Originations

The median home price in California posted year-over-year double-digit gains for the 16th consecutive month, according to the California Association of Realtors.The median price of a home in the state was $352,780, up 15.3% from the revised figure of $305,840 for the comparable period in 2002. During the same period, sales decreased 3.2%, with closed escrow sales of existing single-family detached homes totaling 567,610 at a seasonally adjusted rate. This decline in sales was expected, said Leslie Appleton-Young, CAR's vice president and chief economist. CAR can be found on the Web at http://www.car.org.

A recently enacted Massachusetts law pertaining to real estate investment trusts has resulted in an $11.2 million charge to the earnings of Seacoast Financial Services Corp. for the first quarter, the company has announced.Seacoast, based in New Bedford, Mass., reported a net loss of $3 million ($0.13 per share) for the quarter. Excluding the charge for accrued tax liability related to the new law, which disallows companies from deducting dividends from REIT subsidiaries, Seacoast’s net income was $8.2 million ($0.36 per diluted share). The company can be found online at http://www.seacoastfinancial.com.

Alan P. Hirmes has been named interim chief operating officer of American Mortgage Acceptance Co., a New York-based real estate investment trust that specializes in multifamily housing finance.Mr. Hirmes, a senior vice president of AMAC, replaces Steven Wendel, who is leaving the company to "pursue other opportunities," the REIT said. AMAC said Mr. Hirmes will serve as interim COO while the company searches for a permanent replacement. AMAC can be found online at http://www.americanmortgageco.com.

Nearly 450 members of America's Community Bankers are selling mortgages to Fannie Mae, Freddie Mac, and private wholesalers participating in the trade group's Mortgage Solutions program.Those institutions, which represent nearly 40% of ACB's membership, have sold $10 billion in loans to the wholesalers so far this year. Last year, loan volume totaled $22 billion. The Mortgage Solutions program, which was started in early 2001, offers thrifts and savings banks special deals as well as access to technology. Countrywide Home Loans, Principal Residential Mortgage, and Financial Freedom Senior Funding Corp. also participate in the conduit program. "Collectively, our members have accrued bottom-line value of more than $60 million through the unprecedented member-advantaged features of these programs," ACB spokesman Robert Schmermund said. ACB can be found online at http://www.acbankers.org.

John Williams, the founder and largest equity shareholder of Atlanta-based Post Properties Inc., has mailed proxy materials and is urging shareholders to vote for his favored nominees to be independent directors on the Post board.He is also alleging a lapse in corporate governance at the real estate investment trust. In turn, Post Properties has reported some "major corporate governance initiatives" at the multifamily REIT. Mr. Williams has expressed concern about Post's "continued lack of disclosure in providing shareholders with important explanations and pertinent information." According to him, Post received an all-cash $26 per share offer for the company on March 14 -- representing a premium of over 13% -- from a "reputable real estate investment firm," but the Post board refused to explore it. Mr. Williams also accuses the Post board of not providing adequate information on severance packages paid to chief financial officer Greg Fox and executive vice president Doug Gray. Meanwhile, Post Properties has announced that it will not adopt any shareholder rights plan, or "poison pill" strategy, without the approval of shareholders unless the plan has a short sunset provision. Post can be found online at http://www.postproperties.com.

LandAmerica Financial Group Inc., Richmond, Va., has agreed to acquire Orange County Bancorp and its wholly owned subsidiary, Centennial Bank, Fountain Valley, Calif., for $27.6 million.LandAmerica, a provider of real estate transaction services that has three title insurance subsidiaries, said the price would include the purchase of 100% of Centennial's outstanding stock. Centennial Bank's assets totaled $239.6 million at the end of last year. LandAmerica can be found on the Web at http://www.landam.com.

CBC Cos., Columbus, Ohio, has announced an expansion of its mortgage and real estate services with the acquisition of Nationwide Document Service, Scottsdale, Ariz., and Denali Ventures Inc., Cheyenne, Wyo.The terms of the transactions were not disclosed. CBC said the acquisition of Nationwide Document Service enables it to offer mortgage lenders the services of more than 6,000 trained notaries who can deliver closing documents to the borrower's home or office for signature. With the acquisition of Denali Ventures, CBC said it now offers nationwide property preservation, clean-up service, winterization, and maintenance to lenders with residential real estate owned properties. "With the acquisition of these companies, CBC Companies will be able to offer a comprehensive group of mortgage and real estate services to customers nationwide, saving them both time and money," said Richard Alexander, CBC's director of business development. The companies can be found on the Web at http://www.cbc-companies.com, http://www.nationdocs.com, and http://www.denaliventures.com.

The Charles Schwab Corp., the San Francisco-based parent of discount broker Charles Schwab & Co., has announced that it will offer best-price and service guarantees on home mortgage loans through its newly established Charles Schwab Bank.Schwab said the bank will: beat any lender's price on a home-purchase or refinancing loan by $100, or give consumers $500 ($750 in California) if they close with another lender; approve a loan decision within 24 hours or pay consumers $250; and meet agreed-upon closing dates or reduce a homebuyer's interest rate by one-eighth of a percent for the life of the loan. "Our clients have told us that when it comes to mortgages, they're tired of confusing terms, hidden fees, and inconsistent service," said David S. Pottruck, Schwab's president and co-chief executive officer. "Schwab Bank's value proposition is clear: you will know what it will cost, you will know there is a best-price guarantee, and you will receive a loan decision within 24 hours." Schwab said the bank will offer a wide variety of fixed- and adjustable-rate mortgages as well as "comprehensive support and advice" on all aspects of the loan process. Schwab mortgage consultants can be found online at http://www.schwabbankmortgage.com.

Acadia Realty Trust, New York, has filed a shelf registration statement with the Securities and Exchange Commission to permit the sale of up to $75 million of common or preferred shares of beneficial interest.The shelf registration has not yet become effective, the company said. Acadia, a real estate investment trust that specializes in shopping centers, can be found on the Web at http://www.acadiarealty.com.

While the pace of renters leaving to pursue homeownership is slowing down, conditions in the apartment sector remain soft as a result of the slack job market, according to the National Multi Housing Council."Right now, it's all about jobs," said Mark Obrinsky, chief economist of the Washington-based group, which represents multifamily interests. "Demand for apartment residences remains below normal levels in most metro areas and is likely to stay that way until we see a sustained pickup in employment." The NMHC's recent quarterly survey of apartment market conditions also found that financing conditions improved in the first quarter, with more than a quarter of survey respondents saying that debt financing (mortgage rates and borrowing terms) had improved. In addition, almost 60% of the respondents indicated that equity financing conditions remained unchanged. The market tightness index rose slightly to 32 in April, up from 29 in January, indicating increased market tightness, as manifested in rent increases and vacancy changes, the council said.

Subprime giant First Franklin, San Jose, Calif., has named Andrew Pollock president and chief executive officer.The bank-owned lender promoted Mr. Pollock from his position as chief operating officer. First Franklin is the third-largest wholesale subprime funder in the U.S., and the seventh-largest subprime originator overall, according to figures compiled by the Quarterly Data Report, a MortgageWire affiliate. He joined the company in 1998 and was put in charge of asset quality, corporate underwriting, and compliance. During his career, he has also worked for DV Capital Inc., a venture capital firm, and Wilshire Financial. National City, Cleveland, is the parent company of First Franklin.

Title insurance giant Fidelity National Financial, Irvine, Calif., is contemplating leaving the "golden state" for Florida.The company, a fast-growing bundled-services provider, said it is negotiating with city officials in Jacksonville about relocating its corporate headquarters there. "If the negotiations are successful, the company expects the relocation to take place in phases over the next 12 months," it said in a statement. FNF inherited a 500,000-square-foot office complex in downtown Jacksonville when it closed on its recent acquisition of Alltel Information Services (since renamed Fidelity Information Services.) Over the past few years, Jacksonville has become a call-center mecca for financial service firms. A year ago Option One Mortgage Corp., also of Irvine, announced plans to open a large servicing operation in Jacksonville. Firms are attracted to Florida's low labor costs and relatively cheap housing.

First-quarter residential loan production will total between $860 billion and $890 billion, according to preliminary survey figures being collected by National Mortgage News.At the low end of the estimate range, the first quarter would be the second-best quarter ever for the industry. Most mortgage economists think production this year will range from $2.6 trillion to $3.2 trillion. On Friday the bond market rallied somewhat when the Commerce Department reported that the U.S. gross domestic product grew by an anemic 1.6% in the first quarter. The yield on the 10-year Treasury (which most mortgages are pegged to) fell to 3.87%. Even though the GDP was a bit better than the 1.4% growth rate posted in the fourth quarter, it fell short of what some economists were hoping for. Bond prices jumped after the report, a move that results in lower interest rates. (See the April 28 issue of NMN for more information about first-quarter residential loan production.)

Existing-home sales fell 5.6% in March to a more sustainable level as the best-ever three-month period for resales came to an end.The National Association of Realtors reported that sales of existing single family homes fell from a seasonally adjusted annual rate of 5.86 million in February to 5.53 million in March. NAR chief economist David Lereah noted that the 5.8 million sales pace million for the first quarter was a record, even with the downdraft of a weak economy, bad weather, and war with Iraq. "But it is clear, despite record lows in mortgage rates, the housing markets are cooling," he said. "We have dropped a notch." Nevertheless, the NAR economist is predicting that resales will end the year at 5.5 million and that 2003 will be the second-best year on record. The NAR report shows that the sale of existing homes fell in all four regions of the country. The inventory of unsold homes rose from 4.3 months in February to 5.0 months in March. And the median existing-home price rose 6.5% over the past 12 months.

Sales of new single-family homes rebounded in March to above the 1.0 million sales pace after dropping for two consecutive months.The U.S. Census Bureau reported that new-home sales rose from a seasonally adjusted annual rate of 943,000 in February to 1.012 million in March. The February sales number was revised upward from 857,000. Builders expected home sales to slow because of the war with Iraq, but they didn't, said National Association of Home Builders economist Michael Carliner. NAHB economists are forecasting that sales of newly constructed homes will come close to last year's record of 974,000, and possibly exceed it.

The first in a series of roundtable discussions on increasing minority homeownership in America, sponsored by the Mortgage Bankers Association of America, was held April 23 in Gary, Ind.Participants in the "Blueprint For the American Dream" discussion were local MBA members, federal, state, and local government officials, consumer groups, and industry experts. The goal of the discussion was "to identify the challenges and solutions" to minority homeownership, the MBA said. MBA members such as Bank One, Irwin Mortgage, M&T Mortgage, United Guaranty, and the Indiana Mortgage Bankers Association made concrete commitments to create homeownership opportunities in Gary over the next three to six months. The commitments include increasing renovation lending services, consumer homebuyer education, and reverse-mortgage opportunities in the city. Future MBA roundtables are slated for Fort Worth, Texas, San Diego; and Trenton, N.J. The MBA can be found online at http://www.mbaa.org.

The housing markets in Colorado, Oregon, and the Carolinas show the highest probability of improvement over the next two years among those of the 50 states, according to a mortgage risk index maintained by United Guaranty Corp., Greensboro, N.C.The top-ranked metropolitan statistical areas in the index, all with a ranking of 1, are: Boulder, Colo.; Erie, Pa.; Lynchburg, Va.; York, Pa.; and Raleigh, N.C. The report is based on UGC's quarterly ACUFactor mortgage risk index, which projects geographic market risk for the top 200 MSAs over the next four to eight quarters, the company said. The index uses a scale of 1 to 10, with 1 representing the least likelihood of further declines in model variables, which include home prices, the local economy, population stability, and mortgage delinquency trends. UGC can be found online at http://www.ugcorp.com.

Two classes of Banc of America Large Loan Inc.'s commercial mortgage pass-through certificates, series 2002-FLT1, and two classes in a related transaction have been downgraded by Standard & Poor's Rating Services.Class H in the BALL deal was downgraded from BBB-plus to BBB, and class J was downgraded from BBB to BB-plus, the rating agency said. In addition, the ratings on 11 other classes in the deal were affirmed. In the related transaction, Banc of America Structured Notes Inc.'s commercial mortgage pass-through certificates, series 2002-1, class A was downgraded from BBB-plus to BBB and class B was downgraded from BBB to BB-plus, S&P said. The downgrades were attributed to concerns about the largest of the seven loans in the BALL mortgage pool, the Starrett Lehigh building in New York, which represents 21.6% of the outstanding pool balance. The ratings on the BASN classes depend on the ratings of the underlying certificates, classes H and J of the BALL transaction.

Downgrades of North American commercial mortgage-backed securities rose in the first quarter and, contrary to recent experience, many stemmed from real estate performance and applied to investment-grade bonds, according to Standard & Poor's Ratings Services.Of the 49 CMBS downgraded in the first quarter, 25 involved investment-grade classes, S&P reported in the latest issue of its Structured Finance Global Ratings Roundup Quarterly. "As the real estate markets have weakened, the stress is being felt on larger, high-profile properties and assets, which is affecting the higher ratings," said Roy Chun, a managing director in S&P's Structured Finance Surveillance group. "Before mid-2002, it was rare to see investment-grade downgrades on CMBS transactions, primarily because of the strong real estate markets." The lodging sector continues to be "the primary cause" of CMBS downgrades, and nearly all the deals downgraded during the quarter resulted from weaker-performing lodging collateral, the report says. S&P can be found online at http://www.standardandpoors.com.

The Terrorism Risk Insurance Act has begun to have its intended effect, with rates dropping and policies offering broader coverage, according to Moody's Investors Service.Moreover, the market for terrorism coverage appears to be shifting away from stand-alone terrorism insurance policies, as evidenced by the purchase of terrorism coverage from property-and-casualty carriers by more high-profile borrowers, Moody's said in a report on the performance of the U.S. commercial mortgage-backed securities market in the first quarter. Even Manhattan office properties are seeing an improvement in the availability and affordability of terrorism insurance, the rating agency said. Insurance brokers have reported terrorism insurance quotes ranging from 10% to 30% of the cost of a property's overall property-and-casualty insurance. Rates quoted for higher-profile properties are seen to be generally in line with the recommendations of the Insurance Services Office, Moody's said. In the highest-risk zone comprising all or part of four cities -- Chicago, San Francisco, Washington, D.C., and New York -- the ISO has pegged the maximum increase over the regular property and casualty rate at 25%.