Originations

A little-known California law allowing consumers to protect themselves against identity theft by placing a freeze on their credit files has the National Association of Mortgage Brokers worried.With such a firewall in place, consumers must grant written authorization before a credit agency will release their files to a mortgage lender or any other potential creditor. And NAMB officials say that can cause unnecessary delays in the application process. Worse, according to Ginny Ferguson, who chairs the NAMB's Credit Scoring Committee, Fannie Mae and Freddie Mac won't underwrite applications from borrowers who have frozen their credit records because the GSEs are unable to gain access to the files without direct authorization. "This is a bad one," Ms. Ferguson said at the NAMB's annual convention in Baltimore. "It will stop the industry dead in its tracks." Former NAMB president Neill Fendly agreed. "This is going to keep people from getting any type of credit, even credit for a cell phone," he warned. Only 1,000 or so California residents have placed a hold on the credit information since the law took effect on Jan 1, largely because they don't know they can. But the worry is that once the word gets out, many more will do so, and that this method of protecting one's credit identity will be adopted elsewhere. According to the NAMB, Texas is the only other state currently considering such legislation.

Even though the mortgage broker industry has been successful on both a business and a regulatory basis, “we cannot rest on our laurels, our accolades, or our posteriors,” says A.W. Pickel III, the newly installed president of the National Association of Mortgage Brokers.Speaking to attendees at the group’s annual convention in Baltimore, Mr. Pickel listed five goals for his term. Noting that other issues will face the industry once the Department of Housing and Urban Development's proposed mortgage settlement regulations are finalized, Mr. Pickel said he will dispatch the NAMB regional vice chairs to all the states to provide help on legislative issues. Secondly, he reiterated the call to create a national registry of all loan originators. Thirdly, Mr. Pickel said the large growth in industry participants means there is a need for education "now more than ever,” so he will seek to make more courses available from the NAMB through traditional means as well as online. His fourth goal is to increase NAMB membership in the next 12 months from 18,000 to 25,000. Finally, Mr. Pickel said he wants to offer real-time access to member services, as well as brochures, promotional materials, and the like, through the NAMB website.

The outgoing president of the National Association of Mortgage Brokers cautioned attendees at the association's annual convention Sunday that “even as we celebrate our best year ever … don’t kid yourselves.”In a taped message to the convention, Armand W. Cosenza Jr. said the mortgage broker industry is still under attack on the regulatory front, despite its success in generating 40,000 comment letters and causing the Department of Housing and Urban Development to slow its efforts to reform the mortgage settlement process. Mr. Cosenza said the NAMB has achieved all its goals since he took office one year ago in Cleveland. But he said it has been a spectacular success in one area (illustrated by the response to HUD): taking an active, rather than a reactive, role in regulatory matters. Mortgage brokers are “an integral part of the origination process and a major force to be dealt with,” he said. Mr. Cosenza also lauded the NAMB’s education efforts, especially the creation of eNAMB University. The association can be found online at http://www.namb.org.

Fannie Mae has told its employees to keep quiet about the Freddie Mac accounting scandal and not to discuss it with anyone outside the company.It has also requested that its employees not send out any e-mail about what has occurred at Freddie Mac. "We've told them not to speculate or discuss the issues," a spokeswoman for the company said, adding: "We don't know what's going on, and we want to be very careful -- for legal reasons." On June 9 Freddie Mac fired its president, David Glenn, when it was revealed that he altered diaries regarding the firm's reaudit. As part of the same move, the company announced the retirement of its long-time chairman and chief executive officer, Leland Brendsel, and the resignation of executive vice president Vaughn Clarke. Fannie Mae can be found online at http://www.fanniemae.com.

Brandywine Realty Trust, Plymouth Meeting, Pa., has priced a public offering of 2.0 million common shares at $24.84 per share.The real estate investment trust said it plans to use the net proceeds of $23.60 per share for general corporate purposes. Citigroup Global Markets Inc., the underwriter of the offering, has been granted an option to buy up to an additional 300,000 shares to cover any overallotments. The REIT can be found online at http://www.brandywinerealty.com.

Friedman, Billings, Ramsey Group Inc., Arlington, Va., has announced that its subsidiary Friedman, Billings, Ramsey & Co. Inc. has closed a $157 million private offering for Luminent Mortgage Capital Inc., a San Francisco-based real estate investment trust.FBR said the transaction involved an offering of 10.5 million common shares at a price of $15 per share, which is expected to yield net proceeds of $146.4 million to Luminent. FBR was the sole book-runner and lead manager for the 144A offering. It can be found online at http://www.fbr.com.

American Financial Realty Trust, Jenkintown, Pa., has launched an initial public offering of approximately 50.7 million shares of its common stock.The real estate investment trust said it is offering 50 million shares, and 681,500 shares are being offered by shareholders. The joint book-running managers are Banc of America Securities LLC and Friedman, Billings, Ramsey & Co. The underwriters have been granted an option to buy up to an additional total of approximately 7.6 million shares to cover any overallotments. Lewis S. Ranieri, known as "the father of the mortgage-backed security," is the non-executive chairman of the REIT.

CitiMortgage of New York has teamed up with the Neighborhood Assistance Corp. of America in a $3 billion, 10-year commitment to affordable housing lending for moderate- and low-income borrowers who graduate from NACA's financial education programs.Citigroup, the parent company of CitiMortgage, said the fund will primarily benefit first-time homebuyers -- as well as homeowners at risk of losing their homes, or facing financial distress -- through refinancing with no fees, points, or costs at affordable interest rates. NACA-qualified borrowers will benefit from favorable terms such as no downpayment and closing costs, no fees, and affordable interest rates even if they do not have a perfect credit score. NACA will provide one-on-one homeownership counseling in addition to comprehensive and rigorous education programs.

Port Financial Corp. and Brookline Bancorp are negotiating with the Massachusetts Department of Revenue over how to pay back taxes they became liable for in March in connection with the closing of a loophole related to real estate investment trusts, the companies have announced.A state law that closed a popular tax loophole -- under which banks could receive tax-free income through wholly owned REIT subsidiaries -- also made banks that had taken advantage of the loophole liable for unpaid taxes dating to Dec. 31, 1999. The MDOR said the roughly 60 banks that did so got out of paying $160 million in taxes. Both Port Financial and Brookline said no final deal had been reached, though Port Financial said it expected to settle the matter by the end of the month.

Most firefighters, police officers, nurses, teachers, and other "workforce heroes" cannot afford to buy a house in the communities they serve, according to a study released by the Homeownership Alliance.The study found that, on average, homebuyers in those categories who work in central cities have "less than a one-in-three chance of finding a home they can afford," while in the suburbs the opportunity drops to about three-in-10. Findings were announced during The Workforce Housing Symposium held in Washington, D.C., by the Homeownership Alliance in celebration of Homeownership Month. The study found that San Francisco, San Jose, San Diego, Los Angeles, and Seattle are "particularly difficult areas" for such homebuyers. In addition, suburban areas with "very low hero homeownership opportunities" include the aforementioned cities as well as Memphis, New York, Dallas, and Milwaukee. Better possibilities exist in the metropolitan areas of San Antonio, Cleveland, Detroit, and New Orleans, the study said. The study was conducted by David Crowe, a National Association of Home Builders senior staff vice president for federal regulatory and housing policy.

The average 30-year fixed mortgage rate fell to another survey-record low of 5.21% for the week ending June 13 from 5.26% the previous week, the ninth week in a row the rate has fallen and the fifth in a row it has set a record, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate fell from 4.66% to 4.60%, also a survey-record low, and the average rate for one-year Treasury-indexed adjustable-rate mortgages fell from 3.59% to 3.54%, another record low. Fees and points averaged 0.5 points for fixed-rate mortgages and 0.6 points for ARMs. "Treasury rates continued to drop this week to 45-year lows in anticipation that the Fed may cut rates, given the continuous weakness in the economy and the absence of any inflationary pressures," said Frank Nothaft, Freddie Mac's chief economist. "Mortgage rates, following bond yields, also continued to fall to yet another record low. Because of the drop in rates since last month, we have raised our forecast for origination volume for 2003 to almost $3.3 trillion in expectation of higher home sales and greater refinancing levels." A year ago, the average 30-year and 15-year fixed rates were 6.71% and 6.17%, respectively, and the average one-year ARM rate was 4.67%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

David Glenn, who was fired June 6 by Freddie Mac, is walking away from the company with $12.7 million in stock but is forfeiting $11.1 million in stock grants, according to company documents.Leland Brendsel, who retired from Freddie Mac on Monday -- the same day the company announced his retirement (and Mr. Glenn's firing) -- leaves the secondary giant with almost $30 million in stock and another $21.1 million in stock grants that vested when he left. (Their stock holdings are based on a share price of $50.) Documents released by Freddie Mac note that Mr. Glenn is not entitled to any compensation after June 6 because he was "terminated for cause." As of MortgageWire's deadline, Freddie Mac had not yet released the compensation package for Vaughn Clarke, whose resignation also came on Monday. All three men left the company in the wake of a widening accounting scandal that has roiled the bond and mortgage markets.

BRT Realty Trust, Great Neck, N.Y., has announced the expansion of its $15 million secured credit facility with North Fork Bank to $30 million.The real estate investment trust said the maturity date of the facility has been extended from Aug. 1, 2004 to June 1, 2006. BRT, a mortgage REIT, can be found online at http://www.brtrealty.com.

Ramco-Gershenson Properties Trust, Southfield, Mich., has reported the completion of a public offering of 2.15 million shares of common stock at a net price (after the underwriting discount) of $23.65 per share.The real estate investment trust estimated that the proceeds of the sale will total about $50.65 million, which will be used to pay down balances under its secured and unsecured credit facilities. The shopping center REIT can be found on the Web at http://www.ramcogershenson.com.

Lexington Corporate Properties Trust, New York, has priced an offering of $79 million of cumulative redeemable preferred stock at $25 per share.The securities will pay a yearly dividend of $8.05, the real estate investment trust said. Lexington plans to use the proceeds to repay $78.1 million of mortgage debt bearing interest of 8.05% and will pay a prepayment penalty of $6.5 million on the same. The REIT, which has interests in office, industrial, and retail properties, plans to get the preferred stock listed on the New York Stock Exchange under the symbol "LXP prB." Bear Stearns and A.G. Edwards & Sons are the lead managers of the offering, which is expected to close June 19.

U.S. officials are planning to suggest a change in the capital treatment for certain types of commercial real estate loans under the proposed Basel II international banking risk standards.Although many U.S. supervisors have generally been treating CRE loans as more risky than commercial and industrial loans, new data analysis suggests that some commercial mortgages carry risk equivalent to that of C&I loans, Federal Reserve Board Vice Chairman Roger W. Ferguson Jr. said in a July 10 speech. "Consequently, the [advance notice of proposed rulemaking] to be released next month will propose that all CRE loans in the United States for in-place properties be on the low asset correlation function, as all C&I loans are," he told the Institute of International Bankers in New York. The Federal Reserve can be found online at http://www.federalreserve.gov.

William P. Hankowsky, president and chief executive officer of Liberty Property Trust, has been named to the additional post of chairman of the real estate investment trust's board of trustees.The former chairman of the Malvern, Pa.-based REIT, Willard G. Rouse III, died on May 27. Liberty, which specializes in office and industrial properties, can be found online at http://www.libertyproperty.com.

Regina M. Lowrie, president, chief executive officer, and a founder of Gateway Funding Diversified Mortgage Services, has been nominated as vice chair-elect of the Mortgage Bankers Association of America.Ms. Lowrie will become the first woman to be elected an officer of the MBA at the association's 90th Annual Convention Oct. 19-22 in San Diego. She now serves as the chair of the MBA's Residential/Single-Family Board of Governors and has been on the MBA board of directors since 1996, the MBA said. Ms. Lowrie has also served as the chair of the association's political action committee, MORPAC, and as a member of various other committees.

Three classes of Bear Stearns Commercial Mortgage Securities Inc. commercial mortgage pass-through securities, series 2000-LCON, have been downgraded by Moody's Investors Service.The downgrades were as follows: class C, from A2 to A3; class D, from Baa2 to Ba1; and class E, from Baa3 to Ba2. The ratings on classes A, X-1, X-2, and B of the same deal were affirmed. The certificates are supported by a first mortgage lien on fee and leasehold interests in the Wyndham El Conquistador Resort & Country Club, a full-service luxury resort in Las Croabas, Fajardo, Puerto Rico. Moody's said it reviewed the resort's property operations for 2002 and 2003 as well as the advance-booking pace and inventory reports. Performance has declined, primarily due to corporate cutbacks on nonessential travel and (to a lesser extent) on slower leisure travel, the rating agency said. The loan-to-value ratio for the loan is currently 70.6%, compared with 63.1% at securitization. Moody's can be found online at http://www.moodys.com.

The Market Composite Index, an overall measure of mortgage applications, fell to 1684.6 on a seasonally adjusted basis during the week ended June 6 from a record high of 1856.7 the week before, according to the Mortgage Bankers Association of America's Weekly Mortgage Applications Survey.On an unadjusted basis, applications were up 13.1% on the week and 193.8% from the level recorded a year earlier. On a seasonally adjusted basis, the Purchase Index decreased from a record high of 460.5 to 418.9, and the Refinance Index fell from a record high of 9977.8 to 9046.9. Refinancings represented 76.9% of total applications, up from 76.7% the previous week, while adjustable-rate mortgages accounted for 14.0%. The average contract interest rate for 30-year fixed-rate mortgages fell from a survey-record low of 5.13% to a new low of 5.06%, and points (including the origination fee) increased from 1.41 to 1.53 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mbaa.org.