Originations

Bank of America has provided $20 million to finance the creation and preservation of affordable housing units in the New York City area through The Community Preservation Corp. and pledged to provide another $80 million to various local organizations within six months.BoA said its community development banking group plans to help finance over 800 apartments in Brooklyn, another 200 in Yonkers, and 375 in Newburgh. According to BoA's New York market president Carter McClelland, the CPC financing "is the first of many efforts in support of affordable housing and community development in the New York metro area. New York is a very important market for us." CPC is a nonprofit commercial real estate mortgage lender.

Simon Property Group, Indianapolis, and Westfield America, the U.S. subsidiary of Westfield America Trust, have again extended their $20 per share offer for the common shares of Taubman Centers, this time to Oct. 3, 2003.Simon also said that approximately 64% of the common shares of Bloomfield Hills, Mich.-based Taubman have been tendered into the offer. However, according to Taubman's version of the story, less than 39% of the approximately 81 million shares of its voting stock have been tendered. The amount is insufficient to meet the two real estate investment trusts' minimum tender offer condition, Taubman said in a written response to Simon and Westfield's latest extension. The two retail REITs have kept extending their tender deadline while the takeover case wends its way through the Michigan legal system.

Meanwhile, the debt ratings of another mortgage insurer, Philadelphia-based Radian Group, have also been downgraded, from A-plus to A, by Fitch Ratings.The outlook on the debt ratings has been changed from Negative to Stable. The insurer financial strength ratings of Radian's subsidiaries, Radian Guaranty, Radian Insurance, and Amerin Guaranty Corp., remain at AA, Fitch said. The rating agency attributed the downgrades to "an expansion of the notching between the organization's IFS rating and long-term issuer rating, and primarily reflects Fitch's concern with the company's higher utilization of debt leverage relative to that employed over its recent history." As of June 30, the company's ratio of debt to total capital was 19.2%, up from 12% at the end of 2001, Fitch said.

The debt ratings of MGIC Investment Corp., Milwaukee, have been downgraded from AA-minus to A-plus by Fitch Ratings.The outlook on the debt ratings has been changed from Negative to Stable. The insurer financial strength rating of MGIC's subsidiary, Mortgage Guaranty Insurance Corp., remains at AA-plus, Fitch said. The rating agency attributed the downgrades to "an expansion of the notching between the organization's IFS rating and debt ratings, and primarily reflects Fitch's concern with the company's more aggressive management of its financial leverage." As of June 30, the company's ratio of debt to adjusted total capital was 14.9%, up from 13.7% at the end of 2001, Fitch said. The increase stems from higher levels of debt outstanding and a stock repurchase program, the rating agency said. Fitch can be found online at http://www.fitchratings.com.

While rates for the 30-year fixed-rate mortgage continue to rise, the Eleventh Federal Home Loan Bank District Cost of Funds Index has once again set a record low.The July index level of 2.113% is almost 10 basis points below the 2.018% level recorded in June. Because it is a weighted average on the interest paid by savings institutions in Arizona, California, and Nevada on money used to fund mortgages, COFI tends to lag other interest rate movements. In contrast to COFI, the Freddie Mac Primary Mortgage Market Survey shows average fixed rates on a 30-year mortgage going from 5.21% in mid-June to 6.32% for the last week of August. Also worth noting is that the average rate for the one-year adjustable-rate mortgage bottomed out at the end of June at 3.45% and had only risen 43 bps to 3.88% by the end of August.

The American Financial Services Association has issued a cautious claim of victory following an Ohio judge's decision that state law pre-empts the city of Dayton's predatory lending law.AFSA is involved in lawsuits against six cities that have passed predatory lending legislation, arguing that states occupy the field of mortgage regulation. Three of those cities are in Ohio, and Dayton is the first in the country that a judge has ruled on. "The court's decision is consistent with [AFSA's] arguments," the financial trade association said in a recent statement. "While we believe that the reasoning of Judge Davis in this case would be equally applicable to the cases pending in Cleveland, Toledo, and Dayton, AFSA respects the judicial prerogatives in those jurisdictions and will wait accordingly for the decisions in those cases."

LandAmerica Financial Group Inc., Richmond, Va., has made separate acquisitions of a mortgage credit report provider and a flood hazard certification company.The company has acquired all the stock of Info1 Holding Co., an Atlanta-based independent mortgage credit report provider. LandAmerica paid $47 million in cash for Info1, which has gross revenues of $30.9 million for the first six months of 2003. In a separate deal, LandAmerica has agreed to buy Lereta Corp., a national tax service and flood hazard certification company based in Covina, Calif., for $210 million in cash. Lereta had gross revenues of $85 million for the first six months of this year. In a statement about the Lereta deal, Charles H. Foster Jr., chairman and chief executive of LandAmerica, said the deal will contribute to his company's goal of generating between one-fourth and one-fifth of its revenues from products and services other than title insurance.

The stock of Hospitality Properties Trust, a real estate investment trust based in Newton, Mass., has received a "strong sell" rating from Zacks.com.Zacks said the hotel REIT's earnings estimates for the year have declined by about 4% over the past three months, while projections for next year have fallen about 6%. The company reported net income available to common shareholders of $0.43 per share for the second quarter, down from $0.54 per share a year earlier, Zacks said. "As conditions improve, then so too should the performance of Hospitality Properties and others in its industry," Zacks said. "But for right now, investors may want to hold off on opening or deepening a position until its earnings estimates gain more upside mobility." Other REITs identified by Zacks as "struggling" include Associated Estates Realty, First Industrial Realty Trust, and Sizeler Property Investors. Zacks.com, the online edition of Zacks Investment Research, Chicago, can be found online at http://www.zacks.com.

California single-family housing starts fell for the second straight month in July, but are still on pace to reach a 14-year high for the year, according to the California Building Industry Association.Construction started on 11,751 new single-family homes in July, down from 12,571 in June. Still, the first seven months of 2003 have seen 13.5% more starts than the corresponding period in 2002, and the CBIA projects a total of 186,000 starts for the year, the highest since 1989. Multifamily construction remained strong, rising 8.9% since June and 27.4% over the past year. Combined single-family and multifamily housing starts for 2003 are 114,374, up 22.4% from the same period in 2002.

Metropolitan Insurance and Annuity Co., a subsidiary of New York-based MetLife, has acquired Trizec Properties' interests in Chicago's Sears Tower for $9 million, freeing the Chicago-based real estate investment trust from its commitment to take over full ownership of the property this year.MetLife holds a first mortgage on the property and has now taken on Trizec's interests in the building, which include a second mortgage. TrizecHahn, Trizec's predecessor company, had acquired the Sears Tower interests in 1997, Trizec said. This means that Trizec will not be adding on the approximately $766 million of mortgage debt it would have assumed if it had taken over Sears Tower. Trizec will continue to manage and lease the property on behalf of MetLife. The REIT said it does not expect the sale to have any impact on its funds from operations for 2003. The property has become less sought after in the wake of the Sept. 11 terrorist attacks.

America's Senior Financial Services, Jupiter, Fla., has announced that it will change its corporate name to Amstar Financial Services, although its retail reverse mortgage business will continue to use the current name.The company said its retail forward mortgage platform will be identified as Jupiter Mortgage Corp., and its wholesale mortgage lending business will operate as Synergy Mortgage Solutions. Its "branch partners" platform will operate as Amstar Mortgage Network. "These changes became necessary as many in the public sector viewed [America's Senior] as a reverse mortgage lender only," even though reverse mortgages represent only about 10% of its operations, the company explained. The name changes will be phased in over the next five months. The company can be found online at http://www.americassenior.com, http://www.jupiter-mortgage.com, and http://www.synergy-mortgage.com.

Francis Creighton, a former legislative director for Rep. Steve Israel, D-N.Y., has been named director of government affairs at the Mortgage Bankers Association of America.The MBA said Mr. Creighton will be primarily responsible for lobbying the House of Representatives on key industry issues. Before his stint with Rep. Israel's office, Mr. Creighton was senior counsel for public affairs and manager of new business development at the GCI Group, New York. He has also worked at the U.S. Department of Labor and in the offices of former Rep. Sam Gejdenson, D-Conn., and the late Sen. Daniel Patrick Moynihan, D-N.Y. The MBA can be found online at http://www.mbaa.org.

Banks are looking to maintain or expand their commercial real estate loan portfolios for the second half of the year while tightening their underwriting standards, according to a survey of lenders by San Francisco-based Bridger Commercial Funding.Eighty-six percent of the respondents see their commercial real estate lending volumes either remaining level or rising for the rest of the year, and 15% see higher loan volume for the second half. Just over a third (34%) of the bankers surveyed are optimistic about the sector, up from 27% at the beginning of 2003, the commercial real estate market intermediary said. "While their lending spigots are open, banks are illustrating discipline about the new loans they'll book," said Peter Grabell, Bridger's senior vice president of relationship management. The survey also found that commercial real estate portfolios are healthy overall, with 88% of the respondents reporting delinquency levels below 1% and little real estate owned. Multifamily (84%), retail (77%), and warehouse/industrial (70%) were reported to be the strongest-performing property types.

Coldwell Banker affiliates sold 5,849 homes worth more than $1 million in the first half of 2003, the organization has reported.Sales for such homes rose 8.2% over the first six months of the year and 8.9% from midyear 2002 to midyear 2003, with the overwhelming majority falling in the $1 million to $5 million price range. California continues to be the largest market for luxury homes, with $5.5 billion of the $10 billion volume from January to June concentrated in that state. Of the 10 cities with the most luxury home sales, nine were in California. The 10th, Miami, is in Florida.

With the grudging support of the financial community, the nation's toughest financial privacy bill became law in California on Aug. 27.The law requires businesses to receive a consumer's permission before sharing his or her nonpublic financial information with other companies, whereas federal law allows companies to do so as long as the customer has not requested otherwise. Financial industry interests got on board only after it became apparent that supporting the law was the best way to thwart an even tougher bill that was gaining steam through a voter initiative. The new law poses no threat to the fundamental health of the state's mortgage industry, said Melissa Richards, general counsel of the California Association of Mortgage Bankers. However, she added that it will affect the way some businesses market to their customers.

Class L of GE Capital Commercial Mortgage Corp. commercial mortgage pass-through certificates, series 2000-1, has been downgraded from B-minus to CCC by Fitch Ratings.The rating agency also affirmed the ratings on 13 other classes in the deal. Fitch attributed the downgrade chiefly to expected losses on two specially serviced loans, which would cause a reduction in credit enhancement levels. The certificates are collateralized by 102 commercial and multifamily mortgages, with significant concentrations in retail (24%) and office (24%), Fitch said. The rating agency can be found on the Web at http://www.fitchratings.com.

Fannie Mae has announced a $35 billion affordable housing investment initiative that will help provide up to 200,000 families or individuals with homeownership and rental opportunities in the San Francisco Bay area over the next five years.The Fannie Mae Bay Area Partnership Office will implement the new strategy to reach out to the southern counties of Monterey, San Benito, and Santa Cruz in addition to counties in the Bay area. Fannie Mae said the Bay area initiative (part of its $2 trillion American Dream Commitment) is an extension of its $16 billion five-year housing strategy of 1999, which was completed a year ahead of schedule. Related loans purchased by Fannie Mae have served 16,549 first-time homebuyers, 26,178 minority borrowers, and 28,305 low- and moderate-income borrowers in the Bay area, the government-sponsored enterprise said. Fannie Mae can be found on the Web at http://www.fanniemae.com.

The average 30-year fixed mortgage rate rose to 6.32% for the week ending Aug. 29 from 6.28% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate rose from 5.60% to 5.66%, and the average rate for one-year Treasury-indexed adjustable-rate mortgages climbed from 3.84% to 3.88%. Fees and points averaged 0.7 points for all three mortgage categories. "Although mortgage rates have risen for the second week running, the long-term figures are still only about 50 basis points higher than they were at the start of the year," said Frank Nothaft, Freddie Mac's chief economist. "This may have slowed the refinance market a little, but refinancing continues to make up about half of all applications for mortgages, according to the Mortgage Bankers Association." A year ago, the average 30-year and 15-year fixed rates were 6.22% and 5.64%, respectively, and the average one-year ARM rate was 4.34%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

The California gubernatorial recall situation has stalled legislative initiatives by the California Mortgage Bankers Association, the trade association says.Melissa Richards, the CMBA's general counsel, said the group has found in dealings with agencies that license and oversee mortgage banking that "we have a number of policy issues that have just been tabled, given the fact that the commissioners of these agencies are not sure if they're going to have a job come late October." Ms. Richards specifically named California's Department of Corporations, Department of Real Estate, and Department of Business, Transportation and Housing as the affected agencies. She said the only thing the CMBA can do about the inconvenience is to grin and bear it.

Glimcher Realty Trust, Columbus, Ohio, has completed a public offering of 2.4 million 8.75% redeemable preferred shares at $25 per share, raising net proceeds of approximately $57.8 million.Glimcher, a real estate investment trust, said it will use the proceeds from the offering to partly fund the acquisition of a Tampa, Fla., regional mall and to repay a part of the amount outstanding on its $170 million secured credit facility. Deutsche Bank Securities was the lead manager on the offering. The retail REIT can be found online at http://www.glimcher.com.