Originations

First Horizon Home Loans, Irving, Texas, has announced a program offering homebuilders in Baltimore and Washington, and eventually nationwide, features such as combined construction and mortgage financing and various forward commitment options.The Builder Sales Initiative will also provide "Spec Mover" 30-day rate options to help builders sell finished homes quickly, as well as various rate-lock options, the company said. Dan Schmidt, First Horizon's national builder sales director, will head up the initiative. "Builders have unique financing needs -- that's why they prefer to work with a lender that understands these needs," said Jeffrey Brown, executive vice president of First Horizon's Eastern Division. The company is a subsidiary of First Tennessee National Corp., which can be found online at http://www.firsttennessee.com.

The Georgia State Senate has approved legislation that amends or repeals certain parts of the Georgia Fair Lending Act, including the assignee liability provisions.The bill conforms to one passed by the state's House of Representatives that was less restrictive than the Senate's original reform efforts. Reaction from one mortgage industry opponent of GFLA was positive. Vincent Terry, president of the National Minority Mortgage Bankers Association, said the new law answers all of his group's concerns about the previous version and has prompted the group to drop its lawsuit against the state. According to the Washington law firm of Lotstein Buckman, the key provisions of the amended bill include a repeal of the category of "covered loans." The bill does not alter the "high-cost home loan" category. For the secondary market, it repeals assignee liability for violations, so long as assignees have policies prohibiting the purchase of high-cost home loans. It requires the seller to represent and warrant that the loans being purchased are not high-cost home loans, and that the seller has otherwise exercised due diligence to prevent the purchase of high-cost home loans.

Washington Mutual, Seattle, is being mentioned as a leading candidate to buy the commercial mortgage operations of GMAC Commercial Mortgage Corp., sources have told MortgageWire. A spokesman for WaMu -- the No. 1 residential servicer in the United States -- declined to comment. "We have a policy of not discussing rumors," the spokesman said. Investment bankers say European banks as well as large U.S. banks will take a look at the offering book prepared by Morgan Stanley. One mortgage executive said WaMu is interested in GMACCM in part because of its presence in the multifamily sector. "It makes sense for WaMu, but there are several bidders," said the executive, who requested anonymity. (See the March 10 issue of National Mortgage News for more details.)

In February the U.S. economy suffered its worst employment drop since the aftermath of the Sept. 11 terrorist attacks -- but the mortgage industry continued to add jobs like there's no tomorrow.Mortgage employment totaled 421,000 full-time positions in February, a 1.8% gain from January's total and a stunning 17.5% increase from that of a year earlier, according to the Labor Department. Countrywide Home Loans chief Angelo Mozilo told MortgageWire March 5 that loan volumes continue to be strong at his shop. "We're gaining market share," he said. First Collateral's Lynn Merkle said his firm recently had its best day ever, funding 2,000 loans. "February is usually the low point in the cycle, but not this year," Mr. Merkle said. (First Collateral is a warehouse funder that finances mortgage bankers.) Application volumes slowed briefly in early February, lenders reported, but picked up again in recent weeks as mortgage rates fell to new lows.

H&R Block Inc., Kansas City, Mo., has received a "#1 Strong Buy" rating from Zacks.com largely on the strength of the company's mortgage operations.Thanks to the strong performance of Option One Mortgage Corp. and H&R Block Mortgage Co., fiscal third-quarter earnings at the company beat Wall Street estimates. Block -- whose main business, filling out tax returns, is just hitting stride -- now expects full-year earnings of between $3.10 and $3.25 per share. "It looks like investing in a piece of Block may give investors a good refund," Zacks said.

Realty Income Corp., Escondido, Calif., has priced $100 million of 5-3/8% senior unsecured notes at 99.509.The pricing on the 10-year notes will produce an effective yield of 5.439%, the company said. The net proceeds will be used to repay borrowings under the company's $250 million unsecured acquisition credit facility. The co-lead managers of the offering are Banc of America Securities LLC (the sole book-running manager) and Salomon Smith Barney Inc. Realty Income can be found on the Web at http://www.realtyincome.com.

Criimi Mae Inc., Rockville, Md., has announced that it expects to raise the estimated losses over the life of its commercial mortgage-backed securities portfolio from $448 million to approximately $500 million and, as a result, to report an impairment charge for the fourth quarter.The company said its projected cash flows are still "well in excess" of the amount needed to cover its preferred dividends and provide funds for other aspects of its business. "This higher estimate of losses is warranted by difficult conditions in the commercial real estate market, particularly the hotel sector, and the estimate is in the range of expectations held by Brascan Real Estate Finance when Criimi Mae was recapitalized in January," said Barry S. Blattman, president and chief executive officer of Criimi Mae. The company also reported that its board of directors has declared the payment on March 31 of dividends on series B, F, and G preferred stock that were deferred from the second quarter of last year. It also announced the appointment of Craig M. Lieberman to the newly created post of senior vice president and chief portfolio risk officer. Criimi Mae can be found online at http://www.criimimaeinc.com.

Giuliani Partners LLC, New York, and CB Richard Ellis, Los Angeles, have announced the formation of a strategic alliance that will marry the crisis management and the real estate expertise of the two companies.Giuliani Partners, a consulting firm operated by former New York City Mayor Rudolph W. Giuliani, will advise CBRE clients on issues related to emergency preparedness, business continuity, security, fire safety, transportation, location, and site assessment, the companies said. CBRE will advise clients of Giuliani Partners on global real estate markets, financing, appraisal services, and property, facilities, and project management. "Businesses now want to do a comprehensive assessment of their needs, ranging from economic viability, to quality of life and to safety and security, before they move to a different location," Mr. Giuliani said. CBRE can be found on the Web at http://www.cbre.com.

After a marathon bidding session, the winning bidder for the majority of Conseco Finance Corp.'s assets was CFN Investment Holdings LLC.CFN has agreed to pay at least $700 million for the subprime and manufactured housing lender (formerly known as Green Tree Financial) based in St. Paul, Minn., a Conseco Finance spokeswoman confirmed. GE Consumer Finance has agreed to acquire Mill Creek Bank, a part of Conseco Finance, for $310 million. If GE Consumer Finance does not acquire Mill Creek, CFN will do so for an additional $270 million. The deal is subject to the approval of the Bankruptcy Court, the spokeswoman said. CFN was originally going to acquire Conseco Finance for the outstanding amount of its secured debt. The winning bid exceeds Conseco's debt obligations by approximately $260 million, according to published reports. CFN consists of J.C. Flowers I LP, Montgomery, Ala.; and Fortress Investment Group LLC and Cerberus Capital Management LP, both of New York.

The average 30-year fixed mortgage rate dropped to another survey-record low of 5.67% for the week ending March 7 from 5.79% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate fell from a survey-record low of 5.14% to 5.01%, while the average rate for one-year Treasury-indexed adjustable-rate mortgages dropped from 3.83% to a survey-record low of 3.76%. Fees and points averaged 0.6 points for all three mortgage categories. "The political and economic uncertainty of war in Iraq is wearing on the confidence of consumers and restraining business expansion," said Frank Nothaft, Freddie Mac's chief economist. "That, in turn, translates into a weaker economy, which places downward pressure on interest and mortgage rates." A year ago, the average 30-year and 15-year fixed rates were 6.87% and 6.37%, respectively, and the average one-year ARM rate was 5.07%, Freddie Mac said.

General Motors is considering a sale of GMAC Commercial Mortgage Corp., the No. 1 commercial mortgage lender and servicer in terms of lending and servicing volume.Jerry Dubrowski, a spokesman for General Motors, confirmed to MortgageWire that GMAC might sell "all or substantially all of its interests in the commercial mortgage business." No sale price has been set, and GMAC said it is not ready to comment on who the potential bidders might be. But the company has hired Morgan Stanley to advise it regarding the process. Mr. Dubrowski said GMAC is considering a sale because the "tremendous growth" in the commercial mortgage business in recent years has caused GMACCM to "increase its need for equity capital and funding support from GMAC." GMAC would plow back the proceeds of a sale to its other business lines, including its residential mortgage business. As of year-end 2002, GMACCM had lending volume of $6.82 billion and held $160.9 billion in mortgage servicing rights, according to the Quarterly Data Report, a MW affiliate. GMACCM is the lender on a $563 million commercial mortgage loan backed by the World Trade Center. The loan was securitized just before the Sept. 11 terrorist attack, and GMACCM remains the servicer on the bonds.

Taubman Centers has again refused to consider Simon Property Group's $20 per share offer for the Bloomfield Hills, Mich.-based retail real estate investment trust.In a letter addressed to David Simon, chief executive officer of SPG, and Peter Lowy, CEO of Westfield America (who has joined forces with SPG), Taubman said, "We are not prepared to recommend to the shareholders the sale of this company at an inadequate price. Nor do we believe that maximum value will be realized by selling the company at this time." The latest Taubman refusal comes in response to a Simon announcement Feb. 27 that it intends to propose, at Taubman's forthcoming March annual meeting, an amendment to an excess share provision in Taubman's charter to permit the consummation of SPG and Westfield's $20 offer for the Taubman common shares. The proposed amendment would allow SPG and Westfield to buy Taubman shares without violating the excess share provision in Taubman's charter, which prevents them from acquiring over 8.23% of Taubman shares.

Citigroup has entered into a $105 million partnership with the National Council of La Raza, Washington, D.C., committing $100 million to affordable housing and community revitalization in Hispanic neighborhoods across the country.Citigroup's Citibank Community Development will act as the administrator of the $100 million investment while coordinating its efforts with over 300 NCLR affiliate members. Administered by the Citigroup Foundation, another $5 million is earmarked to support NCLR in its effort to help transform NCLR's Raza Development Fund into the country's first community development financial institution dedicated to investments in low-income Hispanic neighborhoods. Andrew Ditton, director of Citibank Community Development, said the capital commitment is "one of the largest partnerships ever between a global financial services company and a nonprofit community development institution."

Lowe Enterprises, Los Angeles, has announced the establishment of a new investment fund targeting the subordinated debt of existing hotels and resorts.The real estate company said it has obtained approximately $160 million in investor equity commitments for the Lowe Hospitality Structured Investment Fund, providing total investment capital of about $320 million on a leveraged basis. "Access to capital for the hospitality sector is somewhat limited, as both Wall Street and traditional investors remain wary due primarily to the uncertainty of when the hospitality industry will stabilize and begin a sustainable recovery," said Ron Silva, chief investment officer of the fund and president of Lowe Hospitality Capital Markets. As a result, this is "an opportune time" to make such investments, he said. Investors in the fund include Lowe, institutional investors, and individual investors with a high net worth.

Prime Retail Inc., Baltimore, has disclosed that it recently held exclusive negotiations, now lapsed, with an unnamed party about a possible acquisition of Prime Retail, a real estate investment trust.The REIT said its financial adviser, Houlihan Lokey Howard & Zukin, "facilitated limited discussions involving certain holders of the company's preferred stock" pursuant to confidentiality agreements. The aim of the discussions was to obtain comments from the preferred stockholders regarding "the possible allocation of consideration" among the company's stockholders regarding an assumed acquisition that would result in $130 million to $135 million in consideration. Prime Retail, which specializes in owning, leasing, marketing, and managing outlet centers, can be found on the Internet at http://www.primeretail.com.

Stonehaven Realty Trust, Minneapolis, has announced the adoption of a corporate repositioning plan in concert with Paragon Real Estate Development LLC, Cleveland, under which Stonehaven would change its name and relocate to Cleveland.The plan, which calls for the company to change its name to Paragon Real Estate Equity and Investment Trust, reflects a national strategy of acquiring, developing, and redeveloping real estate and includes an improved capital stock structure and the appointment of four new trustees, Stonehaven said. The four trustees are: James C. Mastandrea, a former chairman and chief executive officer of First Union Real Estate Investments, who was appointed chairman; John J. Dee, a former senior vice president and chief accounting officer of First Union REI; Daniel G. DeVos, chairman and CEO of DP Fox Enterprises; and Michael T. Oliver, director of investments at the Alaska State Pension Fund. In addition, Mr. Mastandrea was named president of Stonehaven and Mr. Dee was named senior vice president.

Mortgage applications rose 10.8% on a seasonally adjusted basis for the week ended Feb. 28 as the Refinance Index surged well above 6000, according to the Mortgage Bankers Association of America's Weekly Mortgage Applications Survey.On an unadjusted basis, applications were up 23.7% on the week and 94.8% from the level recorded a year earlier. On a seasonally adjusted basis, the Purchase Index climbed from 309.0 to 345.9, and the Refinance Index climbed from 5989.6 to 6614.0. (The record high for the refi index, 6926.9, was reached last October.) Refinancings represented 74.7% of total applications, down from 75.3% the previous week, while adjustable-rate mortgages accounted for 13.8%. The average contract interest rate for 30-year fixed-rate mortgages fell from a record low of 5.65% to a new record of 5.57%, and points (including the origination fee) decreased from 1.49 to 1.46 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mbaa.org.

New York-based iStar Financial, a real estate investment trust, has announced a $150 million offering of five-year senior notes.The offering is being managed by Deutsche Bank Securities Inc. The REIT can be found online at http://www.istarfinancial.com.

Mid-America Apartment Communities, Memphis, has reported the completion of a refinancing of $147 million of debt.The multifamily real estate investment trust said it used swaps to lock in an interest rate for an average life of five years and that the refinancing will save $0.08 per share on an annualized basis compared with the previous financing. A total of $180 million in new financing was provided by Fannie Mae through one of its Delegated Underwriting and Servicing lenders, Prudential Mortgage Capital. Some of the financing was used to pay down the REIT's bank lines of credit. The company can be found online at http://www.maac.net.

Two classes of Banc of America Large Loan Inc.'s series 2002-FLT1 have been downgraded and removed from Rating Watch Negative by Fitch Ratings.Class H was downgraded from BBB-plus to BBB, and class J was downgraded from BBB to BB-plus. In addition, the ratings on 11 other classes in the deal were affirmed. The downgrades were attributed to a decline in performance of two loans, Windsor Court Hotel and Starrett Lehigh. The net cash flow of the former has declined 38%, and the loan is no longer considered investment-grade, Fitch said. The latter, the largest loan in the pool (21.6%), has a projected net cash flow for 2003 that is 28% lower than at issuance, the rating agency said. In a related action, Fitch downgraded two classes of Banc of America Structured Notes Inc., series 2002-1, and removed them from Rating Watch Negative. Class A was downgraded from BBB-plus to BBB, and class B was downgraded from BBB to BB-plus. The ratings on the BASN classes depend on the ratings of the underlying certificates, classes H and J of the BALL transaction. Fitch can be found on the Web at http://www.fitchratings.com.