Originations

Freddie Mac has launched a credit education initiative for Hispanics and Fannie Mae has introduced mortgage options aimed at Hispanics and other "underserved" groups.Both new programs were announced at the annual conference of the National Association of Hispanic Real Estate Professionals in Austin, Texas. Freddie Mac said its joint education initiative with NAHREP involves CreditSmart Espanol workshops that will be provided by NAHREP members in select markets. The free classes -- an expansion of Freddie Mac's trademarked CreditSmart curriculum -- will teach consumers credit and money management skills, with a special focus on preparing them for homeownership and paying for college. Fannie Mae said its new mortgage options -- enhancements to its trademarked MyCommunityMortgage products -- require only three lines of nontraditional credit sources instead of the four that were previously required in most cases. In addition, co-borrowers are not required to have an established credit history to count part of their income as a loan qualification as long as the primary borrower meets the minimum credit requirements. Fannie and Freddie can be found online at http://www.fanniemae.com and http://www.freddiemac.com, and NAHREP can be found at http://www.nahrep.org.

Citigroup's residential mortgage lending unit, CitiMortgage, has pledged to provide up to $200 billion in mortgage financing to low- and moderate-income, minority, and "underserved" families through 2010, touting the commitment as the largest of its kind.Citigroup's announcement at the new company headquarters building in New York followed an earlier, smaller-scale CitiMortgage commitment to provide $3 billion of affordable housing for low- and moderate-income borrowers by the end of the decade in partnership with the Neighborhood Assistance Corp. of America. The earlier agreement derived from a market-tested partnership aiming to assist low-income, underserved borrowers who graduate from NACA's financial education programs. Carl Levinson, CitiMortgage's chairman and chief executive officer, said the lender will count on old and new partnerships as well as special programs such as "Opportunities Within Neighborhoods" (which tie financial resources with homeownership education) to meet the new commitment.

A California appellate court has ruled against nullifying the city of Oakland's predatory lending ordinance, in response to a lawsuit brought by the American Financial Services Association.The court found that Oakland's ordinance is not pre-empted by a more lenient state law, as AFSA had contended. It also reversed an earlier decision that found that Oakland's exemption of federally chartered institutions violated the state's parity principles. The law was written to cover only state-chartered banks. AFSA says it will appeal the decision. Jon Jaffe of Kirkpatrick & Lockhart LLP, a firm that handles litigation for the financial sector, recommended that lenders prepare to comply with Oakland's ordinance.

Craig G. Vought and John A. Foster have resigned from the board of trustees of Equity Office Property Trust, a real estate investment trust based in Chicago.The office REIT said the two will be pursuing commercial real estate investments through Broadreach Capital Partners, a newly formed San Jose, Calif.-based venture that will focus on investments in the Western United States. Mr. Vought and Mr. Foster, formerly co-chief executive officers of Spieker Properties, joined the EOPT board in July 2001 after the two companies merged, EOPT said. According to a report in the Silicon Valley Business Journal, Broadreach Capital has raised about $233 million and is targeting distressed commercial real estate properties in Silicon Valley and the Western United States that are poised for recovery. EOPT can be found online at http://www.equityoffice.com.

Veteran mortgage industry executive Zan Hamilton has been named chief executive officer of Lime Financial Services, Lake Oswego, Ore.Mr. Hamilton was most recently president and chief operating officer of Platinum Capital Group, and he was previously an executive vice president of Credit Suisse First Boston Financial Group. Lime, a regional subprime residential mortgage lender, said the privately held company is poised to expand its operations nationwide. Lime president Mike Baldwin pointed to Mr. Hamilton's contacts nationwide as key to the company's future growth. "I can't think of anyone better equipped than Zan Hamilton to form relationships with strategic partners and to establish and maintain key strategic markets," Mr. Baldwin said.

Essex Property Trust, Palo Alto, Calif., has announced an agreement to sell 1 million shares of series F cumulative redeemable preferred shares to institutional investors advised by Lend Lease Rosen Real Estate Securities LLC.The stock is being offered at a fixed price of $24.664 per share, a discount from its $25-per-share liquidation value. The preferred shares will pay quarterly distributions at an annual interest rate of 7.8125% and will be redeemable by the company on or after Sept. 23, 2008. The shares are not convertible into common stock. "This transaction may well be the first of several preferred unit redemption transactions that could occur within the next year," said Michael J. Schall, Essex's chief financial officer. "These transactions, if and when completed, have the potential to significantly lower the company's cost of equity capital." Essex is a real estate investment trust that buys, develops, and manages West Coast multifamily residential properties. It can be found online at http://www.essexproperties.com.

Summit Properties Inc., Charlotte, N.C., has announced an agreement to sell 2.3 million shares of its common stock to certain advisory clients of Cohen & Steers Capital Management at $21.81 per share.The price represents a 1.76% discount to the closing price of the shares on Sept. 18, the real estate investment trust said. Summit, which develops, acquires, and manages luxury apartment communities, can be found online at http://www.summitproperties.com.

The ratings on four classes of First Union National Bank Commercial Mortgage Trust's commercial mortgage pass-through certificates, series 2000-C2, have been lowered by Standard & Poor's Ratings Services.The downgrades were as follows: class K, from BB-minus to B; class L, from B-plus to D; class M, from B to D; and class N, from B-minus to D. S&P also placed the ratings of classes H, J, and K on CreditWatch with negative implications and affirmed the ratings on 10 other classes in the deal. S&P said the downgrades and CreditWatch placements were due chiefly to interest shortfalls that will result from the recovery by the master servicer (Wachovia Bank) of $5.1 million of advances related to the Crowne Plaza Downtown Phoenix hotel loan.

Jay H. Shah has been named president and chief operating officer of Hersha Hospitality Trust, Harrisburg, Pa.The real estate investment trust said Mr. Shah will play a key role in its acquisition program, which is focused on three- and four-star hotels in selected markets between Boston and Washington that have high barriers to new competition. Mr. Shah was previously a managing director of the Hersha Group, which develops, owns, and manages hotels in the Northeast. He is the founder and former principal of Shah & Byler LLP, a boutique real estate and construction law firm based in Philadelphia. The REIT can be found online at http://www.hersha.com.

Independent Mortgage Co., Anaheim, Calif., has announced the creation of a specialty products division offering second mortgages, home equity lines of credit, mortgages with high loan-to-value ratios, and mortgages offering 125% financing.The company said the division will create one-stop shopping for its branch affiliates by underwriting, processing, and funding all the loans they submit. It will also streamline and automate the loan process, Independent said. "As mortgage activity normalizes and shifts from a refinance environment to a purchase-driven market, providing a variety of loan products to meet diverse demands will be a strategic advantage," said Wolfgang Keuhn, sales manager of the specialty products division. Independent can be found online at http://www.independentmortgage.com.

The Michigan State Senate has passed an amendment that clarifies the intent of the Michigan Control Share Acquisitions Act and makes a Simon Property and Westfield America takeover of Taubman Centers more difficult.According to an interpretation of the amendment by the J.P. Morgan equity REIT team, the changes in law -- which passed on a 24-14 vote -- clarify that "the formation of voting groups do not trigger a 'Control Share Acquisition,' where disinterested parties are needed to confer voting rights." An earlier ruling based on the unamended legislation had blocked the Taubman family from voting the Taubman stock specifically acquired to prevent the takeover. The analysts said the likelihood of a takeover "diminishes significantly" because the Taubman family and their friends control more than one third of the real estate investment trust and can now vote their shares. The bill now goes to Gov. Jennifer Granholm for her signature. A statement from SPG and Westfield calls the amendment "special bailout legislation, actively promoted by the Taubman family" and urges the governor to veto it. A Simon spokesman told MortgageWire that the legislation hasn't been signed yet, and "there's still hope."

Seven classes of commercial mortgage-backed securities from five separate transactions that rely on credit support from ZC Specialty Insurance Co. and Centre Reinsurance U.S. Ltd. have been placed on CreditWatch with negative implications by Standard & Poor's Ratings Services.The affected securities are as follows: CA Colonnade Securities Trust capital appreciation pass-through certificates, class A; Citicorp Lease Pass-Through Trust pass-through certificates, series 1999-1, class A-2; Greenwich Capital Acceptance Inc. commercial mortgage pass-through certificates, series 1999-ZC1 and series 2001-ZC1, classes A and IO; Greenwich Capital Markets Inc. commercial mortgage pass-through certificates, series 2000-ZC2, classes A-1B and A-BX; and Greenwich Capital Acceptance Inc. commercial mortgage pass-through certificates, series 2001-ZC1, classes A and IO. S&P said the actions followed the placement of ZC's and Centre's ratings on CreditWatch with negative implications. The rating agency can be found online at http://www.standardandpoors.com.

Orlando, Fla.-based eMax Corp., an entertainment holding company, has announced the formation of a new subsidiary, Emax Realty Group, that will focus on acquiring and developing real estate.The parent company said Emax Realty is poised to become a publicly traded real estate investment trust that will serve as eMax's development and real estate partner. "The company is currently looking at developing several unique residential and commercial mixed-unit communities in Florida, Tennessee, and Montreal, Canada," eMax said. The company can be found online at http://www.emaxcorp.com.

The average 30-year fixed mortgage rate fell to 6.01% for the week ending Sept. 12 from 6.16% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate fell from 5.46% to 5.30%, and the average rate for one-year Treasury-indexed adjustable-rate mortgages declined from 3.87% to 3.81%. Fees and points averaged 0.5 points for fixed-rate mortgages and 0.6 points for ARMs. "Financial markets are feeling more confident that the Fed will not raise rates anytime soon," said Frank Nothaft, Freddie Mac's chief economist. "Add to that the fact that recent economic data shows core inflation is less than the market expects, and we see mortgage rates drop once again. And although refinancing has fallen off somewhat, homebuying activity remains vigorous, unfazed by market chatter that the end of the housing boom is near." A year ago, the average 30-year and 15-year fixed rates were 6.05% and 5.47%, respectively, and the average one-year ARM rate was 4.28%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

BRE Properties, San Francisco, has announced an offering of three million shares of common stock at $33.80 per share, and said it expects to net approximately $97.953 million from the offering.The multifamily real estate investment trust said it will use the proceeds for various general corporate purposes that may include the repayment of debt, redemption of equity securities, funding for development activities, and financing of acquisitions. BRE has entered into agreements to buy two Southern California apartment communities with 838 units at an estimated purchase price of $85 million. The offering is being underwritten by Wachovia Securities, which also has an option to purchase an additional 450,000 shares to cover any overallotments, BRE said. The REIT can be found online at http://www.breproperties.com.

Classes B-2TB and B-3TB of DLJ Mortgage Acceptance Corp. commercial mortgage pass-through certificates, series 1997-CF2, are being reviewed for possible downgrade by Moody's Investors Service.Moody's said the transaction's aggregate principal balance had decreased to $536.1 million as of Sept. 15 from $661.9 million at closing, a decline of about 19%. Twelve loans, representing approximately 17.1% of the pool balance, are in special servicing, the rating agency said. Moody's can be found online at http://www.moodys.com.

Two classes of EQI Financing Partnership I LP's commercial mortgage bonds, series 1997-1, have been downgraded by Fitch Ratings and removed from Rating Watch Negative.Class B was downgraded from A to A-minus, and class C was downgraded from BBB-minus to BB. In addition, the triple-A rating on class A was affirmed. Fitch attributed the downgrades mainly to a continued decline in performance of the portfolio, which consists of cross-collateralized and cross-defaulted first mortgages on 20 hotels. Fitch's stressed net cash flow has declined each year since 1998, and the trailing 12-month stressed net cash flow was down 35% from issuance as of June 30, the rating agency said. "The decline in performance is generally attributed to increased competition and the impact of the current economic conditions on the properties," Fitch said. The rating agency can be found on the Web at http://www.fitchratings.com.

Illinois Gov. Rod Blagojevich has signed an executive order to develop a comprehensive plan to promote the creation of affordable housing across Illinois.The executive order identifies various "underserved" populations that the plan should focus on, including households earning less than 50% of the area median income (with an emphasis on those at or below 30%), senior citizens, people with disabilities, the homeless, and those deemed at risk of becoming homeless. A 19-member task force headed by the director of the Illinois Housing Development Authority is charged with developing the plan. "The shortage of affordable housing poses a serious threat to the well-being of communities across the state," Gov. Blagojevich said.

As part of a national campaign against Wells Fargo, the Association of Community Organizations for Reform Now sent over 100 members to storm the company's corporate office in downtown Manhattan Sept. 16, demanding a meeting with Richard Kovacevich, Wells Fargo's chief executive officer.Demonstrators attempted to hand-deliver a request to Mr. Kovacevich, who ACORN representatives say has refused to meet with the group. Security stopped the elevators, however, and the demonstrators settled for a 15-minute occupation of the lobby, where they chanted, cheered, passed out literature to passers-by, and set inflatable sharks afloat in a large fountain. The community activist group has alleged that Wells Fargo Funding and Wells Fargo Financial are making subprime mortgage loans with high fees, rates, and terms similar to those of other allegedly predatory lenders that have entered into large settlements with regulators. A written statement by Wells issued later in the day said ACORN's allegations were based on "misinterpreted data and other inaccuracies" and that it was willing to meet with "credible organizations in the communities in which [we] do business."

The Market Composite Index, an overall measure of mortgage applications, fell to 726.7 on a seasonally adjusted basis during the week ended Sept. 12 from 771.8 the week before, according to the Mortgage Bankers Association of America's Weekly Mortgage Applications Survey.On an unadjusted basis, applications were up 16.6% on the week but down 36.0% from the level recorded a year earlier. The Purchase Index increased from 408.8 to 432.4 on a seasonally adjusted basis, while the Refinance Index fell from 2883.6 to 2438.5. The average contract interest rate for 30-year fixed-rate mortgages fell from 5.99% to 5.91%, and points (including the origination fee) decreased from 1.41 to 1.32 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mbaa.org.