Originations

Ocean West Holding Corp., a mortgage banking company based in Tustin, Calif., has entered into a strategic agreement with Fidelity National Title Insurance Co. to streamline the closing process for its more than 100 offices nationwide.Mark Stewart, Ocean West's chief executive officer, said the arrangement would also enable the company to "gain greater control of the closings" and eventually pave the way for it to offer bundled services.

TransUnion Settlement Solutions Inc., Chicago, has announced the acquisition of Atlantic Assurance Group, a national mortgage information and vendor management company based in Charlotte, N.C.The terms of the deal were not disclosed. TransUnion said Atlantic Assurance is a privately held company -- with more than 300 employees serving all 50 states -- that offers services such as title reporting, title insurance, real property valuation, closing and settlement services, flood zone certifications, and land surveys. TransUnion said the acquisition "enhances TransUnion's residential lending process solutions, and reinforces the company's leadership position in the real estate settlement services industry." The company can be found on the Web at http://www.transunionssi.com.

The average 30-year fixed mortgage rate rose to 5.91% for the week ending March 28 from 5.79% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate rose from 5.11% to 5.21%, while the average rate for one-year Treasury-indexed adjustable-rate mortgages climbed from 3.75% to 3.84%. Fees and points averaged 0.6 points for all three mortgage categories. "Following the onset of the Iraq conflict, financial markets seem to have an upward bias for mortgage rates," said Frank Nothaft, Freddie Mac's chief economist. "Specifically, the market expects the conflict to end relatively soon, thereby allowing the business sector to shift its focus from the short term to the long term and begin activity that would spur economic growth." A year ago, the average 30-year and 15-year fixed rates were 7.18% and 6.60%, respectively, and the average one-year ARM rate was 5.11%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.

Alex J. Pollock, president and chief executive officer of the Federal Home Loan Bank of Chicago, has been named to the board of directors of Allied Capital, Washington.Allied Capital noted that Mr. Pollock is the architect of the Chicago FHLBank's Mortgage Partnership Finance Program. Although he and another newly appointed independent director, consultant Ann Torre Grant, will serve on the board effective immediately, they must stand for election in May at Allied Capital's annual stockholders' meeting. Allied Capital is a business development company, and it invests in non-investment-grade commercial mortgage-backed securities. It can be found online at http://www.alliedcapital.com.

Lend Lease Corp., the Australian parent of Lend Lease US Real Estate Investments, is looking into the possibility of a joint venture with Morgan Stanley for Lend Lease US REI's equity advisory business.Lend Lease US REI manages real estate investments -- private real estate and real estate securities -- for institutional investors. Some components of the U.S. business -- including Holliday Fenoglio Fowler, a commercial mortgage brokerage, and Housing & Community Investing -- are not involved in the discussions, Lend Lease Corp. said. A spokesman for Lend Lease US REI said Lend Lease REI does not expect the current negotiations to affect the debt side of the company's business, which includes commercial mortgage lending and servicing (through CapMark Services). This is a part of the "strategic review" of its U.S. business that Lend Lease began last year, using the services of Merrill Lynch. The Australian company says it has agreed to "nonbinding, commercial terms" with Morgan Stanley and expects that there will be negotiations and due diligence regarding the formation of a joint venture with Lend Lease US REI's equity advisory business.

Delinquencies in commercial mortgage-backed securities will rise in the next 12 months, but more as a result of declining real estate fundamentals than the war with Iraq, according to Fitch Ratings.However, "given the sound structural projections in CMBS transactions, investment-grade bonds can weather the current economic instability," said Susan Merrick, a managing director at Fitch. The rating agency expects the war to bring a decline in travel that will affect the hotel industry, causing a rise in hotel-backed CMBS delinquencies, especially if the war is long and the threat of terrorism continues. (Fitch said hotel delinquencies have already spiked in the first two months of the year.) The rating agency said it does not expect much increase in retail-backed mortgage loan delinquencies, despite predictions of lower sales, unless there are additional bankruptcies among major retailers. Another threat to the CMBS market is the possibility of terrorist attacks. "Another terrorist attack in the United States could rekindle the event risk which widened spreads on single-asset CMBS deals post Sept. 11," Fitch said. "With the increase in the number of fusion transactions, a larger portion of the CMBS market could be affected." Fitch can be found online at http://www.fitchratings.com.

The Market Composite Index, an overall measure of mortgage applications, fell to 1520.9 on a seasonally adjusted basis during the week ended March 21 from a record high of 1673.4 the week before, according to the Mortgage Bankers Association of America's Weekly Mortgage Applications Survey.On an unadjusted basis, applications were down 8.8% on the week but up 194.8% from the level recorded a year earlier. On a seasonally adjusted basis, the Purchase Index rose from 347.3 to 383.7, and the Refinance Index fell from a record high of 9387.0 to 8135.7. Refinancings represented 76.5% of total applications, down from the previous week's record high of 80.5%, while adjustable-rate mortgages accounted for 14.7%. The average contract interest rate for 30-year fixed-rate mortgages rose from 5.61% to 5.81%, and points (including the origination fee) increased from 1.48 to 1.55 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mbaa.org.

Sales of new single-family homes fell 8.1% in February for the second month in row as weather and concerns about the economy kept homebuyers away from new subdivisions.The U.S. Census Bureau reported that new-home sales fell from a seasonally adjusted annual rate of 929,000 units in January to 857,000 units in February. National Association of Home Builders economist Michael Carliner said the weather was a significant factor in the dropoff of sales. He also noted that builders have indicated in NAHB surveys that demand for new homes "softened up" in February. "It probably reflects some uneasiness about the economy," Mr. Carliner said. He expects a rebound once the snow melts and the international situation settles down.

Household International Inc., Prospect Heights, Ill., will be removed from the S&P 500 Index following the close of trading on March 28.Standard & Poor's said it is making the move as a result of the pending acquisition of Household by HSBC Holdings plc, the international banking giant. In a related move, Fair Isaac & Co., San Rafael, Calif., the company that created the formula behind credit scoring, is moving from the S&P SmallCap 600 to the S&P MidCap 400 Index, replacing Symantec Corp., the company that will replace Household in the S&P 500.

Christine Frye has been named chief privacy officer at Countrywide Financial Corp., Calabasas, Calif.The company said Ms. Frye will be responsible for guiding its consumer privacy policies and information practices. "The appointment of such a well respected privacy expert exemplifies Countrywide's commitment to consumer privacy and outstanding customer service," said Stanford L. Kurland, Countrywide's chief operating officer. The company said Ms. Frye is known industrywide as an expert in developing plans to enhance privacy protections. Ms. Frye was previously the chief privacy officer for Experian's eMarketing Services group and for 24/7 Media, and she is a frequent speaker on privacy and related management issues.

The ratings of Chateau Communities Inc., Greenwood Village, Colo., and its affiliate CP LP have been lowered by Moody's Investors Service.CP's senior unsecured notes were downgraded from Baa3 to Ba1, and Chateau's preferred stock shelf was downgraded from (P) Ba1 to (P)Ba2, the rating agency said. The rating outlook is uncertain. Moody's said the downgrades reflect the weak operating performance of the real estate investment trust, strained fundamentals in the manufactured housing industry, and uncertainty in addressing Chateau's debt maturities in 2004 and 2005. Moody's said Chateau's operating performance has been weak for several quarters, reflecting "a difficult tenant collection environment and market for financing manufactured housing units." In addition, its financing strategy for the acquisition of CWS Communities in late 2001 (a company also involved in MH communities) was not executed according to plan, thereby "crimping financial flexibility," Moody's said. Moody's can be found online at http://www.moodys.com.

Freddie Mac has announced that it will delay the release of its first-quarter earnings until previously announced financial restatements are completed so the results can be reported on a consistent basis with the restated periods.The government-sponsored enterprise said the restatement process is on track and is expected to be completed by the end of the second quarter. The restatements will include annual financial results for 2002, 2001, and 2000 and quarterly financial results for 2002 and 2001. Freddie Mac said it will publish other information about the corporation’s first-quarter performance in late April, including business volume and the results for credit and interest-rate risk management. The restatements and related re-audit stem from the GSE's re-evaluation, in conjunction with its new auditor, PricewaterhouseCoopers, of certain accounting policies previously used by Freddie Mac and concurred with by its prior auditor, Freddie Mac said. The GSE can be found online at http://www.freddiemac.com.

Existing-home sales fell 4.3% in February from a record high of 6.1 million in January, according to the National Association of Realtors.The drop in existing single-family home sales to a seasonally adjusted annual rate of 5.84 million was expected, according NAR chief economist David Lereah. The February sales pace still represented the fourth-best month ever. The housing market continues to benefit from low mortgage rates, Mr. Lereah said, adding that the 30-year mortgage rate averaged 5.84% in February -- a new monthly low. House prices rose 8.2% on an annual basis. The fragile economy combined with the war in Iraq "clouds the outlook," Mr. Lereah told reporters. But he said he still expects 2003 to be the second-best year for resales -- coming close to last year's record of 5.57 million existing homes sold.

Asian Americans for Equality has awarded Freddie Mac its Dream of Equality Award for the company's record in supporting affordable housing, community development, and philanthropy.In particular, the organization cited Freddie Mac's support for the Rebuild Chinatown Initiative, which was launched last July to help ensure Chinatown's long-term viability as an economic and cultural hub for New York in the aftermath of the Sept. 11 attack on the World Trade Center. Christopher Kui, the group's executive director and chief executive officer, said Freddie Mac's backing "has been invaluable" to the initiative. Freddie Mac can be found online at http://www.freddiemac.com.

Starwood Hotels & Resorts Worldwide Inc., White Plains, N.Y., has withdrawn its earnings guidance for the first quarter and the year, citing the effects of Iraq-related developments since January.The company said it is "well positioned for an economic recovery" but that it will suspend giving earnings guidance until it can "more accurately predict the business impact of the war and the impact and timing of an economic recovery." Starwood said that, when it offered earnings guidance in January, it "could not have anticipated the significant deterioration in business due to the elongated Iraq negotiations and the related geopolitical conditions that worsened over the quarter and culminated recently in armed conflict." The company can be found online at http://www.starwood.com.

Developers Diversified Realty Corp., Cleveland, has priced the sale of $160 million of preferred stock based on a liquidation value of $25 per depositary share.The class G cumulative redeemable shares will pay an annual dividend of 8% and be redeemable at par on or after March 28, 2008. The real estate investment trust said it will use the proceeds chiefly to buy a portion of DDRC DownREIT LLC's class J 9% and class K 8-7/8% preferred units, which were issued privately to an institutional investor, and to repay borrowings under the company's unsecured credit facility. Deutsche Banc Securities and Morgan Stanley were the joint book-running managers for the class G offering. DDR, which specializes in owning and managing shopping centers, can be found on the Web at http://www.ddrc.com.

A temporary restraining order has been issued against Post Properties, enjoining certain activities of the Atlanta-based multifamily real estate investment trust and its board of directors for 30 days.Post said the order was issued in response to a complaint filed by John A. Williams, chairman emeritus of the REIT's board, seeking an injunction and damages. Post's board was to have voted on resolutions that would have restricted Mr. Williams regarding certain company matters, including restrictions on access to employees and information, Post said. The board cannot vote on these matters during the 30-day period of the order. Post said it intends to defend itself in the matter and doesn't expect it to have any "material adverse effect" on its operations or financial position. About a month ago, Post replaced Mr. Williams as chairman of the company with Robert C. Goddard III, chairman and chief executive officer of a privately held commercial real estate investor. John Glover also relinquished his position as vice chairman of the board at that time. Post had reported that it expected to record a noncash charge for the first quarter relating to payments and benefits provided to Mr. Williams and Mr. Glover. Both remain members of the Post board. The REIT can be found online at http://www.postproperties.com.

Middleburg Financial Corp., the Middleburg, Va.-based holding company for Middleburg Bank, has reported signing a letter of intent to acquire a stake in Southern Trust Mortgage LLC, a regional mortgage banker based in Norfolk, Va.Under the proposed terms of the investment, Middleburg Bank would acquire 40% of Southern Trust in exchange for the contribution of the bank's mortgage division to Southern Trust and the transfer of $6 million in cash and $2 million in the bank's stock to the shareholders of Southern Trust. In addition, Jerry B. Flowers III, Southern Trust's president, and Kim S. Curtis, its chief operating officer, would enter into long-term employment agreements as well as nonsolicitation and noncompetition agreements, Middleburg said. "We are fully aware that the existing mortgage refinancing boom is likely nearing an end," said Joseph L. Boling, Middleburg's chairman, president, and chief executive officer. "However, we are attracted to Southern Trust because of its outstanding management team and its high percentage of purchase originations versus refinancings due to its strong established relationships with Realtors and builders." The bank can be found online at http://www.middleburgbank.com.

Newcastle Investment Corp., a New York-based real estate investment trust, has closed a $472 million nonrecourse debt offering issued by Newcastle CDO II Ltd. and Newcastle CDO II Corp.Newcastle said it has acquired approximately 85% of the collateral that will ultimately secure the collateralized debt obligation. The company said it expects the collateral value to total about $520 million upon completion, of which 64% will be commercial mortgage-backed securities, 23% will be senior unsecured debt of REITs, and 13% will be asset-backed securities. Newcastle said it has a $53 million equity interest in the transaction, which is part of its strategy of investing in credit-sensitive real estate securities and financing them with match-funded debt.

Limiting advances of principal and interest to 12 months for delinquent loans should remedy the growing problem of interest shortfalls in investment-grade commercial mortgage-backed securities, according to Fitch Ratings.Such interest shortfalls often result in downgrades to CMBS certificates or their placement on Rating Watch Negative, the rating agency said. Fitch advised that advancing be made contingent on recoverability and said a 12-month time limit "would not preclude servicers from making property protection advances" and funding necessary, limited expenses. The rating agency explained that when a servicer determines an advance to be nonrecoverable based on inadequate property value, the servicer is entitled to reimbursement. "A time limit on servicer advances would reduce the likelihood that recovery of servicer advances results in interest shortfalls up to investment-grade," Fitch said. The rating agency can be found online at http://www.fitchratings.com.