Originations

Westfield America Trust, an Australian property trust that is the majority owner of the Westfield America retail portfolio, is acquiring a 50% stake in Fashion Square Sherman Oaks, a California regional mall, for $67 million from a U.S. affiliate of the Prudential plc.In related transactions, a U.S. affiliate of Prudential ñ a U.K. holding company in the financial services arena that is not affiliated with Prudential Financial ñ has acquired a 25% interest in Westfield America's Garden State Plaza for a total consideration of $193.8 million, including the assumption of $65 million in mortgage debt on the property. As well, the U.S. affiliate of Prudential is acquiring a further 15% interest in Garden State Plaza, a two million square foot New Jersey mall, for $116.3 million in a combination of cash and mortgage debt, between May 2004 and May 2005, the Los Angeles-based Westfield America Trust reports. The affiliate also has the option, exercisable between May 2004 and May 2005, to acquire an additional 10% interest in the property for $77.5 million, also payable in a combination of cash and mortgage debt.

ABN Amro Mortgage Group, Inc. has reported year-to-date fundings of $106 billion.The group, which released statistics for the period ending Nov. 30, also reported production of $12.68 billion, with 78,541 loans funded during the month. This represents an increase of 25% from November 2001 totals. Year-to-date, ABN Amro's production for 2002 represents an increase of $33.4 billion from November 2001's year-to-date total. ABN Amro can be found online at http://www.abnamro.com.

Standard & Poor's is concerned that mortgages not purchased by the government-sponsored enterprises due to Georgia's strict new lending law may increasingly be placed in securitized transactions it rates.The rating agency said the development holds the potential for adverse selection in the nonconforming market and, as a result, "will continue to monitor the developments of this legislation and similar legislation pending in other states and adjust its requirements accordingly to ensure investors are not exposed to undue risk." The rating agency said that it currently "prefers a representation and warranty be added to transactions, as applicable, stating no loans are classified as either high cost or covered." in pools containing loans affected by the law. S&P can be found on the Web at http://www.standardandpoors.com.

The Federal Deposit Insurance Corp. is becoming more wary of falling rental rates and increasing vacancies in office and industrial properties, which could lead to loan losses down the road."Although the outlook for commercial real state markets is rather pessimistic, banks have not yet seen deterioration in CRE loan portfolios," FDIC says in a semi-annual review of emerging risks. However, there are "sporadic reports of office properties selling below replacement cost," FDIC point outs, which could indicate coming problems. Meanwhile, FDIC is warning that the slowdown in 13 previous high-growth cities, such as Atlanta, San Francisco/Oakland, and Seattle, has left many community banks with large concentrations of high-risk business and CRE loans. These conditions "warrant extra attention to risk management practices on the part of lenders," FDIC says. FDIC also is keeping its eye on subprime lenders, with special attention on subprime credit card lenders. "Institutions identified as subprime lenders continue to be over-represented among troubled institutions," FDIC says in the semi-annual report.

The Mortgage Bankers Association of America has reported record low rates, but also a decrease in applications.The MBA's index for the week ending Dec. 20 decreased 7.8% to 908.3 on a seasonally-adjusted basis from 985.5 the previous week. On an unadjusted basis, the index decreased 8.4% but was up 77.0% compared to the same week a year earlier. Purchases decreased to 359.4 from 379.9 the previous week and refinances decreased to 4101.0 from 4507.6 the previous week. Conventional loans decreased to 1297.6 from 1415.5 the previous week and government loans decreased to 258.7 from 267.8 the previous week. Refinancing activity represented 72.5% of total applications, decreasing from 73% the previous week. The share of ARM activity decreased to 13.3% from 14.1% the previous week. The average contract interest rate for 30-year fixed rate mortgages decreased to 5.74%, tying the record low that was previously set the week ended Nov. 8. The MBA can be found online at http://www.mbaa.org.

Equity One Inc., a real estate investment trust based in North Miami Beach, Fla., has announced that its wholly owned subsidiary, UIRT Ltd., has settled a lawsuit brought by Settler's Way & Highway Six Inc.UIRT agreed to pay the plaintiff $1.9 million, which will be recognized as a nonrecurring charge in its financial results for the fourth quarter, the shopping center REIT said. In November, a Texas jury entered a judgment of approximately $15.9 million against the defendants, including compensatory and exemplary damages, Equity One said. The settlement agreement includes mutual releases regarding all matters arising from the suit. The REIT can be found online at http://www.equityone.com.

Four classes of GMAC Commercial Mortgage Securities Inc.'s commercial mortgage pass-through certificates, series 2000-C3, have been downgraded by Fitch Ratings.The downgrades were as follows: class S-MAC-1, from A-plus to A-minus; class S-MAC-2, from A-minus to BBB; class S-MAC-3, from BBB to BB-plus; and class S-MAC-4, from BBB-minus to BB. The ratings on 16 other Fitch-rated classes of the deal were affirmed. The rating agency attributed the downgrades to the decreased performance of the MacArthur Center loan. "The downgraded classes represent the tranches of the MacArthur Center B note," Fitch said. "The rest of the pool's performance remains stable." Fitch can be found online at http://www.fitchratings.com.

Aegis Realty Inc., a New York City-based real estate investment trust, has agreed to merge into a subsidiary of Phillips Edison Ltd., a privately held owner of grocery-anchored community shopping centers, for a total consideration of up to $170.2 million.Under the merger agreement, Phillips will acquire the REIT's entire portfolio of shopping center assets, which consists of 28 community shopping centers in 15 states, Aegis said. The total price includes the purchase of all Aegis common stock, options to buy common stock, and operating partnership units of Aegis Realty Operating Partnership LP for approximately $101.8 million and the assumption of $68.4 million of the REIT's debt. Each share of Aegis common stock will be converted into the right to receive $11.52 per share in cash. Aegis said the transaction was the result of a year-long process of exploring options with its financial adviser, RBC Capital Markets.

Mack-Cali Realty Corp., Cranford, N.J., has reported the completion of two financing transactions with the Teachers Insurance Annuity Association.In one transaction, the real estate investment trust exchanged $90 million in 7.18% unsecured notes, due to mature in December 2003, for $94.9 million in 6.15% unsecured notes maturing December 2012. In the second transaction, the REIT obtained a $19.5 million, 10-year mortgage loan carrying a 6% interest rate. The mortgage is secured by Soundview Plaza, a 179,260-square-foot office property in Stamford, Conn. Mitchell Hersh, Mack-Cali's chief executive officer, said the REIT remains "committed to our strategy of maintaining a high level of unencumbered assets, which remains at 77% of our portfolio's square footage." Mack-Cali can be found on the Web at http://www.mack-cali.com.

HRPT Properties Trust, Newton, Mass., has increased its revolving bank credit facility from $425 million to $560 million and extended its maturity by a year.The facility, which was syndicated to 20 banks, now matures April 30, 2006, the real estate investment trust said. The facility carries an interest rate of 80 basis points over the London interbank offered rate. The bank syndicate includes Wachovia Bank as administrative agent, Wells Fargo Bank as syndication agent, Fleet National Bank, Commerzbank AG, and The Bank of New York as documentation agents, and SunTrust Bank as senior managing agent. The REIT's website address is http://www.hrpreit.com.

Federal Realty Investment Trust, Rockville, Md., has announced that the planned resignation of Steven J. Guttman as chairman, chief executive officer, and trustee of the company has been moved up from March to Jan. 1.Donald C. Wood will take over as CEO of the real estate investment trust at that time, and trustee Mark S. Ordan will assume the position of non-executive chairman of the board, the equity REIT said. Mr. Guttman, who said he is resigning to pursue "personal and other business interests," joined Federal Realty in 1972 and became chief operating officer in 1975. He was named president, chief executive officer, and trustee in 1980 and chairman in 2001. Mr. Wood joined the REIT in 1998 as chief financial officer and was promoted to senior vice president and chief operating officer in 1999. He was named president and COO in 2001. Federal Realty can be found on the Web at http://www.federalrealty.com.

In a move that could increase liquidity in the commercial mortgage-backed securities market, the National Credit Union Administration has proposed to allow the nation's 6,000 federally chartered credit unions to invest in securities backed by commercial mortgages or by a mix of residential and commercial mortgages.Federally chartered credit unions are currently limited to investing in Treasury and agency (Fannie Mae and Freddie Mac) securities. The nation's credit unions held more than $10 billion of residential MBS at the end of the third quarter. Those were mostly collateralized mortgage obligations or straight mortgage pass-through certificates. The proposal by the federal regulator, issued for a 60-day comment period, would allow well-run credit unions to buy CMBS that are rated in one of the two highest categories by at least one national rating service.

The California Department of Corporations in Sacramento has filed a $9 million lawsuit against Long Beach Mortgage Co., a wholly owned subsidiary of Washington Mutual, for allegedly continuing to charge subprime borrowers unlawful interest after being warned years ago that its practices violate state law.The suit, filed in the Superior Court of Sacramento County, says Long Beach admitted in 1999 that it had charged excess interest on nearly 24% of these loans, for an overcharge of more than $625,000, and agreed to fix the problem. Borrowers were allegedly overcharged amounts ranging from $4.19 to $3,248.24. Two years later, the department concluded that Long Beach was still overcharging its borrowers by initiating interest charges on mortgage loans prior to the time allowed by law. Under California law, mortgage lenders may not begin charging interest on a loan until one day before the loan closes. In an e-mailed statement, WaMu said it couldn't comment on the litigation, but that Long Beach "is committed to adhering to our responsible mortgage lending principles." The department can be found on the Web at http://www.corp.ca.gov, and Long Beach can be found at http://www.longbeachmortgage.com.

Traditional financial reporting does not provide an adequate picture of a real estate company's value, according to a PricewaterhouseCoopers survey of RE executives, investors, and analysts.Nine out of 10 real estate executives surveyed don't think their company's stock price reflects its intrinsic value, while investors and analysts are critical of the companies' reporting practices, PWC said. Forward-looking real estate companies "are abandoning the discredited practices of the past: no more starting with a number and working backwards, no more hiding behind the intricacies of [generally accepted accounting principles], and no more burying important information where investors are less likely to notice it," said Tom Kirtland of PWC ValueReporting. PWC said the survey suggests that investors take a broader view than RE executives about which measures accurately reflect value, pointing to 18 of 30 potential value indicators identified by the survey as important to them. In contrast, real estate executives labeled only seven of the measures as important. The survey is titled "Firm Foundations: Building Public Trust in the Real Estate Sector." PricewaterhouseCoopers can be found on the Web at http://www.pwcglobal.com.

Gary Leonard will retire as executive vice president-treasurer and chief financial officer of United Guaranty Corp. on June 30 after more than 30 years with the Greensboro, N.C.-based mortgage insurance company.UGC said its board has elected Hal G. "Tripp" Waddell III to succeed Mr. Leonard, and Gloria Beissinger will be promoted from vice president for financial planning and analysis to succeed Mr. Waddell as senior vice president and chief information officer. The board also elected Steve Clarke as senior vice president and controller, Sandra Mayfield as vice president for financial planning and analysis, and Tony Skipper as vice president and chief e-business officer, the company said. UGC can be found online at http://www.ugcorp.com.

Ann Ashburn has been named chief executive officer of The AmeriDream Charity Inc., a Gaithersburg, Md.-based downpayment gift provider, and Robert "Josh" Tolford has been named president.Ms. Ashburn was previously chief operating officer of the charity, and Mr. Tolford was chief financial officer. They replace AmeriDream founders Christopher Russell and Ryan Hill, respectively. "The promotions of Ashburn and Tolford recognize their significant roles in taking the fledgling nonprofit that the founders began in a basement four years ago, and building it into an efficiently run organization with a staff of 70 that has already helped more than 90,000 low- and moderate-income families buy their own homes," AmeriDream said. The charity can be found on the Web at http://www.ameridreamcharity.org.

The board of trustees of Prime Group Realty Trust, Chicago, has approved the engagement of Merrill Lynch & Co. as its financial adviser to assist in evaluating the company's strategic alternatives, including a sale or a merger.Prime Group is a real estate investment trust specializing in office and industrial real estate, mainly in the Chicago area. It can be found on the Internet at http://www.pgrt.com.

Weingarten Realty Investors and AEW Capital Management, on behalf of a pension fund client, have formed a joint venture to acquire up to $238 million in commercial real estate assets.The joint venture, which will use limited debt, is targeting supermarket-anchored shopping centers in the southern United States. Weingarten, a Houston-based retail real estate investment trust, said it will look after the operations of the properties and the acquisition process. Drew Alexander, the REIT's president and chief executive officer, said the alliance with AEW would help "further diversify Weingarten's capital resources." The REIT can be found on the Web at http://www.weingarten.com.

The Detroit City Council passed an anti-predatory-lending ordinance Dec. 19 by a vote of 7-to-1.The ordinance, provided to MortgageWire by the Detroit branch of the National Association for the Advancement of Colored People, establishes definitions for what would constitute predatory practices applying to all home loans originated in the city, and sets criteria for what would be designated as “threshold home loans.” Lenders defined as predatory under the ordinance would not be allowed to do business with the city. Fines for violators and a “private right of action” clause giving borrowers the right to sue violators are also stipulated in the ordinance.

John D. Gellhausen has been appointed executive vice president of National City Corp., Cleveland.Mr. Gellhausen was recently named head of the company's National Consumer Finance business, which services, sells, and originates conforming mortgages and originates and services nonconforming mortgages. (The business includes National City Mortgage Co., First Franklin Financial Corp., National City Home Loan Services, and National Home Equity.) Mr. Gellhausen was previously president and chief operating officer of National City Mortgage, and senior vice president and corporate comptroller for National City Corp. The company can be found on the Internet at http://www.nationalcity.com.