Originations

Mortgage applications rose 6.4% on a seasonally adjusted basis for the week ended Jan. 24, according to the Mortgage Bankers Association of America's Weekly Mortgage Applications Survey.On an unadjusted basis, applications were down 2.6% on the week and up 121.6% from the level recorded a year earlier. On a seasonally adjusted basis, the Purchase Index climbed from 355.3 to 365.5, and the Refinance Index rose from 5433.4 to 5858.1. Refinancings represented 75.4% of total applications, down from 75.7% the previous week, while adjustable-rate mortgages accounted for 13.2%. The average contract interest rate for 30-year fixed-rate mortgages decreased from 5.74% to 5.72%, and points (including the origination fee) increased from 1.57 to 1.60 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mbaa.org.

The common and preferred stocks of Lodgian Inc., an Atlanta-based owner and operator of hotel property, have been approved for listing on the American Stock Exchange.Trading began Tuesday under the symbols LGN and LGN,Pr, respectively, Lodgian said. The company emerged from bankruptcy in November 2002. Before filing for bankruptcy, Lodgian stock was listed on the New York Stock Exchange. Lodgian can be found online at http://www.lodgian.com.

Reckson Associates Realty Corp., Melville, N.Y., has announced that its operating partnership, Reckson Operating Partnership LP, has refinanced its $500 million unsecured revolving credit facility with a group of 14 banks.The three-year facility includes options for a one-year extension and for expansion to $750 million upon receiving additional lender commitments, Reckson Associates said. It bears interest at 90 basis points over the London interbank offered rate, a reduction of 15 bps from the previous facility's rate. J.P. Morgan Securities Inc. and Salomon Smith Barney Inc. were the co-lead arrangers and joint bookrunners. Reckson Associates, a real estate investment trust, can be found online at http://www.reckson.com.

J. D. Carter Steele has been named senior vice president and chief operating officer of Healthcare Realty Trust Inc., Nashville, Tenn.Mr. Steele, 54, has been the principal asset administration officer for the real estate investment trust since 1997. He was previously a partner with the commercial real estate brokerage firm McWilliams & Steele. The REIT can be found on the Web at http://www.healthcarerealty.com.

Thomas P. MacManus has been appointed president of GMAC Commercial Mortgage Corp., Horsham, Pa., and executive vice president of its parent company, GMAC Commercial Holding Corp.Mr. MacManus joined GMACCM in 1997 and was recently named executive vice president of its Proprietary Lending Group, the parent company said. He will head the North American operations of the holding company. GMACCM can be found online at http://www.gmaccm.com.

Class J of GMAC Commercial Mortgage Securities Inc. series 1997-C1 has been placed on Rating Watch Negative by Fitch Ratings.Fitch said the rating action was due to interest shortfalls and an increased amount of loans of concern, including one involving a Kmart store whose lease was recently rejected. The interest shortfalls result mainly from appraisal subordinate entitlement reductions stemming from appraisal reductions on two specially serviced loans, the rating agency said.

Four classes of Morgan Stanley Dean Witter Capital I Inc. commercial mortgage pass-through certificates, series 2000-XLF, have been downgraded by Moody's Investors Service and placed on review for possible further downgrade.The downgrades are as follows: class C, from A3 to Baa2; class D, from Baa2 to Ba2; class E, from Ba3 to B3; and class F1, from B2 to Caa2. Moody's said the downgrades were prompted by the performance of the $160 million Market Center Loan (40.3% of the pool), which matures on Feb. 1, 2003 and is expected to default. It is secured by two Class A office properties on Market Street in San Francisco that are only 17.1% occupied, the rating agency said. Class F1 is supported solely by the Market Center Loan, while classes C, D, and E are pooled classes supported by all four loans remaining in the pool. "While it is uncertain what the ultimate recovery on the loan will be, it is likely that the proceeds will be less than the loan balance, resulting in a significant loss to Class F1," Moody's said.

Rohit Patel of Chicago has acquired a controlling interest in Heritage Cos. Inc. and plans to refocus the company, originally an executive search firm, on real estate development, according to Heritage.Carl Gessner, the newly appointed chief executive officer of the company, said the new strategy involves growth by acquisition of mature businesses in the hospitality, residential, and commercial real estate sectors. "We are poised and under contract for the close of two substantial real estate acquisitions in the next few weeks," Mr. Gessner said. As part of the restructuring, Thomas Heckman has resigned as president and CEO of Heritage, and Daniel J. Ryan has been named to assume the title of president, the company said.

Commercial mortgage-backed securities issuance worldwide totaled $104 billion in 2002, according to Moody's Investors Service.Among the countries and regions contributing to that total, Moody's said, were the United States, where $66 billion in CMBS came to market in 2002; Europe, where approximately 29 billion euros (about $31 billion) was issued; and Canada, where approximately C$2 billion (about $1.3 billion) came to market. The rating agency said it expects that U.S. CMBS issuance will rise slightly in 2003 and that combined issuance outside the United States will inch downward. Moody's can be found online at http://www.moodys.com.

Washington Mutual, Seattle, and Fannie Mae have announced an "affordable lending" alliance designed to boost lending by $85 billion over five years to low- and moderate-income borrowers, minorities, immigrants, and first-time homebuyers.The alliance, which will focus initially on Los Angeles and Dallas, is part of WaMu's $375 billion, 10-year Community Commitment and Fannie Mae's $2 trillion American Dream Commitment to increase homeownership rates by the end of the decade. WaMu will carry out the new effort, partly by offering affordable mortgage products such as the Washington Mutual Community Access program. WaMu said the program is a combination of flexible approval features, including: consideration of alternative credit (with no credit score requirements in some cases); zero-points options on origination fees; 3%-5% downpayment options, with only 1%-3% required from the borrower's own funds; allowance of up to 45% of a borrower's gross income to be used for mortgage payments; and no required cash reserves for single-family residences. The companies can be found online at http://www.wamu.com and http://www.fanniemae.com.

Sales of new single-family homes rose 3.5% in December as 2002 turned out to be another record year for the homebuilding industry -- beating last year's record by 7.5%.New homes totaled 976,000 for all of 2002, compared with 908,000 in 2001, according to the U.S. Commerce Department. The department also reported that new-home sales rose from a seasonally adjusted annual rate of 1.045 million in November to 1.082 million in December -- the fifth consecutive month in which sales have exceeded the 1 million rate. The National Association of Home Builders is forecasting that sales of newly constructed homes will slow to 942,000 this year, even though sales ended the year at a record pace and inventories of unsold new homes are lean. The second-half surge in new-home sales was stimulated by low and falling interest rates. "This is largely a mortgage rate story," said NAHB economist Michael Carliner. He thinks mortgages rates have bottomed out and will be up to 6.5% by the fourth quarter. "It means we will still have very low interest rates, but we won’t have the incentive of falling rates," Mr. Carliner said. New-home prices, adjusted for quality, rose 4.6% in 2002 and the average price was 6.3% higher, the Commerce Department reported. The department can be found online at http://www.doc.gov.

Senior Housing Properties Trust, Newton, Mass., has announced a commitment to a sale/leaseback transaction and a first-mortgage financing to provide $67.9 million to Alterra Healthcare Corp. to facilitate Alterra's reorganization plan.The trust said the $61 million sale/leaseback involves 18 properties in 10 states with 894 assisted-living units, with a 15-year term and renewal options for up to 30 years. The $6.9 million, 8% mortgage financing involves six properties in two states with 202 assisted-living units. It matures on June 30, 2004. Alterra filed for Chapter 11 bankruptcy protection Jan. 22. Senior Housing Properties, a real estate investment trust, can be found online at http://www.snhreit.com.

Fleetwood Enterprises Inc., a Riverside, Calif., manufactured housing builder and financing company, has restructured its line of credit.The maximum amount of the line has been reduced from $190 million to $110 million. An amendment to the original agreement allows Fleetwood to make additional capital contributions to its HomeOne Credit finance subsidiary and to enter into a warehouse line of credit to further support the operations of HomeOne. In return, Fleetwood paid a fee of 0.375% of the new commitment amount to the line of credit syndicate, which is lead by Bank of America NA, Charlotte, N.C. "The reduction in the availability reserve immediately improves our liquidity, and the additional flexibility that the amendment provides will help us accomplish such key goals as building our HomeOne finance company," said Boyd R. Plowman, executive vice president and chief financial officer of Fleetwood.

The real estate investment trust sector may face "increased negative ratings pressure" if current economic problems persist, according to Fitch Ratings.The rating agency has revised its rating outlook for the multifamily sector from stable to negative and maintained a negative rating outlook for the office sector. John Olert, a Fitch managing director, said the actions were prompted by "continued uncertainty on a sustained recovery and the related benefits of rent stabilization and growth." Multifamily REITs have been hurt by a continued supply/demand imbalance caused by high unemployment levels, increased purchases of single-family homes, and rising levels of construction starts and deliveries. While Fitch's rating outlook for industrial REITs remains stable, the rating agency said it believes the earnings growth and the stability of the sector has weakened. And even though Fitch's outlook for the retail sector remains stable as well, the rating agency cautioned that many retailers would have to close underperforming locations if the United States falls into a double-dip recession and consumer confidence erodes further.

Six classes in five commercial mortgage-backed security transactions have been downgraded by Fitch Ratings in connection with recently announced Kmart store closings.The downgrades are as follows: Credit Suisse First Boston series 1998-C1, class I, from B-minus to CCC; DLJ Commercial Mortgage Corp. series 2000-CKP1, class B-7, from B-plus to B-minus; First Union Commercial Mortgage Trust series 2000-C1, class M, from B-minus to CCC; Mortgage Capital Funding Inc. series 1997-MC1, class H, from B to CCC; and Mortgage Capital Funding Inc. series 1987-MC2, class J, from B to B-minus, and class K, from B-minus to CCC. In addition, class G of CSFB series 1997-C2 was placed on Rating Watch Negative. Fitch said it reviewed 40 multiborrower CMBS deals containing loans involving Kmart stores now scheduled to close. Kmart announced Jan. 14 that it will close an additional 326 stores and seek bankruptcy court approval for the rejection of the leases. "Given the size and scope of the Kmart default, the fact that there have been so few downgrades serves as testament to the resilience and effectiveness of the structure and loan diversity of conduit CMBS," said Karen Trebach, a Fitch director. The rating agency can be found online at http://www.fitchratings.com.

Freddie Mac acquired $91.22 billion in home mortgages during December, yet another record month for the secondary market giant.For the year, Freddie bought a record $642.3 billion in product, a 35% increase from the level recorded in 2001. Freddie's chief competitor, Fannie Mae, bought $1.09 trillion in mortgages in 2002, also a record. (Fannie's 2002 "business volume," a different way of measuring purchases, was $848 billion.) Freddie's purchase commitments were $26 billion in December, down from $29 billion in November, which means January's purchase volume will likely be weaker than in the previous month. Together, Fannie and Freddie bought about $1.7 trillion in product, which means the two gobbled up 65% of all loans originated in 2002. The market share number is based on an estimated $2.6 trillion in mortgage production. (The estimate comes from National Mortgage News.)

Freddie Mac has reported record unaudited net income of $5.76 billion ($7.95 per share) for 2002, up 39% from $4.15 billion ($5.64 per share) the year before, but the results are preliminary and will be restated.The results are expected to be revised upward after PricewaterhouseCoopers finishes auditing the government-sponsored enterprise's books for 2002 and re-auditing its financial statements for 2001 and possibly 2000, Freddie Mac said. Unaudited net income totaled $1.70 billion ($2.38 per share) for the fourth quarter, up 25% from $1.36 billion ($1.87 per share) a year earlier. "We fully support the re-audit, and we are confident it will have no adverse impact on the company's fundamental strength," said Leland C. Brendsel, chairman and chief executive officer of the GSE. "Last week, all three major rating agencies affirmed our high ratings." Financial highlights cited by the GSE include: total mortgage portfolio growth of $173 billion, or 15%; retained portfolio growth of $76 billion, or 15%; and credit losses representing only 0.7 basis points of its average total mortgage portfolio. Freddie Mac can be found online at http://www.freddiemac.com.

Existing-home sales rose 5.2% in December to cap a record sales year in which home prices appreciated at the highest rate since 1980.The National Association of Realtors reported that sales of existing single-family homes totaled 5.56 million last year, beating the previous record of 5.30 million in 2001. On a monthly basis, resales rose from a seasonally adjusted annual rate of 5.57 million in November to a 5.86 million rate in December. NAR chief economist David Lereah said the housing sector remains very healthy and that he expects 2003 to be probably the "second-best year ever." For all of 2002, the national median existing-home price rose 7.1% to $159,300, compared with $147,800 in 2001. In December, the median sales price was $164,00. The NAR can be found on the Web at http://realtor.org.

Standard & Poor's has announced changes to the S&P MidCap 400 and S&P REIT Composite indexes that will affect the real estate investment trust sector.United Dominion Realty Trust, a Highland Ranch, Colo.-based multifamily REIT, and AMB Property Corp., a San Francisco-based industrial REIT, are replacing two non-REITs -- which are being removed because of low market capitalization -- in the S&P MidCap 400 Index on Jan. 27. In another change, Keystone Property Trust, a West Conshohocken, Pa.-based industrial REIT, is replacing JDN Realty -- which is being acquired by Developers Diversified Realty -- in the S&P REIT Composite Index on Jan. 31.

Three classes from two single-asset commercial mortgage-backed securities deals have been placed on Rating Watch Negative by Fitch Ratings due to interest shortfalls related to terrorism insurance costs.The affected securities are classes F and G of Danbury Fair Mall Trust 2001-DFM and class E of Opryland Hotel Trust 2001-OPRY. Fitch said they were placed on watch as a result of interest shortfalls stemming from expense reimbursements related to terrorism insurance costs incurred by Wells Fargo Bank, the master servicer for each transaction. Fitch can be found online at http://www.fitchratings.com.