Originations

Oak Street Mortgage LLC, Carmel, Ind., has announced that it plans to invest in companies in the nonmortgage areas of the financial services sector in order to diversify and create a long-term, sustainable business.The company said it has established criteria such as industries of interest, ideal company size for investment, desired structure and level of investment, and management style. "We are aggressively looking at a variety of diversification options, including acquiring or starting an insurance agency, collection company, commercial finance company, and a bank," said Richard Dennen, director of business development at Oak Street. The company can be found online at http://www.oakstreetmortgage.com.

Commercial Capital Bancorp Inc., Irvine, Calif., has reported a realignment of its lending operations under which the origination, underwriting, and processing functions have been shifted from its commercial mortgage banking subsidiary to its banking subsidiary.The realignment will make Commercial Capital Bank the originator of most of the company's loans, the company said. Before the realignment, Financial Institutional Partners Mortgage Corp. originated all the company's multifamily and commercial real estate loans. Because of transaction rules governing purchases of loans from nonbank affiliates, the bank was permitted to buy less than 50% of FIPMC's originations, the parent company said. "Our business strategy has generated growth in recurring interest income as the bank grew its loan portfolio by purchasing loans from FIPMC, as well as near-term earnings from noninterest income generated on loans originated and sold by FIPMC to third parties," said Stephen H. Gordon, chairman and chief executive officer of Commercial Capital Bancorp. "But every time FIPMC sells a loan, the buyer gets the valuable, ongoing interest income from that point forward." FIPMC will continue to use its warehouse line of credit to fund and sell loans the bank assigns to it.

The U.S. job engine continues to stall -- but not in the mortgage industry. According to figures released April 4 by the Bureau of Labor Statistics, the mortgage banking and brokerage sectors added 3,300 full-time positions during March.Mortgage employment now stands at an all-time high of 425,000. A year ago the industry employed 356,000. Year-to-year mortgage employment is up a stunning 19%. Of course, industry veterans are well aware that when production begins to fall, layoffs are all but certain. But for now, refis and purchase-money loans are keeping funders busy from coast to coast. And if the Federal Reserve cuts rates further, production could easily stay strong through the end of December. Overall, the U.S. unemployment rate stayed steady at 5.8% in March.

Weingarten Realty Investors, a Houston-based real estate investment trust, has priced $75 million of depositary shares, each representing one-thirtieth of a series D cumulative redeemable preferred share.The depositary shares will be redeemable at par, at Weingarten's election, on or after April 30, 2008, and will have a liquidation value of $25 per share, the company said. They will pay a 6.75% annual dividend. The book-running manager for the offering was Wachovia Securities. The REIT can be found online at http://www.weingarten.com.

Paul F. Fischer has been promoted to executive vice president for risk management at Radian Guaranty Inc., the mortgage insurance subsidiary of Radian Group Inc., Philadelphia.Mr. Fischer will develop strategy for the company’s risk management, credit policy, quality control, and loss mitigation functions. He has played "a key role" in developing new products and approaches to risk management for Radian Group, which he joined in 1979 as controller, the company said. Radian Guaranty can be found online at http://www.radianmi.com.

Terry J. Jorde, president and chief executive officer of CountryBank USA, Cando, N.D., has been named to Fannie Mae's National Advisory Council.Ms. Jorde began her career at 21 as a teller and bookkeeper at CountryBank, and at 32 was elected president and CEO, Fannie Mae said. "As a rural lender, Ms. Jorde adds an important perspective, and will bring a wealth of experience and wisdom to the council," said Shalley Jones, vice president of housing and community development for Fannie Mae's Midwestern regional office. The National Advisory Council has 46 members from the housing and mortgage finance industry and government. It meets three times a year with Fannie Mae's senior management to discuss "the challenges and opportunities" facing the government-sponsored enterprise and the housing finance system, the GSE said. Fannie Mae can be found online at http://www.fanniemae.com.

Classes K-QA and L-QA of COMM 2000-FL3’s commercial mortgage pass-through certificates have been placed on Rating Watch Negative by Fitch Ratings.Fitch said the rating action stemmed from MCI Worldcom's rejection of its lease for 30% of the net rentable area in the Queens Atrium building in New York, which represents 12% of the trust mortgage asset. The rating agency said it is reviewing the leasing prospects for the space, which it said is being actively marketed by the borrower. Fitch can be found online at http://www.fitchratings.com.

Classes C, D, and E of Bear Stearns Commercial Mortgage Securities Inc. commercial mortgage pass-through securities, series 2000-LCON, have been placed on review for possible downgrade by Moody's Investors Service.The reason for the review status is that preliminary operating results for 2002 show "a significant decline" in cash flow since the rating agency's last review, Moody's said. The certificates are supported by a first-mortgage lien on fee and leasehold interests in the 751-room El Conquistador Resort & Country Club in Las Croabas, Fajardo, Puerto Rico.

Three classes of DLJ Commercial Mortgage Corp. commercial mortgage pass-through certificates, series 1998-STF2, have been downgraded by Moody's Investors Service, and four classes have been placed on review for possible downgrade.The downgrades were as follows: class B-4, from Caa1 to Caa2; class B-5, from Caa2 to C; and class B-6, from Caa3 to C. Classes A-3, B-1, B-2, and B-3 were placed on review. Moody's attributed the downgrades to a continuing decline in the performance of the pool and a $5.4 million loss stemming from the liquidation of the Camelot Retirement & Care Center Loan ($4.5 million) in January 2003. All six loans remaining in the pool are in special servicing. Moody's can be found online at http://www.moodys.com.

Sam Zell, chairman of Equity Office Properties Trust and Equity Residential Properties Trust, has characterized reports the Bush administration's dividend tax cut proposal would hurt real estate investment trusts as nothing more than "a red herring."Delivering the keynote address at the New York University Real Estate Institute's eighth annual REIT symposium, Mr. Zell noted that the S&P 500 has a dividend yield of 1.7%, compared with the REIT world's 7.3%. To match the REIT sector's dividend yield, an S&P 500 company would have to increase its dividend and also increase the tax it paid through the extra income it would have to generate to do so. "General Electric would have to up its tax to 35% to deliver," Mr. Zell said. Mr. Zell said he doesn't expect the current low interest rate environment to continue for very long. "Anyone who plans based on that is likely to have a comeuppance," he said. The REIT industry pioneer sees a lot more consolidation in the sector, with the present REIT industry ranks of about 215 REITs being winnowed down to about 30 REITs. He compared this process to the evolution in the car manufacturing sector, which has gone from 200 companies in 1920 to the current "two-and-a-half."

AMCO, a Cleveland-based appraisal management company, has formed an alliance with the American Guild of Appraisers to advance the interests of independent appraisers "while promoting safety and soundness in collateral valuations for mortgage lending."AMCO said the alliance hopes to improve the political representation of appraisers at all levels of government, provide professional training and education, and promote a national appraiser certification program. AMCO will promote Guild membership and activities among its network of 11,000 independent appraisers nationwide. The AGA is a professional association affiliated with the AFL-CIO and the Office and Professional Employees International Union. "We intend to bring stronger advocacy to appraisers' concerns that are currently inadequately represented," said William Sentner, national president of the AGA. "By working with AMCO, we hope to reach out to those whose work is the foundation for sound residential lending."

United Guaranty Corp., Greensboro, N.C., has reported a corporate reorganization under which four new operating groups have been established to increase the company's flexibility in adding businesses and diversifying its products and services.The operating groups are: the Domestic Residential Group, headed by Chris Avren, executive vice president and group executive; the Domestic Consumer Group, headed by Alan Atkins, president and group executive; the International Group, headed by Doug Rivenburgh, senior VP and group executive; and the Domestic Services Group, headed by Randy Leathers, SVP and group executive. "This realignment streamlines communication and synergy among the United Guaranty business units and subsidiaries that serve the same customers," said Billy Nutt, UGC president and chief executive officer. "By combining business units according to their functional activity, we've flattened the organization while at the same time ensuring added efficiency." The mortgage insurance company can be found online at http://www.ugcorp.com.

Volt Inc., a power provider and marketer of financial services based in Oakhurst, Calif., has announced an agreement to acquire Heritage Mortgage for cash and restricted securities.The terms of the deal were not disclosed. Volt said the acquisition reflects the fact that the company is "aggressively expanding the mortgage side of its business." In May 2002, Volt acquired First Washington Financial Corp., a mortgage company based in Bethesda, Md. Volt can be found on the Internet at http://www.voltinc.com.

SLM Corp., Reston, Va., commonly known as Sallie Mae, has announced the acquisition of Pioneer Mortgage, Novi, Mich., for an undisclosed price.Sallie Mae, which provides federally guaranteed student loans, said Pioneer will operate as a wholly owned subsidiary and will expand the fee-based mortgage banking services provided by its SLM Financial Corp. subsidiary. SLM Financial was created in 1999 to provide career training loans to students in technical or specialized training programs and to originate mortgage and consumer loans for home purchases and other major expenditures, Sallie Mae said. Last December, Sallie Mae announced the purchase of First Trust Financial, a mortgage banking company with operations in Massachusetts, Rhode Island, and New Hampshire. Pioneer, founded in 1992, provides mortgage banking services in Michigan and Arizona. Sallie Mae can be found on the Web at http://www.salliemae.com.

The average 30-year fixed mortgage rate fell to 5.79% for the week ending April 4 from 5.91% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate fell from 5.21% to 5.06%, while the average rate for one-year Treasury-indexed adjustable-rate mortgages dipped from 3.84% to 3.82%. Fees and points averaged 0.6 points for all three mortgage categories. "Current economic indicators reflect a lackluster economy, and I think it's safe to say that financial markets will continue to experience volatility, at least until there is some resolution to the current situation in Iran," said Frank Nothaft, Freddie Mac's chief economist. "Although mortgage applications fell last week, according to the Mortgage Bankers Association, most of that decline was in applications for refinance. Mortgage rates overall continue to be amazingly affordable, and that keeps the housing industry humming." A year ago, the average 30-year and 15-year fixed rates were 7.13% and 6.64%, respectively, and the average one-year ARM rate was 4.99%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

Pan Pacific Retail Properties Inc., San Diego, has renewed a $300 million unsecured revolving credit facility and reduced the interest rate on the line of credit.The rate on the three-year facility is 70 basis points above the London interbank offered rate, compared with LIBOR plus 100 bps under the old facility, PPRP said. The administrative agent for the new facility is Bank of America NA. PPRP, an equity real estate investment trust, can be found on the Internet at http://www.pprp.com.

Richard L. Burr has been hired as chief operating officer at Ocean West Holding Corp., Tustin, Calif.Mr. Burr has held senior executive positions with mortgage companies such as American Home Loans, Citicorp Mortgage Inc., Imperial Credit Industries, and Metmor Financial Inc., Ocean West said. Mark Stewart, chief executive officer of Ocean West, said Mr. Burr was the top net branch executive for American Home Loans.

Equity real estate investment trusts easily outperformed the S&P 500 in the first quarter, according to SNL Financial, a Charlottesville, Va.-based research firm.Equity REITs recorded total returns of 1.2%, compared with a 3.2% decline for the S&P 500, the company reported. SNL said the REIT performance can be attributed chiefly to a strong showing by retail REITs, which boasted an average total return of 7.7%. "Continued strong consumer confidence has kept these REITs' tenants relatively healthy into the first quarter," SNL said. Among other REIT sectors, industrial REITs averaged a 2.3% total return and office REITs returned 1.7%, while total returns for apartment REITs declined 1.1% and hotel REIT returns dropped 18.3%, SNL said. The company can be found online at http://www.snl.com.

U.S. Bancorp Piper Jaffray has initiated coverage of nine office and industrial real estate investment trusts and published the first edition of The REIT Desk Reference.The report contains in-depth analysis of all nine REITs, including a proprietary forecast of credit trends, the company said. "The foundation of the desk reference is the proprietary financial models, which forecast each REIT's financial statements for the next two years and include three years of historical data," U.S. Bancorp Piper Jaffray said. "Each model contains estimates for key assumptions, such as real estate market conditions, capital raising/buyback activity, and portfolio changes." The covered REITs are: AMB Property Corp., Boston Properties, CarrAmerica Realty Corp., Duke Realty Corp., Equity Office Properties Trust, First Industrial Realty, Highwood Properties, Liberty Property Trust, and ProLogis Trust. The company's website address is http://www.piperjaffray.com.

The stocks of Apartment Investment and Management Co., Denver, and AMB Property Corp., San Francisco, have received "strong sell" ratings from Zacks.com.The Zacks Rank #5 (Strong Sell) ratings are assigned to a list of Stock to Sell Now by Chicago-based Zacks & Co. In explaining the ratings, Zacks said AIMCO was hurt by the weak economy in the fourth quarter, along with the whole multifamily real estate sector, while AMB "continues to grapple with a challenging industrial market." Zacks can be found online at http://www.zacks.com.