while Fleet ranks seventh with $196 billion. The combined bank will employ 180,000 full-timers and will have 5,700 banking offices in the United States and in foreign countries.

New-home sales were flat in September, but still close to the record pace set in June, according to a government report.The U.S. Census Bureau reported that sales of new single-family homes came in at a seasonally adjusted annual rate of 1.145 million in September, down a mere 2,000 units from the August sales pace. The September data show a large jump in the average sales price of new homes but no increase in the median sales price, according to Michael Carliner, an economist at the National Association of Home Builders. "It indicates that we are having a fair amount of strength in sales in the high end of the market," he said. New-home sales were up sharply in the Northeast and the West, which are high-cost areas, while sales were down in the Midwest and the South. This year will be a record year for newly constructed homes, but the pace of new-home sales probably peaked at 1.2 million in June, the NAHB economist said.

Existing-home sales jumped 3.6% in September to a new monthly and quarterly record, according to the National Association of Realtors.The NAR reported that sales of previously owned homes rose from a seasonally adjusted annual rate of 6.46 million in August to 6.69 million in September. NAR chief economist David Lereah said the housing market is "red hot" and that he would not be surprised if October sales set a new record. The NAR report shows that house prices rose by 9.1% over the past 12 months and the inventory of unsold homes is at a lean 4.3-month supply. "This is healthy home price appreciation," Mr. Lereah said, considering that "robust demand" is outstripping supply. But it also poses risks in some local markets where prices may decline when demand falls off. "The housing sector should remain healthy for the next 12 months, and we are looking for very, very healthy numbers," Mr. Lereah said.

Four classes of COMM 2001-FL5 commercial mortgage pass-through certificates have been downgraded by Fitch Ratings and removed from Rating Watch Negative.The downgrades were as follows: class G, from BBB-minus to BB; class K-HH, from BBB-minus to BB-minus; and class L-HH, from BB-plus to B; and class M-HH, from BB to B-minus. In addition, Fitch upgraded two classes in the deal, affirmed the ratings on 10 other classes, and removed one of the 10 from Rating Watch Negative. The rating agency attributed the downgrades chiefly to declines in the performance of two hotel loans: the Hyatt Regency in Houston and the Irvine Marriott in Irvine, Calif. "The performance decline at the Houston Hyatt is particularly severe," Fitch said. ".... Based on servicer reports, actual net cash flow dropped 60% since issuance." In addition, Fitch expressed concern about refinance risk, since all the loans mature in 2004. The rating agency can be found on the Web at http://www.fitchratings.com.

The National Multi Housing Council has reported that its latest quarterly survey of apartment market conditions indicates that the multifamily sector could be on the verge of recovery, based on responses from senior multifamily executives.The Washington, D.C.-based trade association said three of the four indices used to measure changes in apartment market conditions registered an over-50 reading in its October survey, which means that more survey respondents see improving conditions than worsening conditions. "These are the most positive numbers we have seen since the onset of the 2001 recession," said Mark Obrinsky, the NMHC's vice president of research and chief economist. "If the economy continues to strengthen and employment finally starts to bounce back, then we can expect to see demand for apartment residences rise and vacancy rates fall." The NMHC's market tightness, sales volume, and equity financing indices all rose for the period. The association's debt financing index was the only one that dipped, falling to 46, which the NMHC said is probably the result of higher mortgage rates.