Originations

GreenPoint Financial Corp., New York, has reported net income from continuing operations of $498 million ($5.53 per share) for 2002, compared with $410 million ($4.50 per share) in 2001.For the fourth quarter, the company reported record net income from continuing operations of $1.46 per share, up 14% from that of a year earlier. Originations of "A" quality mortgage loans totaled a record $33.1 billion in 2002, up 26% from $26.3 billion in 2001. Thomas S. Johnson, GreenPoint's chairman and chief executive officer, said the company achieved the record mortgage production "by continuing to open new branches and increasing market penetration in our existing branches, all supported by our investments in technology. In addition, the credit quality of our held-for-investment mortgage portfolio remained very strong." The company's website address is http://www.greenpoint.com.

Wells Fargo & Co., San Francisco, has reported record net income of $5.71 billion ($3.32 per share) for 2002, up 11% from $5.15 billion ($2.97 per share) in 2001.For the fourth quarter, net income totaled a record $1.47 billion ($0.86 per share), up 10% from $1.33 billion ($0.77 per share) a year earlier. Wells Fargo's mortgage origination volume totaled $333 billion for the year, which it termed an industry record. "The home finance businesses saw exceptional growth in 2002, with total originations of $333 billion surpassing our 2001 industry record of $202 billion," said Mark Oman, group executive vice president for home and consumer finance. The company's owned servicing portfolio ended the year at $535 billion, up 26%, and its home equity portfolio grew 41% to $36 billion, Mr. Oman said.

Taubman Centers has decisively rejected Simon Property Group's revised offer to acquire the Bloomfield Hills, Mich.-based retail real estate investment trust at $20 per share.Taubman sees the Simon offer as "inadequate, opportunistic, and clearly not in the best interests of Taubman Centers shareholders," and has advised its shareholders not to tender their shares to Simon. (The Simon offer holds good through Feb. 14.) According to Taubman, the offer does not adequately reflect the value of the company's assets or its growth prospects. Taubman cited several factors contributing to its decision, including: expectations that its assets will generate increased returns over the next few years; the company's outperformance of its peers in recent years; and the fact that the Taubman family and other shareholders who represent over one-third of the voting power of the company have indicated that they are not interested in selling. The Indianapolis-based Simon, the largest retail real estate investment trust by market capitalization, had also obtained the support of Westfield America Trust for its latest bid. Taubman in turn has enlisted the help of Sheldon M. Gordon of Gordon Group Holdings.

Sutter Holding Co. Inc., San Francisco, has announced the acquisition of the capital stock of Easton Mortgage Corp. for $1.0 million in cash and $2.75 million in secured promissory notes.Sutter said it also issued warrants to acquire 60,000 shares of its common stock for $11 per share. The promissory notes, which pay interest at 4% and amortize over four-and-a-half years, are subject to adjustment in the event of a decline in Easton's earnings before interest, taxes, depreciation, and amortization over the next two years, Sutter said. Easton, a mortgage bank licensed in California, originated over $95 million in mortgages in 2002, primarily "A" rated first mortgages. Easton can be found online at http://www.eastonmtg.com.

Fidelity National Financial Inc., a title insurance and real-estate-related services company based in Irvine, Calif., has agreed to acquire Lender's Service Inc., an appraisal management, residential title, and closing firm based in Coraopolis, Pa., a suburb of Pittsburgh.The terms of the deal were not disclosed. LSI will be part of Fidelity's National Lender Solutions group, which provides title, closing, and recording services to the mortgage origination and servicing markets. "The purchase of LSI signifies a major step toward Fidelity National's goal of building National Lender Solutions into a full-service provider to the mortgage industry," said Ron Frazier, senior vice president and National Lender Solutions division manager. LSI said its appraisal, title, and closing clients include 23 of the top 25 mortgage originators. Its majority investor is Desai Capital. LSI is already a participant in the RealEC transaction network, which is majority owned by Fidelity. Fidelity can be found online at http://www.fnf.com, and LSI can be found at http://www.lendersservice.com.

Fears that a change in immigration policy could throw cold water on the hot housing market are unfounded, according to the director of the Joint Center for Housing Studies at Harvard University.Even if the Bush administration were to shut the doors completely to further immigration, the impact on housing would be negligible, at least in the short term, Nicolas Retsinas said at a summit on the U.S. real estate market in Los Angeles earlier this month. "The immigrants who will be buying homes over the next few years are already here," said Mr. Retsinas, noting that the Joint Center's research shows immigrants don't enter the housing market until they are in America for 11 years. And at the National Association of Home Builders convention in Las Vegas, officials from Fannie Mae and Freddie Mac said the concern isn't with the number of immigrants but rather the ability to reach them. "These potential homebuyers have unique needs," said Rebecca Froass, manager of industry relations at Freddie Mac. Typically, the primary barriers to ownership are credit issues and a lack of funds for a downpayment and closing costs. But Ms. Froass said minorities and immigrants face other hurdles, including a lack of affordable housing, little understanding of the homebuying process, and continuing financial obligations in their home countries.

Armed for the first time with data showing the superior performance of construction loans, the National Association of Home Builders is stepping up its pursuit of additional sources of production financing.Capital market support for production lending is "one of NAHB's highest priorities" for 2003, assistant staff vice president Michelle Hamecs said at the group's annual convention in Las Vegas. The push is coming at a time when builders are having little trouble finding the backing they need to buy land, develop it, and put up houses. But Ms. Hamecs, recalling the severe credit crunch that plagued the business in the early 1990s, said "we all remember the bad old days ... and we don't want to go back there." As a "first step," NAHB researchers believe they finally have the evidence they need to convince regulators that residential construction mortgages perform well relative to other types of real estate loans. Information from the Office of Thrift Supervision that was not previously available to the public shows "the loss experience on single-family construction loans has been very close to the very low rate" on permanent mortgages granted to consumers, they said. "The bottom line," Ms. Hamecs said at an NAHB Capital Markets Subcommittee meeting, is that the net chargeoff rate for one- to four-unit residential construction loans is "just a hair above" that for home mortgages.

Fannie Mae chairman Franklin Raines isn't worried about a housing price bubble, which he says is nothing but a bunch of hot air. But he is concerned about the country's housing supply."If supply falls too far behind demand, we could wind up with a widespread housing affordability crunch or even a national housing crisis," he said at the National Association of Home Builders convention. Addressing the NAHB's Executive Board, Mr. Raines said the "one major caveat" regarding what Fannie Mae has labeled the "American Dream Decade" is a lack of new and affordable homes for people to buy. Because of land constraints and growth restrictions, he warned, builders will have a tough time erecting the 1.6 million new houses needed annually through the remainder of the decade to meet the projected growth in households. Calling the lack of buildable land the "biggest constraint on housing today," he said the cost of land has gone up in every place where growth control measures restrict development. From California to North Carolina, Mr. Raines said, "the examples are everywhere."

The National Association of Home Builders has given its "strong support" to the plan by the Federal Home Loan Bank of Chicago to add a shared funding enhancement to its highly successful Mortgage Partnership Finance program.But it isn't the blanket endorsement supporters of the program had been seeking. The NAHB had been asked by the FHLBanks of Chicago and Pittsburgh, as well as Wells Fargo, to sign a joint letter to the Federal Housing Finance Board supporting the shared funding program. But the association's leadership decided that while it liked the idea and would have no problem voicing support, it would be better to send its own letter so it could "better voice" its own interest in expanding the MPF beyond just single-family mortgages. The NAHB would like to see the MPF and the SFP programs used to facilitate the development of additional FHLBank programs, including multifamily mortgages and housing production loans, NAHB President Gary Garczynski wrote in a letter to Finance Board Chairman John Korsmo. The NAHB can be found online at http://www.nahb.com.

Single-family housing starts rose 4.9% in December as builders ended the year with a surge in construction activity.The U.S. Commerce Department reported that single-family starts increased from a seasonally adjusted annual rate of 1.40 million units in November to 1.47 million units in December. "Given that interest rates were coasting downward in December, it is not that surprising that we would see housing starts follow suit," said Freddie Mac deputy chief economist Amy Cutts. She also noted that mild weather in the South and the West contributed to the December starts. For 2002, single-family starts totaled 1.36 million units, up 6.7% from 1.27 million in 2001. For 2003, the National Association of Home Builders is predicting that single-family starts will edge down to 1.31 million units. Meanwhile, multifamily starts rose 3.9% to 321,000 units in December. For all of 2002, multifamily starts totaled 306,300.

Entrust Financial Services Inc., Denver, has reported the completion of a $2 million financing to increase its mortgage banking lending capacity.Entrust Financial, the parent company of wholesaler Entrust Mortgage Inc., said it borrowed the $2 million on Dec. 31 from BBSB LLC, a private Colorado-based company with which it had no prior affiliation. Entrust Financial executed a 27-month convertible promissory note under which only interest (at a 12% annual rate, payable monthly) is payable until maturity. The company said bonus interest of 33% is payable upon the maturity or the prepayment of the note, but that BBSB has the option at that time to forgo the bonus interest and convert the $2 million principal amount into common shares of Entrust at a conversion price of $3 per share, subject to certain conditions.

Hospitality Properties Trust, Newton, Mass., has announced that it will redeem all $150 million of its outstanding 8.5% senior notes due in 2009 at par plus accrued interest.The real estate investment trust said the redemption is expected to occur on or about Feb. 17. The REIT also announced the pricing of a public offering of $175 million of 6.75% senior notes due 2013 at 99.396. The proceeds will be used for the redemption and for general business purposes. Credit Suisse First Boston and Wachovia Securities were the joint book-running managers of the offering. The REIT can be found on the Internet at http://www.hptreit.com.

Liberty Property Trust, Malvern, Pa., has replaced its $450 million credit facility due in April with a $350 million unsecured revolving credit facility arranged by Fleet Securities Inc.The real estate investment trust said the three-year facility was syndicated to a group of 11 U.S. banks. Based on the REIT's current credit rating, borrowings under the facility will bear interest at 70 basis points above the London interbank offered rate. Liberty, which specializes in office and industrial properties, can be found online at http://www.libertyproperty.com.

Key Commercial Real Estate has been renamed Keybank Real Estate Capital to better reflect the broader scope of its operations, and several key personnel changes have been made at the commercial real estate lending company.KeyCorp, the Cleveland-based parent of the company, said John E. Case was recently named chief operating officer and executive vice president of KeyBank REC after George E. Emmons Jr. assumed additional responsibility for heading up KeyCorp's middle-market commercial bank. Mr. Emmons remains executive vice president and national manager of Keybank REC, with overall responsibility for the group. Commenting on the name change, Mr. Case said the company in recent years "has evolved from being largely a balance-sheet lender to a full-service, national commercial real estate company that offers clients commercial banking, mortgage banking, and investment banking solutions." In a related development, E.J. Burke has been promoted to managing director and executive vice president of Keybank REC's commercial mortgage group, replacing Mr. Case.

The delinquency performance of North American commercial mortgage-backed securities last year was impressive and "somewhat surprising" in view of the economic slump, according to Standard & Poor's.The CMBS suffered 178 downgrades in 2002, nearly triple the number of the previous year, but more than half of the downgrades in the fourth quarter were attributable to bonds whose ratings are dependent on the ratings of other companies, S&P said. "Excluding the dependent transaction-related activity, rating actions for the quarter were more positive than negative, as upgrades surpassed downgrades by a ratio of 1.75 to 1," said Roy Chun, a managing director in S&P's structured finance surveillance group. "Additionally, the delinquency rate remained low and held steady for most of the year. It peaked early in the year at about 1.6% and has stayed generally flat, despite the weakness in the economy and real estate markets." The information is contained in S&P's Structured Finance Global Ratings Roundup Quarterly for the fourth quarter.

New York-based iStar Financial Inc., which provides structured financing to owners of real estate, will replace National Golf Properties Inc. in the S&P REIT Composite Index, according to Standard & Poor's.The replacement will occur after the close of trading on a date to be announced. S&P said the reason for the change is that National Golf Operating Properties LP is acquiring National Golf Properties.

Ramco-Gershenson Properties Trust, Southfield, Mich., has announced the renewal and expansion of its secured revolving credit facility with Fleet National Bank.The $110 million facility has been expanded to $125 million, and it contains an accordion feature allowing for a further increase of up to $25 million, the real estate investment trust said. The revolver bears an interest rate of 150-200 basis points above the London interbank offered rate, depending on the company's leverage ratios. In addition, Ramco amended its unsecured term loan with Fleet and Key Bank, allowing it to borrow up to $40 million, with a $10 million accordion feature. The shopping center REIT can be found on the Web at http://www.ramcogershenson.com.

Equity Office Properties Trust, Chicago, has issued $500 million of 5.875% unsecured notes due January 2013.The office real estate investment trust said the net proceeds of approximately $495 million from the offering will be used partly to retire a $300 million unsecured note maturing in February. The rest will be used to repay balances outstanding under the REIT's $1 billion revolving credit facility as well as for various corporate purposes, EOPT said. Goldman, Sachs & Co. was the underwriter for the transaction.

Nehemiah Corp. of California, Sacramento, has reported raising $26 million in first-round financing for the Nehemiah Sacramento Valley Fund, a real estate equity fund formed to invest in mixed-use development projects in low- and moderate-income communities in the Sacramento Valley region.Sponsored by the Nehemiah Community Reinvestment Fund and managed by Pacific Coast Capital Partners, NSVF has received investments from California Federal Bank, California State Automobile Association, Union Bank, Washington Mutual, and Wells Fargo Bank, as well as Nehemiah. "The Nehemiah Sacramento Valley Fund is a significant part of our organization's overall strategy to encourage urban renewal through comprehensive, geographically focused affordable housing and community redevelopment programs," said Scott Syphax, president and chief executive officer of Nehemiah. Nehemiah can be found online at http://www.getdownpayment.com.

Two classes of LB Commercial Mortgage Trust commercial mortgage pass-through certificates, series 1998-C4, have been downgraded by Moody's Investors Service.Class L was downgraded from B3 to Caa1, and class M was downgraded from Caa2 to Caa3. Moody's also affirmed the ratings of 13 other classes in the deal. The downgrades were attributed to the erosion of cash flows from certain underlying assets. The rating agency said the certificates are collateralized by 285 loans secured by 327 commercial and multifamily properties, and the transaction consists of three collateral components: a conduit (61.8%), large loans (34.4%), and credit tenant leases (3.8%). Five loans with a total balance of $243.7 million (12.6%) are in special servicing, Moody's said. The largest, the $230.8 million TRT Holdings Loan, was transferred to special servicing due to noncompliance with the terrorism insurance requirement, but the recently signed Terrorism Risk Insurance Act is expected to help resolve the issue, Moody's said. The special servicer has estimated that the remaining four have aggregate losses of $2.6 million. Moody's can be found online at http://www.moodys.com.