Originations

Fidelity National Financial Inc., Irvine, Calif., has agreed to purchase the shares it does not own of ANFI Inc., an Orange, Calif.-based regional title underwriter that until recently was known as American National Financial Inc.Each share of ANFI will be exchanged for 0.4540 shares of Fidelity. Based on Fidelity's Dec. 16 closing price of $32.86 per share, each share of ANFI is worth $14.92, an 11% premium. Fidelity currently owns 28% of ANFI. After the deal is completed, ANFI will be merged into Fidelity's Ticor Title unit. ANFI has title operations in California, Arizona, and Nevada. For the first nine months of this year, it had revenues of $139 million and net income of $16 million. Robert Napoli, senior research analyst with U.S. Bancorp Piper Jaffray, has raised his 2002 earnings per share estimate from $5.06 to $5.21, in addition to increasing the 2003 EPS estimate from $3.40 to $3.65. His primary reason for the increase was a continued strong mortgage origination market, which is not expected to slow until the end of the first quarter of 2003.

Meanwhile, Taubman Centers Inc. has filed a motion in federal court to dismiss a claim by Simon Property Group that would strip Taubman's preferred shareholders of voting rights and clear the way for a hostile takeover.Simon maintains that the Taubman family's receipt of original-issue shares of series B preferred stock in 1998 was a "control share acquisition" under Michigan state law and that the U.S. District Court for the Eastern District of Michigan should strip them of their voting rights. Taubman termed this allegation "frivolous and dangerously misleading." The state law, the Control Share Acquisitions Act, "was designed to discourage opportunistic raiders like Simon, not to facilitate their hostile bids," Taubman said. "That the act did not apply to the issuance of the series B shares is clear on its face and from all persuasive legal precedent and commentary." Taubman, a real estate investment trust specializing in shopping centers, can be found online at http://www.taubman.com.

Simon Property Group Inc., Indianapolis, has filed a preliminary proxy statement with the Securities and Exchange Commission to enable Simon to solicit proxies from shareholders of Taubman Centers Inc. to call a special shareholders' meeting in pursuit of a hostile takeover bid.Simon said it would seek shareholders' support for its cash tender offer of $18 per share of Taubman stock, in part through a proposal to amend the Taubman charter. The amendment would remove a provision under which the purchase of Taubman shares in connection with Simon's tender offer would trigger the Excess Share Provision. "We are taking the necessary steps to restore the right of Taubman's public shareholders -- who own 99% of the company -- to decide for themselves whether to accept our premium, all-cash offer," said David Simon, chief executive officer of Simon Property Group. "We call on the independent Taubman board members to fulfill their fiduciary obligations and remove the family-imposed impediments to shareholder democracy." In reply to the proxy filing, the Bloomfield, Mich.-based Taubman said Simon "is waging a campaign to nowhere while wasting valuable corporate assets of both companies." Simon, a real estate investment trust, can be found online at http://www.simon.com.

HSBC's $14 billion pending acquisition of subprime giant Household International, Prospects Heights, Ill., has cleared two more hurdles.The Justice Department said Tuesday that it had ended its investigation into the deal without taking any action, which means the federal government found no antitrust problems with the foreign bank (HSBC) buying the U.S. lender. In addition, on Monday all 50 states plus the District of Columbia ratified Household's record $484 million predatory lending settlement. A statement released by regulators in Washington state called the settlement "the largest direct restitution amount ever in a state or federal consumer case." At midday Tuesday, Household's shares were trading down slightly, at $28.44. There has been speculation among some investment bankers that the deal might be in trouble (see the Dec. 16 issue of National Mortgage News). Even though the sale appears to be moving along, Bear Stearns downgraded Household on Monday to "peer perform" from "outperform."

Single-family housing starts edged up by nearly 1% in November as builders continue see strong demand for new homes.The U.S. Commerce Department reported that single-family starts rose from a seasonally adjusted annual rate of 1.38 million in October to 1.39 million in November. (The department revised the October number upward from 1.35 million.) National Association of Home Builders economists project that single-family starts will end the year at 1.35 million units and that starts will decline by only 3% next year. Meanwhile, the Commerce Department reported that multifamily starts rose 12% to 278,00 units in November. The Commerce Department can be found online at http://www.doc.gov.

RBC Capital Markets has initiated coverage of 21 real estate investment trusts and has rated PS Business Parks as a Top Pick.RBC equity analysts David Copp and Jay Leupp have set a 12-month price target of $35 for the stock. Most of the other newly covered REIT stocks received a Sector Perform rating, but five received an Outperform rating: Bedford Property Investors; Municipal Mortgage and Equity; The Rouse Co.; Simon Property Group; and Sunrise Assisted Living. Two REIT stocks -- Manufactured Home Communities and Sovran Self Storage -- received Underperform ratings. RBC Capital, the global brand name for the corporate and investment banking divisions of Royal Bank of Canada, can be found on the Web at http://www.rbccm.com.

Pan Pacific Retail Properties, Vista, Calif., has announced the sale of $100 million of 6.125% senior notes due Jan. 15, 2013.The net proceeds will be used to repay a portion of Pan Pacific's borrowings under its $300 million unsecured revolving credit facility, the real estate investment trust said. The book-running manager of the transaction was Banc of America Securities LLC, and Wachovia Securities Inc. was the senior co-manager. The equity REIT can be found online at http://www.pprp.com.

Two classes of Host Marriott Pool Trust commercial mortgage pass-through certificates, series 1999-HMT, have been downgraded by Moody's Investors Service.Class F was downgraded from Baa2 to Baa3, and class G was downgraded from Baa3 to Ba1, Moody's said. Five other classes in the deal were affirmed. The certificates represent beneficial interests in a trust fund whose principal asset is a mortgage loan secured by eight hotels in six states, including the New York Marriott Marquis in Manhattan, which represents 40.9% of the pool balance. As of the Dec. 4 distribution date, the transaction's principal balance had decreased by 8.2% to $610.4 million as a result of amortization on a 20-year schedule, the rating agency said. Under a cash-trapping provision of the loan, all excess cash flow is trapped and held by the servicer in the event that "base profit" falls below $96.0 million. The provision is now in effect, and $7.4 million is being held as additional cash collateral, Moody's said. The rating agency expressed concern about "the relatively low debt service coverage of 1.26x" for the transaction and said it will "closely monitor" the performance of the hotels.

Mack-Cali Realty Corp., Cranford, N.J., has announced the sale of its investment in ARCap Investors LLC, a joint venture formed to invest in unrated B-pieces of commercial mortgage-backed securities, for approximately $20.2 million."While this investment was a very successful one for Mack-Cali, we decided to redeploy our capital into more strategic direct real estate investments that are consistent with our overall strategy of owning and operating class A office properties in the Northeast," said Mitchell E. Hersh, Mack-Cali's chief executive officer. Mack-Cali, a real estate investment trust, can be found on the Web at http://www.mack-cali.com.

The smaller the town, the greater the chance a commercial mortgage loan will become delinquent, according to Moody's Investors Service.A Moody's study found that commercial mortgages from towns too small to be designated as a metropolitan statistical area have more than five times the likelihood of becoming delinquent as loans from MSAs. Conversely, delinquencies in commercial mortgage-backed securities are generally lowest in larger cities. In fact, the 10 largest cities had a delinquency rate of 0.7% in CMBS transactions, while towns too small for MSA classification had an average delinquency rate of 3.8%. "This pattern prevails across all property types," said Sally Gordon, a Moody's analyst and author of the report. Moody's can be found online at http://www.moodys.com.

Trizec Properties will be assuming ownership of the Sears Tower in January 2003 “with the passage of time,” not as an option, according to Timothy Callahan, president and chief executive officer of the real estate investment trust.In a conference call, Mr. Callahan said he wanted to put to rest market misinformation that the office REIT has the option to assume ownership of the landmark Chicago high-rise next year. The addition of the property to the Chicago-based REIT’s portfolio will add about $750 million of debt to its balance sheet, according to the company. Trizec is still in discussion with insurers about pricing for terrorism insurance on the property, and expects insurers to provide rate quotes by early next year. Mr. Callahan views the recently passed terrorism insurance legislation as a positive factor in negotiating the rates. In response to a question, he said Goldman Sachs and Merrill Lynch, two major tenants at the Sears Tower, are moving out of the property next year. Trizec is projecting funds from operations ranging from $1.72 to $1.82 per share for 2003.

Rick A. Smalldon has been promoted to president and chief operating officer of National City Mortgage Co., Miamisburg, Ohio.Mr. Smalldon was formerly executive vice president of the residential mortgage services unit of National City Corp., the parent holding company of National City Mortgage. The Cleveland-based National City said the unit will be integrated into National City Mortgage early next year. Mr. Smalldon was previously executive vice president and national sales manager at First of America Mortgage Co., whose parent company, First of America Bank Corp., was acquired by National City in 1998. National City can be found on the Web at http://www.nationalcity.com.

Classes B-1 and B-1H of Asset Securitization Corp.'s commercial mortgage pass-through certificates series 1996-MDVI have been downgraded from BB-minus to B by Fitch Ratings.In addition, the ratings on the four other classes of the deal rated by Fitch were affirmed. The rating agency attributed the downgrades to the "continued decline in operating performance of the Horizon II loan" and said the two classes will remain on Rating Watch Negative due to interest shortfalls incurred as a result of a special servicing fee on the Prime Retail II loan. Fitch can be found on the Internet at http://www.fitchratings.com.

An affiliate of Brascan Real Estate Financial Partners LLC, Toronto, has completed due diligence for a previously announced agreement to recapitalize Criimi Mae Inc., according to the Rockville, Md.-based Criimi Mae.Under the terms of the pact, BREF will purchase 10% of the outstanding shares of Criimi Mae's common stock and up to $40 million of subordinated debt to be issued by Criimi Mae, a real estate investment trust. The REIT also reported that Bear, Stearns & Co. Inc. has completed due diligence and signed a commitment letter to provide Criimi Mae with a secured financing of up to $300 million in the form of a repurchase transaction. Criimi Mae's website address is http://www.criimimaeinc.com.

A bill that would pre-empt any laws enacted by Michigan municipalities to regulate the activities of the state’s mortgage industry was passed Dec. 12 by the state senate.Gov. John Engler has indicated that he will sign the bill, which had already been passed by the Michigan House of Representatives, said Anthony Kellum, president of the Michigan Mortgage Brokers Association. “That is good news for us and for consumers,” Mr. Kellum told MortgageWire. The bill also addresses another practice that has become widespread among municipalities -- prohibiting lenders defined as predatory from doing business with them. Municipalities would also be prohibited from collecting information from financial institutions about their loans, applicants, and deposits. The state bill would require financial institutions to comply with all state and federal laws applicable to their businesses.

AMB Property Corp., San Francisco, has announced the renewal of its $500 million unsecured revolving line of credit.The three-year facility includes a multicurrency component under which up to $150 million can be drawn in either British pounds sterling, euros, or yen. AMB, an owner and operator of industrial real estate, can be found online at http://www.amb.com.

BB&T Corp., Winston-Salem, N.C., has donated a $1.1 million grant from the U.S. Treasury to the nonprofit Center for Community Self-Help, which acts as a secondary market for affordable mortgage and small-business loans.The grant, from the Treasury's Community Development Financial Institutions Fund, was awarded to BB&T in recognition of a $10 million low-interest loan it made to the Durham, N.C.-based nonprofit group in June, BB&T said. "[Bank Enterprise Award] grants such as this one are critical to building Self-Help's loan capital base, so we're able to respond quickly to community needs," said Martin Eakes, chief executive officer of the center. BB&T can be found on the Web at http://www.bbandt.com.

Fannie Mae and JPMorgan Chase Bank have agreed to provide $44 million of credit enhancement for tax-exempt bonds issued by the New York City Housing Development Corp. for the development of a 231-unit apartment building in East Harlem.Fannie Mae executives said it was "no small task" to put together such a complex transaction "for the first time in New York." It is a new HDC program for mixed-use, mixed-income rental housing operated in cooperation with the New York City Department of Housing Preservation and Development, which sold the land site to the developer. The department requires that once the property is resold, "the difference between the appraised value and the one-dollar amount will be repaid to New York City." JPMorgan Chase has provided the construction loan enhancement, while Fannie Mae has arranged the long-term credit enhancement. Forty-seven units will be available to low-income households that earn no more than 50% of the area median income (at $31,400), another 63 units are reserved for middle-income households earnings up to 250% of area median income (at $157,000), and the remaining 121 units will be rented at market prices.

Developers will face "intense competition and limited prospects in traditional markets" next year and should look beyond mainstream markets for opportunities, according to the head of the USC Lusk Center for Real Estate.Stan Ross, chairman of the board of the Lusk Center, cited a number of nontraditional markets that he expects to present opportunities for developers in 2003, including public/private partnerships, educational institutions, retirement housing, hospitals, and health care facilities. The range of facilities ripe for public/private partnerships include civic centers, administrative buildings, libraries, airports, stadiums, convention centers, cultural centers, and correctional facilities, he said. "Governments face large budget deficits, and developers who can help them to attract private investment capital for critically needed facilities will have an edge," Mr. Ross declared. The Lusk Center can be found online at http://www.usc.edu/lusk.

Fannie Mae vice chairman Jamie Gorelick has been named to serve on an independent panel investigating the Sept. 11 terrorist attacks on the United States.Ms. Gorelick, a Democratic appointee to the panel, served as deputy attorney general in the Clinton administration. She joined Fannie Mae in 1997 as vice chair. The commission was established in the recently enacted law that created the Department of Homeland Security. A spokeswoman for Fannie Mae confirmed that Ms. Gorelick has been named to the panel, but had no other details by MortgageWire's deadline. All appointments to the panel must be named by Dec. 15.