Originations

The Refinance Index climbed to another record high during the week ended March 14, as did the index measuring the overall mortgage application market, according to the Mortgage Bankers Association of America's Weekly Mortgage Applications Survey.The seasonally adjusted refi index rose from a record 8920.9 the week before to 9387.0, while the seasonally adjusted Market Composite Index climbed from a record 1603.1 to 1673.4, the MBA said. On an unadjusted basis, applications were up 4.4% overall on the week and 254.8% from the level recorded a year earlier. Refinancings represented 80.5% of total applications, up from the previous week's record high of 79.8%, while adjustable-rate mortgages accounted for 12.8%. The average contract interest rate for 30-year fixed-rate mortgages rose from a record low of 5.42% to 5.61%, and points (including the origination fee) decreased from 1.55 to 1.48 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mbaa.org.

United Dominion Realty Trust Inc., Richmond, Va., has closed on a new $500 million unsecured revolving credit facility.The three-year facility replaces the company's $375 million unsecured revolver and a $100 million unsecured term loan, United Dominion said. The company said it has the option of increasing the facility to $650 million if additional lender commitments are obtained, and the facility can be extended for one year. The facility bears an interest rate of 90 basis points above the London interbank offered rate, a reduction of 20-30 bps from its previous pricing on the revolver and term loan, the company said. The facility was arranged by Wachovia Securities Inc. and J.P. Morgan Securities Inc. United Dominion, a multifamily real estate investment trust, can be found online at http://www.udrt.com.

GMAC Commercial Mortgage, the nation's largest commercial lender, has announced a $650 million financing for the acquisition of 253 golf courses in the United States, the United Kingdom, and Japan.The company, a subsidiary of Horsham, Pa.-based GMAC Commercial Holding Corp., provided the financing to an investor group made up of GS Capital Partners 2000, Goldman Sachs Whitehall Street Real Estate Fund 2001, and Starwood Capital Group for the acquisition of National Golf Properties and American Golf Corp. The transaction, arranged through GMACCM's Commercial Capital Initiatives conduit, involves 228 golf courses in 29 U.S. states, 24 golf courses in the United Kingdom, and one in Japan, GMACCM said. "There is growing demand in this product line, and we see a great future in financing golf courses," said Robert M. Keating, the GMACCM senior vice president who arranged the deal.

Richard S. Dennen has been hired as director of corporate development at Oak Street Mortgage LLC, Carmel, Ind.Mr. Dennen, a certified public accountant, was most recently chief financial officer of TWG Capital Inc. D. Scott Clarke, executive director of Oak Street Mortgage, said Mr. Dennen will focus on expanding the company's core mortgage business in current markets, as well as geographically, and will look "aggressively" at diversification options such as acquisitions, investments, and product expansion. Oak Street Mortgage LLC can be found online at http://www.oakstreetmortgage.com.

Aegis Realty Inc., New York, has announced that its planned merger with Phillips Edison Ltd. will become effective during the week of March 24 if it is approved at a special meeting of stockholders scheduled for March 21.Aegis stockholders will receive an expected cash merger consideration of $11.52 per share, plus an additional amount linked to the company's first-quarter dividend, the real estate investment trust said. Trading of the stock will continue through the close of business on the effective date of the merger. Phillips Edison is a privately held owner of grocery-anchored community shopping centers.

Peter T. Paul, the founder and former chief executive officer of Headlands Mortgage, has announced that he will launch Paul Financial this summer in San Rafael, Calif., as a niche wholesale lender.Mr. Paul said the aim of the company will be to "find a slot for ourselves" that is not being served by larger companies. The company will have the advantage of being "a start-up in the age of technology," he said. "Our loan processing will be entirely automated, but we will continue to offer what many major companies can no longer give: personalized service in which customers will be able to speak to a live person for their questions or concerns." Mr. Paul is chairman of Sequoia National Bank and a member of the board of the Federal Agricultural Mortgage Corp., commonly known as Farmer Mac.

Single-family housing starts plunged 13.7% in February, and the red-hot housing market may be settling down to a lower level of activity.The U.S. Census Bureau reported that single-family starts fell from a seasonally adjusted annual rate of 1.501 million in January to 1.295 million in February. Single-family permits fell by 6.8%. The drop in starts follows a report several weeks ago that new home sales fell 15.1% in January. Economists with the National Association of Home Builders knew the December and January housing start numbers were not sustainable. "Some correction was due, but this is larger than we anticipated," NAHB economist Michael Carliner said. Weather and concerns about war with Iraq may have contributed to the sharp decline in starts. But the NAHB economist said it is unclear whether it is a sign of a larger problem with the economy. "I won’t dismiss this as just a fluke or special factors that are all going to disappear next month," he said.

James Moore has been named president and chief operating officer of Bedford Property Investors Inc., Lafayette, Calif.The real estate investment trust also announced that Dennis Klimmek has been named executive vice president of the company. Peter Bedford will remain as chairman and chief executive officer. The REIT's website address is http://www.bedfordproperty.com.

Bank One of Detroit and Fannie Mae have joined in a $12.5 billion community lending alliance -- of which about 25% is earmarked for minorities -- to serve underserved borrowers from the extended Michigan area.Bank One loans on both single-family and multifamily properties will also serve disabled individuals, low-income families receiving Section 8 government rent subsidies, woman-headed households, immigrants, and community development projects. Bank One said it is targeting steadily employed customers who lack downpayment funds. It offers them affordable and customizable mortgage products that require little or no downpayment, accept flexible credit history qualifications, and do not require mortgage insurance. Eligible customers may receive downpayment grants of up to $2,000.

Last year, Fannie Mae purchased over $60 billion in subprime loans under its expanded access program, which also includes Timely Payment Rewards mortgages."That represents more than a 50% increase over 2001," Fannie Mae counsel Carol Evans told a National Community Reinvestment Coalition conference. Ms. Evans, who is responsible for ensuring compliance with Fannie's anti-predatory-lending policies, told the group that Fannie Mae conducts due diligence on all the lenders it purchases subprime loans from, and even samples loans to make sure they are complying with Fannie's guidelines. "Our goal is nothing less than transforming this market to a place where credit-blemished borrowers have access to credit at fair terms and at a fair price," Ms. Evans said. Fannie Mae can be found online at http://www.fanniemae.com.

Fitch Ratings has announced that it will resume rating residential mortgage-backed securitizations that include mortgage loans originated after the recent amendments to the Georgia Fair Lending Act.The rating agency said it believes it can quantify the risk associated with GFLA's remaining assignee liability, but cited concerns about certain provisions relating to "high cost home loans." Fitch said it will now rate RMBS pools that include high-cost home loans (as defined in GFLA) originated in Georgia, "subject to the application of additional credit enhancement due to potentially high loss severity." Under the amended statute, an assignee holding a high-cost home loan may be subject to no liability if it can prove that it exercised "reasonable due diligence" to prevent the purchase of such a loan. The maximum liability -- the outstanding indebtedness on the loan, plus reasonable attorneys' fees -- can be incurred if the assignee is unable to prove such due diligence. Fitch said it is concerned about the absence of guidance on what actions will be deemed "reasonable due diligence," and the possibility that a loan not initially considered high-cost could ultimately be viewed as such. Standard & Poor's and Moody's recently announced that they would resume rating RMBS containing Georgia mortgage loans. Fitch can be found online at http://www.fitchratings.com.

The Bankruptcy Court in Chicago has approved the sale of Conseco Finance Inc., St. Paul, Minn., to CFN Investment Holdings LLC, New York, for $1.1 billion.Judge Carol Doyle approved the transaction after CFN sweetened its bid by $85 million, and CFN worked out an agreement with Fannie Mae over the $23 billion manufactured housing servicing portfolio. According to published reports, Fannie Mae agreed to a deal that allows CFN to have an increased servicing fee of 125 basis points for the first 12 months after the deal closes. After that, the fee drops to 115 bps. "From the outset we have sought an effective long-term servicer of these assets, and that has been achieved," said Chuck Greener, Fannie Mae’s senior vice president for communications. Fannie's review of the new servicing protocol "gives us confidence that the manufactured housing securities will be serviced in an efficient and effective manner," he said. CFN consists of J.C. Flowers & Co. LLC, Birmingham, Ala.; and Fortress Investment Group LLC and Cerberus Capital Management, both of New York.

Citing recent revisions to the Georgia Fair Lending Act, Moody's Investors Service has announced that it will rate residential mortgage-backed securities that include Georgia loans.Moody's said most Georgia mortgage loans can now be included in RMBS without increasing risk to investors. Under the revised GFLA, lenders and securitizers will be able to adopt practices "to insulate securitization trusts from liability," and therefore they can include such loans in securitizations "with no adverse rating consequence," the rating agency said. Standard and Poor's made a similar announcement on March 11. Moody's can be found on the Web at http://www.moodys.com.

Health Care REIT, Toledo, Ohio, has priced the sale of $100 million of senior unsecured notes due Sept. 12, 2012, at an effective yield of 7.40%.The notes are an add-on to $150 million of senior unsecured notes issued in September 2002, the real estate investment trust said. The net proceeds will be used to repay a portion of the company's borrowings under its revolving lines of credit and to invest in additional health care properties. The joint lead managers for the offering were Deutsche Bank Securities Inc. and UBS Warburg LLC. The REIT can be found online at http://www.hcreit.com.

Related Capital Co. of New York has announced that, together with San Francisco-based Bridge Housing Corp., it is providing $48 million in equity financing for the development of a $102 million mixed-use affordable housing complex in San Francisco.Bank of America is the main investor in the transaction, with a $34.5 million contribution. Besides Bridge, the area's largest affordable housing nonprofit, other partners include the Department of Housing and Urban Development (whose Hope IV program-related grant "served as the initial catalyst"), the San Francisco Housing Authority, and the city of San Francisco. The North Beach Place, which is believed to be the largest urban revitalization complex of its kind, is a 341-housing-unit development at a prime location next to the Fisherman's Wharf tourist area and the San Francisco financial district. It will double the number of affordable housing units at this site, at "about half the price of area market rate units."

Trump Hotels & Casino Resorts, New York, is offering $485 million in mortgage notes for private placement through its subsidiaries Trump Casino Holdings and Trump Casino Funding.The offering will be made in two series: one of $420 million, due March 2010, to be offered at a discount to face value; and another of $65 million due at a later date. THCR said the proceeds will be used to pay off its debt and that of its associated companies. Donald J. Trump, the real estate magnate who is chairman and president of THCR, may acquire up to $15 million of the second offering, the company said. The interest rate and other terms on the notes are yet to be determined. However, THCR anticipates that "the second mortgage notes will pay interest in cash at the same rate as the first mortgage notes and additional interest in kind at a total rate to be determined." The offering is expected to be "guaranteed on a secured basis" by some subsidiaries of the issuer.

Standard & Poor's will accept Fair, Isaac and Co.'s Next Generation FICO credit risk score in its forthcoming mortgage analytics model, Fair Isaac has announced.As of April 1, S&P will use the NextGen FICO scores in version 5.6 of its LEVELS model to assess risk and predict losses associated with mortgage-backed securities, the San Rafael, Calif.-based Fair Isaac said. NextGen scores "offer lenders a more advanced alternative to Fair, Isaac's classic FICO credit bureau scores, the industry-standard decision solution used to make billions of credit decisions each year," the company said. The new scores offer an expanded score range, multidimensional characteristic analysis, and additional scorecards. The companies can be found online at http://www.fairisaac.com and http://www.standardandpoors.com.

Two classes of LB Commercial Conduit Mortgage Trust II's commercial pass-through certificates, series 1996-C2, have been downgraded by Fitch Ratings.Class G was downgraded from B to B-minus, and class H was downgraded from B-minus to CC. The ratings on the remaining Fitch-rated classes were affirmed. "The downgrades are primarily due to the revaluation of the eight loans (10.5%) collateralized by hotels formerly owned and operated by Lodgian Inc.," Fitch said. Lodgian emerged from Chapter 11 bankruptcy protection in November. Eight of the original nine loans in the deal are now real estate owned, and the special servicer, Criimi Mae Services LP, plans to list the properties for sale shortly, the rating agency said. Fitch can be found online at http://www.fitchratings.com.

A disconnect between the price of commercial real estate and its revenue stream is on the verge of becoming a problem for commercial mortgage-backed securities, according to Moody's Investors Service.Capitalization rates are comparable to price-to-earnings ratios in the stock market, Moody's said. "The cap rate drives the loan-to-value ratio, one of the two key loan-level credit tests," said Tad Philipp, Moody's managing director for CMBS and co-author of the Moody's report. Low capitalization rates have been pushing up property values, despite weak fundamentals affecting rents and the leasing of commercial property. If cap rates or interest rates on commercial mortgages were to rise, it would increase the risk that borrowers will have difficulty refinancing commercial mortgage loans at the end of their term, Moody's said. Moody's can be found on the Web at http://www.moodys.com.

A ballot measure that would require financial institutions to obtain explicit consent before sharing a consumer's personal information with affiliates or third parties has been proposed in California by a coalition that includes an online mortgage lender.If passed, the initiative would give Californians the strongest financial privacy protection in the nation, according to Californians for Privacy Now, a coalition that includes E-Loan Inc., Dublin, Calif., as well as AARP, Consumers Union, and several other groups. Under the proposal, financial institutions could sell or share personal information without consent only to complete a transaction initiated by the consumer. "The market has failed consumers in the privacy arena, and the only way to solve the problem is to give consumers the right to control the selling and sharing of their personal information," said Chris Larsen, chairman and chief executive officer of E-Loan. ".... By allaying consumer fears about privacy, confidence and trust will emerge -- encouraging consumers to take advantage of new services and technologies that they're too afraid to use now." Senior citizens with significant home equity and income only from Social Security can be targeted for predatory home loans under the existing system, the coalition said. The group can be found online at http://www.californiaprivacy.org.