Originations

Market Street Mortgage, Clearwater, Fla., has acquired Memorial Park Mortgage Ltd., a Houston-based mortgage lender.Financial terms were not disclosed. Market Street is the retail mortgage subsidiary of NetBank, Atlanta, and the deal adds to the companies' strategic plan to build a broader presence in the Southwest. Memorial Park Mortgage's founder and chief executive, Mark Cady, will manage Market Street's Texas operations. For the remainder of this year, the unit will continue to operate under the Memorial Park name. Market Street said it would continue to pursue select retail branch acquisitions.

Fitch Ratings has assigned primary, master, and special servicer ratings to Washington Mutual Bank FA for its servicing of commercial mortgage-backed securities.The ratings were as follows: primary servicer, CPS3-plus; master servicer, CMS3; and special servicer, CSS3. Fitch said the ratings reflect "the experienced servicing staff and the solid experience of the management team." Master and primary servicer functions are handled by the bank Specialty Finance Group's recently formed National Commercial Operations Center in Coppell, Texas. Fitch rates commercial mortgage servicers on a scale of 1 to 4, with 1 being the highest rating. The rating agency can be found online at http://www.fitchratings.com.

Wells Real Estate Funds, Atlanta, has closed on a new $500 million unsecured revolving credit facility with a group of 20 lenders.The interest rate on the facility will range from 137.5 to 162.5 basis points over the London interbank offered rate, depending on the company's leverage, the investment management firm said. It matures in April 2005 and replaces the company's $110 million secured revolving credit facility. The new facility was arranged and syndicated by Banc of America Securities LLC. The syndication agent is Wells Fargo, and Commerzbank and Key Bank are the documentation agents. The company can be found online at http://www.wellsref.com.

Jerry Earnest has been promoted to executive vice president of GMAC Commercial Mortgage Corp., Horsham, Pa., where he will head the newly formed Specialty Lending Group.In that capacity, Mr. Earnest will oversee the company's Healthcare Financing Group, Hospitality Industry Division, and the Golf Finance Group, and he will directly manage the latter two units, the company said. Before joining GMACCM, Mr. Earnest was a principal of Lexington Mortgage Co., which was acquired by GMACCM in March 1996. The company can be found online at http://www.gmaccm.com.

John Williams, former chief executive officer of Atlanta-based Post Properties, is proposing Edward Lowenthal for the position of president and CEO of the multifamily real estate investment trust if Mr. Williams' director nominees are elected to the Post board.Mr. Lowenthal, the co-founder of Wellsford Residential Property Trust (which was merged into Equity Residential Properties in 1997), has more than 20 years of experience in the real estate industry, according to Mr. Williams. Mr. Lowenthal will remain a trustee of Equity Residential until May 30. "We will immediately form a special committee of the board with a mandate to explore all ways to enhance shareholder value, including a potential sale or merger of the company," Mr. Lowenthal said. Responding to Mr. Williams' announcement, Post Properties said, "We find it hard to believe that Mr. Williams is spending more than $6.3 million on this proxy contest with an expectation that Mr. Lowenthal would act independently of him. When Mr. Williams praises Mr. Lowenthal as the right person for the job, keep in mind that this is exactly what he said about Dave Stockert when Mr. Stockert succeeded him as CEO last summer."

The rating on class B-2 of Nomura Asset Securities Corp.'s commercial mortgage pass-through certificates, series 1995-MDIII, has been lowered from B to CCC by Standard & Poor's.The rating on class B-1 of the same deal was placed on CreditWatch with negative implications. S&P attributed the rating actions to concerns about the decline in the performance of the 305-room Grand Cayman Marriott Beach Resort. A $35.2 million mortgage secured by the hotel was transferred to the special servicer in February after the borrower failed to maintain the debt service coverage ratio required by the loan documents, S&P said. "This was coupled with the borrower's request for debt service relief and use of required reserves to cover operating expenses," the rating agency said.

Homestar Mortgage Services, Atlanta, has acquired the assets of The Mortgage Studio, a privately held mortgage broker based in midtown Atlanta.Rick E. Floyd, Homestar's national production manager and executive vice president, said the deal was made because of Mortgage Studio's "outstanding track record of success in the in-town Atlanta market, its innovative portfolio of products, its reputation for excellent customer service, and its staff of dedicated mortgage professionals." Mortgage Studio was founded in 1996 by Carol Donnelly.

An anti-predatory-lending bill that contains among the strictest limits on high-cost loans in the country has been signed into law by New Jersey Gov. James McGreevey.In negotiations, assignee liability -- an issue of major concern to the mortgage industry -- was the biggest point of contention, and a form of assignee liability was included in the final law, the New Jersey Home Ownership Security Act of 2002. ACORN, a consumer group that was involved in the negotiation process, called the law “very, very strong and very, very balanced.” Bob Levy, executive director of the New Jersey League of Lenders, who was also involved in the negotiations, said the law is “workable” despite some ambiguities.

Half the people who have asked for relief under a program to aid borrowers victimized by predatory lenders were not duped at all, according to the National Community Reinvestment Coalition."They believed they were wronged, but it was really a matter of education," said David Berenbaum of the NCRC, which operates the Consumer Rescue Fund with a $12 million commitment from Household Finance. About 500 consumers have come forward in the first year of the program, "a much larger number than we expected," he said at the Mortgage Bankers Association of America's Subprime Lending Conference in Washington. But only 250 were actually victims of abusive lending tactics, he said. The other 250 needed financial education or counseling to understand the issues. Of the group who were scammed, about 45% received mortgages through brokers who were nowhere to be found once the loans were placed with funding lenders. Moreover, nearly two-thirds of the victims had prime credit before they took out subprime loans and could have qualified for a conventional mortgage at rock-bottom rates. But in "well over" half the situations in which borrowers were wronged, those who had direct contact with lenders were able to get their loans rewritten and are now satisfied, Mr. Berenbaum said. In 10% of the instances, however, borrowers' problems could not be solved.

ACORN is targeting Well Fargo & Co., San Francisco, to get the well-known banking company to reform the lending practices of its two finance companies.The community activist group alleges that Wells Fargo Funding and Wells Fargo Financial are making subprime mortgage loans with the same high fees and rates and terms as other predatory lenders that have entered into large settlements with regulators. "We are trying point out that Wells, despite being a national bank, has subprime affiliates engaging in all of these predatory practices," ACORN spokesman David Swanson said. In a 15-page report, ACORN said it found that prime borrowers are being charged high fees and rates by the finance companies, instead of being referred to Wells Fargo's prime mortgage units. In addition, some loans appear to have fixed rates, but it is really a floor and an 11% interest rate can go up to 17%, the group said. "We will be working to build pressure to reform Wells Fargo over the coming weeks and months," the ACORN spokesman said. "And we will see what kind of reaction we get out of them." In response, a Wells Fargo spokeswoman told MortgageWire that the practices described by ACORN are "totally contrary to our ethical standards and our business practices. It is simply not the way we do business."

Encore Bank, Houston, has announced the expansion of its commercial real estate division with the addition of three lending officers.Greg Guarino was named senior vice president of the division, and David Webster and John Gonzales have been named vice presidents, the bank said. Mr. Guarino has more than 25 years of experience in CRE lending, most recently with Wells Fargo Bank, Encore said. Mr. Webster and Mr. Gonzales also come to Encore from Wells Fargo Bank.

Countrywide Financial Corp., Calabasas, Calif., has announced the promotions of seven executives.David Sambol, a senior managing director and chief of production, was promoted to executive managing director for loan originations and capital markets. Ann McCallion, chief administrative officer, was promoted to senior managing director of operations. Tom Boone, a senior managing director and chief of global processing, was promoted to senior managing director and chief administrative officer. Richard DeLeo, a managing director of loan administration, was promoted to senior managing director of loan administration. Susan Bow, executive vice president and senior deputy general counsel, was promoted to managing director, general counsel of corporate and securities, and corporate secretary. John Ardy, executive vice president for performance management, was promoted to managing director for corporate operations management. And Mark Elbaum, an executive vice president, was promoted to managing director and chief financial officer for the mortgage production segment.

A. William Schenck III, a former chairman and chief executive officer of Fleet Mortgage Group, has been confirmed as Pennsylvania's secretary of banking.Mr. Schenck, 60, joined the administration of Gov. Ed Rendell after 34 years in the banking industry. As secretary of banking, he will serve as chairman of the board of the Pennsylvania Housing Finance Agency and will be a member of the boards of various state authorities. "In confirming Bill Schenck, the Senate provides Pennsylvania with a highly enthusiastic, consumer-protective banking regulator who knows and understands the needs of the banking industry as well as those of the consumer," Gov. Rendell said. In addition to heading the Columbia, S.C.-based Fleet Mortgage, Mr. Schenck was chairman of the operating committee of Great Western Financial Corp.

ATM Corp. of America, Pittsburgh, has announced a joint venture with America's Mortgage Cooperative Vendor Services LLC to form a national settlement services company.ATM senior vice president Brian Bush will serve as president and chief operating officer of the new company, AMC Lenders Services LLC, which will be located in Pittsburgh. "Previously we have helped build settlement services subsidiaries for large national mortgage lenders such as Countrywide, Citigroup, GMAC Mortgage, Key Bank, and Navy Federal Credit Union," said Francis H. Azur, ATM's president and chief executive officer. He said the joint venture will bring the technology, policies, and procedures of large national mortgage lenders to mid-level lenders. The joint venture partner, America's Mortgage Cooperative Vendor Services, consists of 22 regional mortgage lenders that represent the majority of lenders belonging to America's Mortgage Cooperative LLC.

GMAC Mortgage has launched a new division, CalDirect Home Loans, that will be focused exclusively on the California market.The division is GMAC Mortgage’s third -- the company has run DiTech Funding under its original brand name since its acquisition four years ago. CalDirect is a direct mortgage lender whose calling card will be speed, said Richard Gillespie, the chief marketing officer of GMAC Residential. All mortgages will close within 25 days and will have guaranteed low rates, he added.

A Michigan judge has issued a ruling in the Simon Property Group/Westfield America case against Taubman Centers, and both sides are interpreting the ruling as favorable to their own case.The outcome will depend on whether the Taubmans can vote series B stock they own and block the takeover attempt. According to Simon/Westfield, Judge Victoria Roberts ruled that "the 33.6% Series B shares owned by the Taubman family and friends may not be voted until approved by a majority of disinterested public shareholders in compliance with the Michigan Control Share Act." However, the Taubmans contend that the court rejected Simon's claim that they cannot vote their shares and enjoined only the voting of "those shares represented in the voting agreements previously entered with Robert Taubman," representing only about 3% of the shares (rather than the entire 33.6%). This interpretation would mean that the Taubmans could continue to block the takeover attempt. Analysts with JP Morgan say the chances for a sale/takeover of Taubman "are higher than they were a few months ago." The market also appears to take this view, as Taubman common stock is now trading closer to the $20 price offered by Simon/Westfield. However, JP Morgan said it expects the Taubmans to continue to "fight hard, and this process will likely continue to drag on for some time."

Private mortgage insurance companies had a record month in March in primary new insurance written and the number of applications received, according to data from the Mortgage Insurance Cos. of America.MICA redefined its terms in August 2001, so a comparison to data received before then is difficult. The mortgage industry saw record production volumes in 2002 and is likely to see a new record this year. Mortgage insurance volume is highly linked to origination volume. In March, there was $43.26 billion of primary insurance written, topping the old record of $38.8 billion set in December 2002. By type, traditional insurance (written on prime loans) totaled $28.3 billion for the month, the second-best month ever for the category. Bulk insurance written (mostly subprime) was $14.9 billion, topping the old record of $14.7 billion in July 2002. For the first time under the new definitions, applications received topped 300,000 (328,435), rising more than 39% from the level recorded in February. Pool risk written in March totaled $370.3 million. For the second consecutive month, cures outnumbered defaults, 50,059 to 47,646, for a ratio of 105.1%. MICA can be found on the Web at www.micadc.org.

The typical American family's ability to purchase a median-priced existing home increased in the first quarter to the highest level in 30 years, according to the National Association of Realtors.The NAR's composite Housing Affordability Index stood at 144.0, up from 140.7 in the fourth quarter and from 135.8 a year earlier. The previous high for the index was 147.9 in 1973. The latest index number means that the typical household in the United States had 144% of the income needed to buy a home at the first-quarter median existing-home price, which was $161,500. NAR chief economist David Lereah said the affordability index may decline several percentage points by the fourth quarter as a result of a gradual rise in mortgage interest rates, but that affordability conditions should remain favorable. The index measures affordability for homebuyers making a 20% downpayment. An index level of 100 is defined as the point at which a median-income family has the income necessary to buy a median-priced existing home. The NAR estimated the median family income to be $52,929 in the first quarter. The NAR can be found online at http://realtor.org.

Saxon Mortgage, Glen Allen, Va., which has been funding nonconforming product for as long as anyone can recall, is jumping into the 'A' paper market by aligning itself with Fannie Mae.Company chief executive Mike Sawyer told MortgageWire that Saxon hopes to be up and running with its conforming option for borrowers by the end of May. "We'll sell the loan to Fannie and the servicing to someone like Countrywide," he said. According to fourth-quarter figures compiled by the Quarterly Data Report, a MortgageWire affiliate, Saxon is the 22nd-largest subprime lender in the United States. The nondepository went public about 18 months ago and trades at about $15 a share, $2 shy of its 52-week high. Its low is $8.15. (For more details, see the May 5 issue of National Mortgage News.)

The subprime division of Countrywide Home Loans, Calabasas, Calif., is beginning to see an increase in mortgage fraud.Speaking on a panel at a subprime conference sponsored by the Mortgage Bankers Association of America, Countrywide senior vice president David Farrell said fraud appears to be on the rise again. "We had a rash of it last year," said Mr. Farrell, noting that instances of fraud come and go. Mr. Farrell voiced particular concern about income fraud, in which a consumer scans his/her pay stubs into a computer, creating new pay stubs that show a higher income amount. "Some of these things look great," he said, "but they're as phony as a $3 bill." He said in some cases loan brokers assist in the fraud. Countrywide, though, conducts job verification checks to root out pay stub fraud, he said. Mr. Farrell told MortgageWire that some scam artists even use Quicken tax software products to create new income tax returns. Countrywide can be found online at http://www.countrywide.com.