Originations

Kramont Realty Trust, Plymouth Meeting, Pa., is purchasing four shopping center properties in the New York region through a joint venture with SSR Realty Investors.The real estate investment trust said it is also buying one retail property for its own account, through a combination of cash and Kramont shares. The joint venture is owned 80% by Tower, a Metropolitan Life Insurance Co. account that is being managed by SSR. All the joint venture properties, as well as Campus Plaza, the 160,646-square-foot retail property that Kramont is acquiring for itself, are located on Vestal Parkway (Route 434), an area that Kramont sees as having "extremely high barriers to entry." The four joint venture properties are the 278,017-square-foot Town Square Mall; the 167,332-square-foot Parkway Plaza; the 92,328-square-foot Shoppes at Vestal; and the 13,487-square-foot Pier I shopping Center. Kramont can be found online at http://www.kramont.com.

In a salute to Homeownership Month, Wachovia Corp., Charlotte, N.C., has announced that its contribution to affordable housing and community development "across the East Coast" totaled over $19 billion in 2002 and that it expects to "exceed those numbers" this year.Jane Henderson, Wachovia's director of community development, said Wachovia helped 450 lower-income families achieve homeownership each week during 2002, creating new jobs in over 650 neighborhoods. This year, Wachovia said it expects to offer financial literacy training to at least 5,000 individuals and to invest another $150 million it recently received as a New Markets Tax Credit from the U.S. Treasury for the construction of for-sale affordable housing units.

The California Housing Finance Agency has announced the adoption of a $12.5 billion, five-year business plan that will "dramatically increase" its investment in affordable housing and other housing-related activities.CalHFA said it plans to lend more than $6.76 billion over the next five years for the purchase of single-family homes, including downpayment assistance and self-help builders' assistance. The plan also calls for the provision of $3.5 billion in mortgage insurance, over $1.9 billion for new construction, and $1.1 billion in new affordable multifamily rental units, the agency said. CalHFA's expansion was made possible by voter approval last year of Proposition 46, the Housing and Emergency Shelter Trust Fund Act, which authorized $2.1 billion for state housing programs. The agency said this is "the largest investment in housing support by any state in history." The agency can be found online at http://www.calhfa.ca.gov.

Amy Brandt has been named president of WMC Mortgage Corp., a wholesale, subprime lender based in Woodland Hills, Calif.Ms. Brandt has been WMC's head of production since the company's changeover to a technology-based wholesale lending platform in March 2000. During that time, volume has grown tenfold to more than $550 million per month, WMC said. The company can be found online at http://www.wmcdirect.com.

Criimi Mae will "someday" have to enter the origination business to make loans for securitization, according to Barry Blattman, president and chief executive officer of the Rockville, Md.-based company.Speaking at a panel discussion on mortgage REITs at the National Association of Real Estate Investment Trusts investor convention, Mr. Blattman said, "As Criimi evolves, we would look at ways to be the originator of product." Mr. Blattman noted that Criimi Mae has not been much affected by refinancing and will continue to do fine "if the Fed keeps it up." He said Federal Reserve Board Chairman Alan Greenspan "has done a great job of jawboning," adding that he has also thrown in "the red herring of deflation." Mr. Blattman said higher rates are likely at some point, but that "the Fed wants to keep the refi party going -- and it is going." Criimi Mae can be found on the Web at http://www.criimimaeinc.com.

The firing of Freddie Mac president and chief operating officer David Glenn was prompted by "his lack of cooperation and candor" with a special counsel appointed by the board of directors' audit committee to investigate accounting errors.Mr. Glenn did not provide "open and candid responses to the questions he was asked," Freddie Mac's new president and chief executive Gregory Parseghian said during a conference call. When he submitted personal diaries to the special counsel, he admitted that they were altered and pages were missing. Mr. Parseghian also said Mr. Glenn provided information about what was altered, but the new CEO said he didn't know whether Mr. Glenn had provided any information from the missing pages. Freddie Mac officials emphasized that they are not characterizing Mr. Glenn's misconduct as fraud, and they maintain that it does not have any effect on the economics or value of the publicly traded company or its risk management position. Meanwhile, the Office of Federal Housing Enterprise Oversight said it is initiating an investigation into misconduct by Freddie Mac employees. Mr. Parseghian, who met with OFHEO Director Armando Falcon Jr. early Monday morning, said he is only aware of one employee who is a target of the OFHEO investigation. The resignation of executive vice president and chief financial officer Vaughn Clarke is not linked to misconduct, he said.

Mortgage giant Freddie Mac shocked the mortgage and bond markets Monday morning, announcing that its long-time chairman and chief executive Leland Brendsel had suddenly retired and that president and chief operating officer David Glenn had been fired.The company said Mr. Glenn had been let go because of "serious questions as to the timeliness and completeness of his cooperation and candor with the board's audit committee...." The company -- which is in the midst of reauditing its books -- said executive vice president Vaughn Clarke had resigned as well. The firm's stock price immediately plunged as news of the shakeup spread through the mortgage industry. One consultant close to Freddie Mac said he expects more firings and resignations in the weeks ahead. Meanwhile, Freddie's regulator, the Office of Federal Housing Enterprise Oversight, issued a statement saying it had created a special investigative team "to assume the review of accounting practices relevant to the restatement process." In the same statement, OFHEO blames Freddie Mac's reaudit woes on "management misjudgments that led to a misapplication of GAAP principles and disclosures of employee misconduct, specifically, altering and failing to supply documents relevant to the restatement process." In the wake of the firing and resignations, Freddie Mac named Gregory Parseghian as its president and CEO, and Shaun O'Malley as non-executive chairman. Paul Peterson has been named COO, and Martin Baumann CFO. In a conference call Monday, Mr. Parseghian tried to calm investors as well as the mortgage market. "Our key assets and capabilities are undiminished by the changes announced today," he said. "We have superior financial strength." Freddie Mac can be found online at http://www.freddiemac.com.

The shareholders of Vancouver, Wash.-based Today's Bancorp Inc. has approved the merger of that community bank holding company with Riverview Bancorp Inc., another community bank holding company based there.The deal was originally announced in February and was valued then at approximately $16.7 million. The merger, which has now been approved by the directors of both companies, is expected to close in July.

Webster Financial Corp., Waterbury, Conn., has reached a definitive agreement to acquire North American Bank and Trust Company, a Conn. state-chartered commercial bank also in Waterbury, for a combination of stock and cash valued at approximately $30 million.North American's board has already approved the deal, which must now be voted on by the company's shareholders. Webster expects the deal to close in the fourth quarter. Among its other holdings, Webster is majority owner of Chicago-based Duff & Phelps LLC.

The Mortgage Bankers Association of America has launched a new online "Resource Center for Expanding Homeownership" designed to provide industry professionals with resources that will assist them in their efforts to serve minority borrowers.The MBA said it designed the site to help support President Bush's efforts to improve the lagging homeownership rate of minorities and as part of "Homeownership Month." Among the center's resources are a "consumer education" tool kit created to help mortgage professionals conduct homebuyer fairs and engage in other consumer education efforts. The resource center also includes a list of what the trade group considers to be models of successful housing partnerships. The resource center can be accessed through the MBA's website. The MBA can be found online at http://www.mbaa.org.

Federal regulators are giving lenders a Web-based tool for figuring out the interest rate spreads on subprime loans that have to be reported under new Home Mortgage Disclosures Act requirements that go into effect Jan. 1.The Federal Financial Institutions Examination Council developed the "Rate Spread Calculator" and it is available on the council's website. "The Rate Spread Calculator generates the spread between the annual percentage rate and the comparable treasury security ...," the FFIEC says. Beginning next year, lenders will have to report the pricing on first mortgage loans if the spread equals or exceeds 3 percentage points and on second mortgages if the spread is 5 percentage points or more.

A New York City-area affordable housing initiative launched last year by Countrywide, Fannie Mae and the AFL-CIO Housing Investment Trust has tallied its origination volume.The "Hit Home" initiative has provided $815 million in home mortgages to 1,031 local families the five boroughs. The three partners in the initiative released the results in conjunction with a press conference hosted by Brooklyn borough president Marty Markowitz on June 4 that was marked by the beginning of homeownership month. Local authorities had organized the event in cooperation with participating banks.

Accredited Home Lenders Holding Co., a subprime originator that has been one of the few companies in any industry to bring an initial public offering to market of late, has closed a $300 million securitization of first-lien loans through a subsidiary.Lehman Brothers Inc. was the lead manager of the transaction and Credit Suisse First Boston LLC. was the co-manager. The securitization was comprised of three classes of notes, each backed primarily by a pledge on one of three groupings of mortgages, the San Diego-based lender reported.

Fitch Ratings has become the second major credit rating agency to weigh in on the New Jersey anti-predatory lending law.Fitch will continue to rate residential mortgage-backed securities containing home loans from New Jersey, as long as those loans are not "high-cost home loans" as defined by the law. This reaction is milder than that of Standard and Poor's, which said that it would not rate loan pools containing either high-cost home loans or covered home loans, a category in the law that falls between a regular home loan and a high-cost home loan. Both rating agencies' concerns about the law stem from its assignee liability provisions, which they say makes it impossible to assess the risk carried by affected loans.

The governor of South Carolina has signed an anti-predatory lending bill into law that both industry representatives and consumer advocates appear to be pleased with.The law, based largely on North Carolina's legislation, requires mandatory counseling for high-cost loans, for which the interest rate threshold is set at 8% above the corresponding treasury bill, the same as the federal Home Ownership and Equity Protection Act standard. The points and fees threshold for a high cost loan is 5% of the loan amount. The law also prohibits prepayment penalties for loans of less than $150,000, requires extra disclosure to the borrower concerning points and fees, and pre-empts local legislation on the issue. The South Carolina Mortgage Brokers Association said that it did not anticipate that the market would suffer as a result of the law's passage.

The average 30-year and 15-year fixed mortgage rates have dropped to record lows for the eighth consecutive week, according to Freddie Mac's Primary Mortgage Market Survey.The former fell to 5.26% from 5.31% and the latter edged downward to 4.66% from 4.73% for the week ending June 6. The average rate for one-year Treasury-indexed adjustable-rate mortgages was 3.59%. Fees and points averaged 0.5 points for 30- and 15-year mortgages and 0.6 points for one-year Treasury ARMs. "Anticipation that the Federal Reserve may well cut rates at its next meeting, combined with further weakness in certain sectors of the economy, caused interest rates to fall once again," said Frank Nothaft, Freddie Mac's chief economist, in a written statement released by the government-sponsored enterprise. "However, the economy is poised for growth in the near future and may begin a gentle upswing." A year ago, the average 30-year and 15-year fixed rates were 6.71% and 6.18%, respectively, and the average one-year ARM rate was 4.71%, Freddie Mac reported. Freddie Mac can be found online at http://www.freddiemac.com.

Fannie Mae's federal regulator has revealed that it took its first supervisory action against the government-sponsored enterprise last September after a key indicator of interest rate risk swung in a dangerous direction."A Prompt Supervisory Response action was taken in September 2002 to address concerns regarding Fannie Mae's substantial duration gap imbalance," the Office of Federal Housing Enterprise Oversight revealed in its annual report to Congress on June 4. OFHEO noted that volatile interest rates and sharp increases in mortgage refinancings caused Fannie Mae's duration gap to widen in July and August, which "posed a safety and soundness concern." In mid-September, Fannie Mae publicly disclosed its duration gap hit a negative 14 months in August and tried to assure investors it would quickly fix the imbalance, which it did. At the same time, OFHEO told Rep. Richard Baker, R. La., in a letter that Fannie Mae is operating in a safe and sound manner, despite the mismatch in its duration gap. OFHEO lifted the PSR action in April.

Affordable housing veteran G. Allan Kingston has been named the new chairman of the National Housing Conference, Washington.The first NHC chairman from California, he also is president and chief executive officer of Century Housing Corporation in Los Angeles where to date he has directed real estate financing and development programs adding over 11,000 units of affordable housing in 120 developments across the city's metropolitan area. Mr. Kingston takes the reins from J. Michael Pitchford of Bank of America who now is the immediate past chairman after serving as chairman for three years. Among other things, Mr. Kingston is praised for initiating "More Than Shelter," a funding option for inner city developments that combines housing with after-school, tutoring/college prep programs, transitional housing for homeless veterans, child care, and other services.

Bank of America has reported it will create 15,000 new affordable housing units over the next three years through what it says is a unique partnership with Impact Community Capital LLC of San Francisco, a secondary market investment entity providing $475 million in long-term community development funds.BoA's "Community Impact Loan Program" will provide financing to affordable housing developers, while 10 national insurance companies associated with Impact securitize up to $475 million in such loans over a period of three years. As the volume of loans generated through the community development process increases, BoA will deliver pools of these loans to Impact for evaluation through various major rating agencies. Following this evaluation process, the loans will be packaged into mortgage-backed securities using a format BoA said Impact has developed specifically "for the securitization of large scale pools of affordable housing mortgages." These securities will then be distributed among Impact's insurance companies. The insurers will serve as the ultimate investors.

The Market Composite Index, an overall measure of mortgage applications, hit a new record high of 1856.7 on a seasonally adjusted basis during the week ended May 30, up from 1634.6 the week before, according to the Mortgage Bankers Association of America's Weekly Mortgage Applications Survey.On an unadjusted basis, applications were down 9.2% on the week due to the Memorial Day holiday but up 202.7% from the level recorded a year earlier. On a seasonally adjusted basis, the Purchase Index increased to 460.5 from 395.7, and the Refinance Index climbed to a record high of 9977.8 from 8840.9. (The previous records of 416.0 for purchases and 9387.0 for refinances were set during the week ending March 14.) Despite reaching a record high on the refi index, the percentage of refinancings declined slightly to 76.7% of total applications from 77.1% the previous week, while adjustable-rate mortgages accounted for 13.1%. The average contract interest rate for 30-year fixed-rate mortgages fell from a survey-record low of 5.14% to a new low of 5.13%, and points (including the origination fee) increased from 1.29 to 1.41 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mbaa.org.