Originations

Insignia Financial Group Inc., New York, and CB Richard Ellis, Los Angeles, have announced an agreement with Island Fund I LLC under which Island Fund will buy all Insignia's real estate investment assets and CBRE will increase the purchase price for Insignia stock in their previously announced merger.The total consideration will be increased from $11.00 per share to $11.156 per share, provided that the asset sale is completed before the merger and certain other conditions are met, the companies said. Island Fund is a newly formed entity controlled by Andrew L. Farkas, Insignia's chairman and chief executive officer. The Island Fund transaction was approved by the boards of Insignia and CBRE, but the merger is subject to approval by Insignia's shareholders. The companies can be found online at http://www.cbre.com and http://www.insigniafinancial.com.

RBC Mortgage, Chicago, has inked a deal to purchase the wholesale lending division of Bank One Corp., Chicago. No purchase price was disclosed.The move takes Bank One totally out of the wholesale market for both first and second residential liens. A spokesman for Bank One told MortgageWire that the bank decided to exit the wholesale arena because "we don't have the scale to compete." The bank will continue to make first and second liens through its bank imprint. In a prepared statement, RBC chief operating officer Dave Matthews said, "We will gain significant expertise in home equity operations, which will allow us to build a national home equity business, one of our key strategic initiatives." RBC officials could not be reached for further comment by MW's deadline. According to figures compiled by National Mortgage News, Bank One is the 37th-largest wholesaler in the United States, and RBC is 38th, based on first-quarter survey results. The two firms together would rank 28th based on first-quarter wholesale production. RBC is owned by Royal Bank of Canada. (See the June 2 issue of NMN for full details.)

The average 30-year fixed mortgage rate fell to another survey-record low of 5.31% for the week ending May 30 from 5.34% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate was unchanged at 4.73%, and the average rate for one-year Treasury-indexed adjustable-rate mortgages rose from 3.61% to 3.63%. Fees and points averaged 0.6 points for all three mortgage categories. "Low rates, combined with the uptick in consumer confidence, are strong indications that the housing market will continue to prosper into the summer months," said Frank Nothaft, Freddie Mac's chief economist. "As it is, both new- and existing-home sales in April were stronger than originally expected." A year ago, the average 30-year and 15-year fixed rates were 6.76% and 6.22%, respectively, and the average one-year ARM rate was 4.76%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

Bernie Ockrim was been named vice president of national sales at Express Financial Services, an appraisal, title, and closing management company based in Pittsburgh.Mr. Ockrim is a veteran of more than 20 years in the mortgage industry in both residential and commercial real estate lending, the company said. Express Financial can be found on the Web at http://www.efstitle.com.

Willard G. Rouse, the founder and former chairman, president, and chief executive officer of Liberty Property Trust, has died of lung cancer at the age of 60, according to the company.Mr. Rouse founded the company, then called Rouse & Associates, in 1972 along with George Congdon, David Hammers, and Menard Doswell. At the time of his death, he was a member of the board of Liberty, a real estate investment trust based in Malvern, Pa., a suburb of Philadelphia. "Bill was, simply, our hero," said Bill Hankowsky, Liberty's CEO. "He cannot be replaced, but the culture of this company is indelibly stamped with his uniquely moral view of the individual's place in the corporation, and the corporation's responsibility to the world." The REIT said Mr. Rouse was responsible for the creation of more than 50 million square feet of office and industrial space in the United States and the United Kingdom, as well as hotels, urban and suburban housing, and the redevelopment and restoration of Philadelphia landmarks. The REIT can be found online at http://www.libertyproperty.com.

Homebuilders Financial Network, Miami Lakes, Fla., has announced new development deals to create builder-based mortgage companies for three regional builders.HFN said it will establish and manage private-labeled lending operations for Duffy Homes, Columbus, Ohio; Garbett Construction, Sandy, Utah; and Ameri-Con Homes, Beachwood, Ohio. Touting its approach as a "mortgage-company-in-a-box," HFN said it consolidates the home sales of its clients and obtains financing from large mortgage investors. "In-house lending raises a level of comfort for the homebuyer by allowing builders to walk buyers through the entire home-purchase cycle," said Tom Meyer, HFN's co-founder and president. The company can be found online at http://www.hfn.com.

The Market Composite Index, an overall measure of mortgage applications, climbed to 1634.6 on a seasonally adjusted basis during the week ended May 23 from 1562.8 the week before, according to the Mortgage Bankers Association of America's Weekly Mortgage Applications Survey.On an unadjusted basis, applications were up 4.3% on the week and 202.4% from the level recorded a year earlier. On a seasonally adjusted basis, the Purchase Index declined slightly from 395.8 to 395.7, and the Refinance Index rose from 8351.1 to 8840.9. Refinancings represented 77.1% of total applications, up from 76.0% the previous week, while adjustable-rate mortgages accounted for 13.4%. The average contract interest rate for 30-year fixed-rate mortgages fell from a survey-record low of 5.17% to a new low of 5.14%, and points (including the origination fee) decreased from 1.40 to 1.29 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mbaa.org.

Simon Property Group, Indianapolis, and Westfield America Inc., the U.S. subsidiary of an Australian property trust, have announced the extension until June 27 of their all-cash offer of $20 per share for common shares of Taubman Centers Inc.As of May 22, Taubman shareholders had tendered (and not withdrawn) approximately 15.02 million shares, Simon said. Simon and Westfield, two retail real estate investment trusts, are engaging in a hostile attempt to take over Taubman, a REIT based in Bloomfield Hills, Mich.

Lodgian Inc., an Atlanta-based owner and operator of hotel property, has announced the completion of an $80 million financing that brings 18 of its hotels out of bankruptcy.The company, which emerged from bankruptcy in November 2002, also announced that W. Thomas Parrington, a member of its board of directors, has been named interim chief executive officer. The proceeds of the two-year financing were used to settle a loan for the hotels, owned by Lodgian subsidiaries Impac Hotels II LLC and Impac Hotels III LLC, which filed for Chapter 11 bankruptcy protection in December 2001. The loan, underwritten by Lehman Brothers Holdings Inc., has a one-year extension option at a rate of 525 basis points over the London interbank offered rate (but with a floor of 7.25%), Lodgian said. Mr. Parrington is a 30-year veteran of the hospitality industry who replaces David E. Hawthorne. Mr. Hawthorne is leaving Lodgian and has resigned from its board now that the company has completed its court-approved reorganization plan, Lodgian said. The company can be found online at http://www.lodgian.com.

The Texas House of Representatives passed a bill May 25 allowing home equity lines of credit.The measure, long opposed by reluctant Realtors and recently threatened by truant Democrats, allows a line of credit of up to 50% of the fair market value of the home. The Texas Senate passed the same bill 10 days earlier. Since home equity loans are a constitutional issue in Texas -- where the homestead is regularly referred to as sacred -- the legislation cannot become law until the public votes on an amendment to the Constitution in November.

Sales of newly constructed single-family homes rose 1.7% in April, and the peak homebuying months -- March and April -- have now posted equally strong results.The U.S. Census Bureau reported that new-home sales rose from a seasonally adjusted annual rate of 1.01 million in March to 1.03 million in April. The April sales pace is up 12.2% from April of last year. "During the key sales season, things are very positive," said economist Michael Carliner of the National Association of Home Builders. Mr. Carliner noted that interest rates are low, consumer confidence is improving, and the war in Iraq is over. In addition, builders are very positive about the outlook. "There is no indication that things are getting soft" in the housing market, he said.

Sales of existing single-family homes may be on track for another record year, as resales jumped 5.6% in April.The National Association of Realtors reported that existing-home sales rose from a seasonally adjusted annual rate of 5.53 million in March to 5.84 million in April. NAR chief economist David Lereah noted that the record low interest rates in March fueled demand for existing homes and that mortgage rates have dropped even lower since then. "This year 2003 may end up being the best year ever in housing," Mr. Lereah told reporters. The NAR is projecting that resales will fall just below the 2002 record of 5.57 million units sold." As we continue to get more and more data like this, we may have to revise that upwards," he said. The NAR reported that sales were up in all four regions of the United States, and the inventory of unsold homes rose to a 5.1-month supply -- the highest level since September 1991. The NAR economist said there is usually a jump in inventories in April, and historically inventories are still lean. The NAR can be found on the Internet at http://realtor.org.

Public Storage Inc., Glendale, Calif., has announced that it will call for the redemption of its series C adjustable-rate cumulative preferred stock on June 30.The real estate investment trust said the redemption price will be $25 per share plus accrued dividends from April 1, 2003 through the redemption date. The REIT can be found on the Web at http://www.publicstorage.com.

Standard & Poor's Ratings Services has released a report containing its updated legal and structured finance criteria for U.S. commercial mortgage-backed securities.Titled "U.S. CMBS Legal and Structured Finance Criteria," the highlights of the publication include revised environmental, institutional eligibility, and defeasance criteria and a new subsection on asset-backed loan criteria, S&P said. "This version addresses the novel features and changes that have arisen within the commercial mortgage securitization market over the past several years," said Gale C. Scott, a managing director in S&P's Global Real Estate Finance group. The report can be found by clicking Credit Ratings Criteria (under Fixed Income) at http://www.standardandpoors.com, clicking More (under Ratings Criteria), and scrolling down to the report.

Apartment Investment and Management Co., Denver, has announced modifications to its revolving credit facility and term loan.AIMCO, a real estate investment trust, said the modifications include a temporary increase in the 80% covenant limit on distributions as a percentage of funds from operations, and the authority to redeem preferred stock with new common or preferred stock or sales proceeds. The increased covenant limit will be 88% for the quarters ended June 30, 2003 through March 31, 2004, and 85% for the quarters ended June 30, 2004 through Sept. 30, 2004. The limit will revert to 80% thereafter. The apartment REIT can be found online at http://www.aimco.com.

Hilton HHonors and Delta Air Lines have announced partnerships with Awards for Mortgage and Real Estate, a company that offers rewards for mortgage- and relocation-related expenditures.The alliance with HHonors, a Hilton guest reward program, will offer members residing in the United States a chance to earn more than 500,000 bonus points on a typical home by taking advantage of mortgage, real estate, and van line services, Hilton said. HHonors members can earn 6,500 points for each $10,000 of a home purchase/sale price; 3,250 points for each $10,000 financed or refinanced on a home or borrowed as a home equity loan; and 2,500 points for each $1,000 paid on van line moving services. The partnership with Delta will enable its SkyMiles members to earn 3,000 miles for each $10,000 of a home purchase/sale price; 1,300 miles for each $10,000 financed or refinanced on a home or borrowed as a home equity loan; and 1,000 miles for each $1,000 paid on van line moving services. Hilton and Delta cited Chase Home Finance, CitiMortgage, and Wachovia as participating lenders.

The thrift industry posted record profits of $3.3 billion in the first quarter even though one- to four-family originations declined slightly from the record set in the fourth quarter.The Office of Thrift Supervision reported that originations totaled $145.4 billion in the first quarter, down from the fourth-quarter record of $159.6 billion. Refinancings of existing customer loans represented 55% of originations in the first quarter, compared with 49% in the fourth quarter. "Continuing the trend from 2002, the favorable interest rate environment in the first quarter of 2003 continued to support a mortgage refinancing boom, leading to record strength in earnings, profitability, and capital for the thrift industry," OTS Director James Gilleran said. The previous earnings record of $3.03 billion was set in the first quarter of 2002.

The management-backed nominees for the board of directors of Post Properties have apparently been re-elected by a wide margin, defeating nominees proposed by John A. Williams, the founder and largest shareholder of the Atlanta-based real estate investment trust.Post estimated that its nominees would wind up with more than 65% of the votes cast at its annual meeting once the results have been certified. Mr. Williams, who owns about 7.3% of Post's outstanding shares, led a proxy fight challenging the disclosure and governance practices of the multifamily REIT. "While we are disappointed with initial indications of today's voting results, we are pleased that Post shareholders will ultimately benefit from our efforts," Mr. Williams said. "During the proxy contest, in response to our platform, the company agreed to reverse its previous intention to enact additional anti-takeover measures and instead adopted many of the shareholder-friendly corporate governance initiatives we proposed." Post chairman Robert C. Goddard III said the outcome "clearly indicates that our shareholders believe that the current board and management is the right team to create value for our shareholders." Post can be found online at http://www.postproperties.com.

The average 30-year fixed mortgage rate fell to a yet another survey-record low of 5.34% for the week ending May 23 from 5.45% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate fell from 4.84% to 4.73%, and the average rate for one-year Treasury-indexed adjustable-rate mortgages fell from 3.67% to 3.61%. Both represent survey-record lows. Fees and points averaged 0.7 points for all three mortgage categories. Frank Nothaft, Freddie Mac's chief economist, attributed the new lows to speculation about what Federal Reserve Chairman Alan Greenspan was going to say about deflation in scheduled congressional testimony, and whether the Fed would buy long-term Treasury bonds to try to prevent deflation. A year ago, the average 30-year and 15-year fixed rates were 6.81% and 6.28%, respectively, and the average one-year ARM rate was 4.85%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

Corporate Office Properties Trust, Columbia, Md., has announced the sale of 4.6 million common shares of beneficial interest to Legg Mason Wood Walker Inc. and McDonald Investments Inc.The real estate investment trust said the net proceeds of approximately $69 million ($15.03 per share) will be used to acquire a 100%-leased, 404,665-square-foot office building in Herndon, Va. The underwriters have a 30-day overallotment option to purchase up to an additional 690,000 shares. The REIT can be found online at http://www.copt.com.