Originations

Kimco Realty Corp., New Hyde Park, N.Y., and Mid-Atlantic Realty Trust, Lutherville, Md., have announced a merger agreement under which Kimco would acquire all the outstanding shares of MART in a transaction valued at approximately $444 million.The agreement, which has been unanimously approved by the boards of both real estate investment trusts, provides for the purchase of MART stock for $21 per share in cash, the companies said. Subject to certain conditions and options, a similar offer would apply to MART's operating partnership units. MART would merge into a subsidiary of Kimco, and Kimco would purchase the properties subject to MART's net debt, which was approximately $236 million as of March 31, the shopping center REITs reported. The merger is subject to approval by MART's shareholders and to customary closing conditions. Kimco's financial adviser is UBS Securities LLC, and MART's is Wachovia Securities LLC. Following the announcement, Standard & Poor's Ratings Services affirmed its A-minus corporate credit rating on Kimco as well as its ratings on Kimco's senior unsecured debt. Kimco can be found on the Web at http://www.kimcorealty.com.

The Mortgage Bankers Association of America has announced that, thanks to falling interest rates, it is now forecasting that mortgage originations will total $3.3 trillion this year, far exceeding the record of $2.5 trillion set in 2002.In its latest Mortgage Finance Forecast, the MBA estimated that 68% of the $3.3 trillion in loans will be refinancings. The total volume of mortgages for home purchases is expected to reach $1.07 trillion by the end of the year, up 5% from $1.02 trillion in 2002. "Part of the increase in the volume is due to higher home prices and average mortgage amounts, but in addition, about 6.8 million single-family units are expected to be sold this year, a 3.5% increase over 2002," the MBA said. The surge in refis has been driven by falling interest rates. "The Federal Reserve on May 6th indicated its concern over the possibility of deflation, and the financial markets responded by pushing down interest rates on long-term Treasuries and mortgage instruments," said MBA chief economist Doug Duncan. Mr. Duncan said he expects the Fed to cut the federal funds rate target by at least 25 basis points at its policy meeting June 24-25, and not to raise the short-term rates until the middle of next year.

The average 30-year fixed mortgage rate was unchanged for the week ending June 20, remaining at the survey-record low of 5.21% recorded the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate rose from a survey-record low of 4.60% to 4.62%, and the average rate for one-year Treasury-indexed adjustable-rate mortgages fell from a record low of 3.54% to 3.51%. Fees and points averaged 0.6 points for all three mortgage categories. "The Consumer Price Index released this week showed no decline, suggesting that the possibility of deflation is still low," said Frank Nothaft, Freddie Mac's chief economist. "Housing starts were stronger than expected, as were the leading indicators released [June 19]. All of these reports together could indicate the economy is ready to pick up growth." A year ago, the average 30-year and 15-year fixed rates were 6.63% and 6.08%, respectively, and the average one-year ARM rate was 4.60%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

Despite the 2001 recession and weak recovery, "by most measures 2002 was the strongest year for housing on record," according to an annual report by The Harvard University Joint Center for Housing Studies.The report, "The State of the Nation's Housing," found that residential investment, home sales, homeownership rates, aggregate home equity, and total mortgage debt "all hit new highs" in 2002. For example, cash-out refinancings generated back into the economy an estimated $97 billion from home equity, with another $70 billion going toward the payoff of higher-cost second mortgages. The report was unveiled June 17 at the headquarters of the Ford Foundation in New York.

CBC Cos., Columbus, Ohio, has made a move that will allow it to offer bundled services in the future by acquiring Pittsburgh-based Advantage Equity Services, a national title insurance company.The deal will add title insurance, settlement, and closing services to the credit, collateral valuation, flood certification, and other services that CBC already offers. CBC Cos. was founded in 1948 and serves more than 50,000 customers nationwide through more than 75 business office locations and 1,700 employees. The company's website address is http://www.cbc-companies.com.

The Market Composite Index, an overall measure of mortgage applications, rose to 1701.7 on a seasonally adjusted basis during the week ended June 13 from 1684.6 the week before, according to the Mortgage Bankers Association of America's Weekly Mortgage Applications Survey.On an unadjusted basis, applications were up 0.7% on the week and 192.6% from the level recorded a year earlier. On a seasonally adjusted basis, the Purchase Index increased from 418.9 to 419.1, and the Refinance Index rose from 9046.9 to 9162.7. Refinancings represented 77.3% of total applications, up from 76.9% the previous week, while adjustable-rate mortgages accounted for 14.4%. The average contract interest rate for 30-year fixed-rate mortgages fell from a survey-record low of 5.06% to a new low of 4.99%, and points (including the origination fee) increased from 1.53 to 1.58 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mbaa.org.

Although more mortgage brokers than ever before are serving up loans to homebuyers and homeowners, their portion of the origination market slipped last year from its 1998 peak, when they controlled 69% of the market.According to the latest tally from Wholesale Access, a Columbia, Md., research and consulting firm, brokers produced slightly less than two of every three loans last year. But that still amounts to a total industrywide volume of $1.625 trillion, the company reported at the National Association of Mortgage Brokers convention in Baltimore. Based on a preliminary reading of two-thirds of the 1,000 exhaustive surveys, the company estimates that there are now 44,000-46,000 brokers writing loans, a fivefold jump from 8,500 in 1988 when partners Tom LaMalfa and David Olson first canvassed the industry. Mr. Olson called the increase "a major finding," especially considering that there are no other data being collected to indicate the size of the business. "This is quite an industry not to be tracked by the federal government," he said. Mr. LaMalfa chided the Department of Housing and Urban Development for trying to change the way brokers do business without understanding their role. "This is an industry that's holding up the entire economy, and we don't know the size of it," he said. "When HUD considers meddling with brokers, they should ask themselves how all these refis would get done without brokers."

ResearchWorldwide.com has announced the launch of a global portal for commercial real estate conferences.The Worldwide Commercial Real Estate Related Conferences Diary and Search Engine offers details on over 500 international and national CRE-related conferences, the company said. "We provide this as a free service to the public and to conference hosts, and are now looking to add relevant regional and local conferences as well," ResearchWorldwide.com said. The company can be found online at http://www.researchworldwide.com.

Homebuilders Financial Network, Miami Lakes, Fla., a provider of in-house mortgage lending to homebuilders, has announced the appointment of two executives and the planned opening of a new West Coast Operations Center in Orange County, Calif., to help "solidify its West Coast presence."Stephen Hoff, 44, was named senior vice president of national sales and marketing, and Syllen Brown, 43, was named vice president of West Coast operations. In their new posts, the pair will be responsible for business development in the homebuilder, Realtor, and commercial real estate sectors, the company said. Mr. Hoff, an 18-year veteran of the mortgage banking industry, previously held various posts with companies such as Asmes Home Loan and Pedestal Inc., HFN said. Ms. Brown, who has 17 years of experience in the multistate mortgage lending business, previously served as vice president of Beazer Mortgage and regional manager of various mortgage companies. HFN can be found online at http://www.hfn.com.

Allen L. Wehrhahn has been named to the newly created post of senior vice president and chief administrative officer of KeyCorp's consumer finance organization, which includes Key's national home equity business.Mr. Wehrhahn has more than 20 years of experience in the financial services industry, where he has specialized in real estate operations and mortgage and home equity businesses, among other things, Key said. He was most recently director of financial controls and business analysis at Household Tax Master's Inc. Key can be found online at http://www.keybank.com.

A conservative, pro-market solution would be an appropriate way to combat predatory lending, a former assistant secretary of the Treasury has told the Mortgage Bankers Association of America's Enforcement Summit in Washington.Sheila Bair, the dean’s professor of financial regulatory policy at the University of Massachusetts at Amherst, said the subprime mortgage industry could look to the remittance industry, where government-encouraged competition succeeded in lowering costs significantly. The main roadblocks to an efficient subprime market, Ms. Bair said, are a continued limit on supply in underserved areas, the reputational risk for potential lenders, and a lack of consumer understanding that keeps people from being able to choose the best product. Ms. Bair left her post as assistant secretary of the Treasury for financial institutions in June 2002 to join the university.

FleetBoston Financial, Boston, has announced a new five- to 10-year home equity refinance loan for consumers with mortgage balances of $300,000 or less.The fixed-rate loan has no application fees, no closing costs, requires no private mortgage insurance, and features rates competitive with those of first-mortgage products, Fleet said. The product is available in the nine states where Fleet has branch locations: Connecticut, Florida, Massachusetts, Maine, New Hampshire, New Jersey, New York, Pennsylvania, and Rhode Island. "Given today's declining rates, this product provides an excellent opportunity to refinance an existing first mortgage or to consolidate other secured real estate or other outstanding debt," said Margaret Lawlor, director of consumer loan products at Fleet. "For consumers who want a shorter term on their mortgage at today's great rates, this is the right product at the right time." The company can be found online at http://www.fleet.com.

Federal credit unions will soon be able to invest in commercial mortgage-backed securities and other commercial mortgage-related securities thanks to an expansion of their investment options by the National Credit Union Administration.Eric Envall, a regulatory compliance counsel with the National Association of Federal Credit Unions, an Arlington, Va.-based trade association for the federal credit union industry, told MortgageWire that the change was made following the NCUA's revision of FCU-related legislation. The revision, which takes effect after July 3, "enhances the federal charter and recognizes certain investments that used to be regarded as more risky and are now deemed to be less risky," Mr. Envall said. FCUs need to meet certain capital standards before they become eligible to take advantage of the revision. Mr. Envall said it is too early to tell to what extent FCUs will take advantage of the revision.

The National Association of Mortgage Brokers hasn't had any success in persuading state legislators or regulators to adopt the model licensing statute it proposed a year ago.But that hasn't deterred the fast-growing 16,000-member group from pushing lawmakers to require that all originators within their purview pass criminal background checks, meet minimum educational requirements to obtain a license, and fulfill continuing educational requirements to retain their certificates. "We're going to continue working with our state affiliates until all originators in all 50 states are licensed," past president Joseph Falk told MortgageWire at the NAMB's convention in Baltimore. Some states, most notably Nevada, have amended their laws to embody some of the same principles supported by the NAMB. But for the most part, they've acted on their own without any prodding from the association or its state affiliates. Mr. Falk said that in some states the NAMB is running into opposition from mortgage banking and depository groups that object to licensing. But in what he called his "main frustration," he said the group's affiliates in other states have yet to press the issue. Currently, the NAMB is working to advance its model licensing law in just six states.

Countrywide Financial Corp., Calabasas, Calif., has announced an alliance with Guardian Mortgage Documents that will make available Web-based preparation and delivery of documents on home equity lines of credit to Countrywide's Correspondent Lending Division.Countrywide said lenders will now be able to quickly generate HELOC documents that conform to Countrywide's guidelines through an interface between Countrywide's Platinum Lender Access website for correspondent lenders and GMD's Next Generation Input System. "HELOC documents are so complex, and the requirements vary dramatically from state to state," said John Dixon, an executive vice president at Countrywide. "Combining our Platinum site with GMD's Web-based document preparation technology enables lenders to easily navigate the process of creating and ordering these complicated documents." The companies can be found online at http://www.countrywide.com and http://www.gmdinfo.com.

The decline in mortgage rates to 45-year lows is going to boost refinancings to $2.6 trillion this year, nearly matching last year's record for total originations, according to Fannie Mae chief economist David Berson.For all of 2003, the Fannie Mae economist is predicting that lenders will originate a record $3.7 trillion in one- to four-family loans. Next year, he is forecasting a decline in originations to $2 trillion. Mr. Berson told reporters that the housing and mortgage finance markets are operating at a "stupendous pace" and that he has noticed no effect from the news about the management shake-up and accounting problems at Freddie Mac. "There has been no noticeable impact in the housing market or the mortgage market," the economist said. Mr. Berson said he expects the Federal Reserve to reduce interest rates by 25 basis points at its June 24/25 meeting.

The NAHB Housing Market Index rose five points to 62 in June, according to the National Association of Home Builders.In addition, the index gauging builder sentiment about the current single-family sales market rose five points, to 67, and the measure of expected sales over the next six months increased one point, to 70. The reading for prospective homebuyer traffic rose six points, to 46, the NAHB said. "Builders are now as confident in the new-homes market as they were prior to the buildup to the conflict with Iraq and before poor weather conditions weighed on the market in March," said NAHB president Kent Conine, a home and apartment builder from Dallas. "In fact, builder expectations for future home sales are now even more buoyant than early in the year." Anything above 50 in the index and its components, which are based on surveys of hundreds of builders, means homebuilders believe that the single-family housing market is doing well. The NAHB can be found online at http://www.nahb.com.

Single-family housing starts rose 1.5% in May as builders continue to stay slightly ahead of last year's construction pace.The U.S. Census Bureau reported that single-family starts rose from a seasonally adjusted annual rate of 1.36 million in April to a 1.38 million rate in May. On a year-to-year basis, single-family construction is now up 3.1%, and the National Association of Home Builders expects single-family starts to total 1.37 million this year, up from 1.36 million in 2002. NAHB economist Michael Carliner said he might have to revise the estimate upward based on what the NAHB is hearing from builders and the fact that mortgage rates have dropped to the lowest level since November 1956. The real surprise in the monthly housing report is that multifamily starts jumped 35% to 328,000 units in May, up from 243,000 in April. "Even though demand for living in multifamily units has been weak, investor demand for buying multifamily properties remains pretty strong," Mr. Carliner said.

Chelsea Property Group, Roseland, N.J., has announced the completion of a public offering of 1.2 million shares of common stock at a price of $42.10 per share.Chelsea, a real estate investment trust, said the net proceeds of approximately $49.5 million will be used to repay unsecured bank borrowings association with its purchase of The Crossings Factory Stores. The shopping center REIT can be found online at http://www.cpgi.com.

Conseco and real estate tycoon Donald J. Trump have reached an agreement to sell the General Motors Building in New York City.The parties did not disclose how the proceeds from the sale are to be distributed between them. Bill Shea, Conseco's chief executive officer and president, said the building will be put up for sale immediately "to permit Conseco to put the substantial value of this investment to work toward our restructuring program." Last year, Mr. Trump initiated a $1 billion lawsuit against Conseco -- seeking actual damages in excess of $500 million and punitive damages of $500 million -- alleging a breach of agreement to sell Conseco’s interest in the building to Mr. Trump. The building was purchased in July 1998 by Trump and Conseco, as partners, from Corporate Property Investors, according to the Trump Organization.