Originations

Freddie Mac has unveiled a bilingual credit education program aimed at teaching Hispanics how to manage money, use credit, and become homeowners.At a news conference in Washington, Freddie Mac chairman Leland Brendsel said CreditSmart Espanol is one of his company’s initiatives to increase minority homeownership. "This is an opportunity to work with organizations that know the Hispanic community," Mr. Brendsel said. "And I think this really is a quality program that will help make a difference." Freddie Mac is providing $2 million over two years to seven Hispanic groups, such as the Hispanic Association of Colleges and Universities, to bring CreditSmart Espanol into the classroom. "Credit Espanol is a resourceful bilingual tool that will empower Hispanics throughout the U.S. to take charge of their financial lives and build better futures for themselves and their families," said Rep. Silvestre Reyes, D-Texas, who chairs the Congressional Hispanic Caucus. Freddie Mac can be found online at http://www.freddiemac.com.

Countrywide Financial Corp., Calabasas, Calif., has reported that its average daily fundings grew 7% in November to a record $1.6 billion, while daily applications averaged a record $2.2 billion.In addition, the mortgage pipeline rose 6% to a record $55 billion. Stanford L. Kurland, Countrywide's chief operating officer, said the broker division achieved a new milestone in November as the company's business-to-business e-commerce site, Countrywide Wholesale Business Channel, topped $100 billion in fundings originated since its inception. Mr. Kurland also pointed to the $14 billion increase in Countrywide's servicing portfolio to $435 billion as testimony to the success of the company's macro-hedge business model. "The servicing portfolio grew by $104 billion over last year," he said. "It is notable that this portfolio growth was attained in the midst of one of the most challenging prepayment environments in the history of our industry." Countrywide can be found online at http://www.countrywide.com.

Boston Properties has announced an offering of approximately $500 million worth of senior unsecured notes that it expects to complete by year-end.The Boston-based office and industrial real estate investment trust said it intends to use the proceeds from the offering to repay part of a bridge loan it used to finance its acquisition of 399 Park Avenue in Midtown Manhattan earlier this year. The REIT paid a little over $1 billion for that property, which was acquired from Citigroup. The notes will be offered only to "qualified institutional buyers" and to certain foreign institutional investors, the REIT said.

Jeff Coury has been named chief executive officer of Service Link, a residential mortgage settlement service provider based in Aliquippa, Pa.Mr. Coury, a partner in the Pittsburgh-based Coury Consulting LP, had been a consultant to Service Link since its inception in 1997, the company said.

Classes K-WS and L-WS of COMM 2000-FL3’s commercial mortgage pass-through certificates have been placed on Rating Watch Negative by Fitch Ratings.In addition, the ratings on 24 other classes in the deal were affirmed. "Fitch is concerned about the concentration of retail and office property types in the transaction," the rating agency said. "Fitch resized each loan based on current Fitch adjusted cash flow and on original sizing hurdles, with credit given for the pooling benefits of the A notes." The resulting levels were not adequate for classes K-WS and L-WS, which will remain on watch "until the expenses and occupancy levels of the Trump Building stabilize to the levels prior to 2001," Fitch said.

First Union Real Estate Equity and Mortgage Investments, New York, has reported that a preliminary injunction barring its proposed merger with Gotham Golf Corp. has been extended indefinitely.An order by the New York Supreme Court for New York County directed the parties to the lawsuit to attend a preliminary conference for the purpose of scheduling discovery. The court action resulted from a motion by George Kimeldorf -- whom the company termed "a purported holder" of First Union preferred stock -- in connection with his April 2002 lawsuit seeking certification of the suit as a class action. First Union, a stapled-stock real estate investment trust, and Gotham intend to appeal the latest ruling, First Union said.

Fannie Mae and the American Finance House LARIBA, Pasadena, Calif., have announced a commitment by Fannie Mae to invest $10 million in home financing contracts that are acceptable under Islamic law in order to enable more American Muslim families to buy homes.LARIBA has developed a housing finance model incorporating an agreement between itself and the prospective homeowner that sets jointly negotiated maximum monthly payments based on the property's sale price and fair rental value, thereby marking the property to the market. The model, available in 29 states, is based on the actual market rent of a similar property in the neighborhood. "Many American Muslim families have stayed out of the housing market for years because they are not allowed by Islamic law to pay, receive, or be charged interest," LARIBA founder Yahia Abdul-Rahman said. Freddie Mac announced a $1 million investment in such home financing contracts in March 2001. Fannie Mae's website address is http://www.fanniemae.com, and LARIBA's is http://www.lariba.com.

Martin F. Leibowitz, vice chairman and chief investment officer of TIAA-CREF, has been elected to the board of directors of Freddie Mac.Before joining TIAA-CREF in 1995, Mr. Leibowitz was employed by Salomon Brothers for 26 years. His last position there was managing director and director of research. TIAA-CREF is an investor in equity and fixed-income securities, including Freddie Mac's. The government-sponsored enterprise also reported the resignation from the board of James F. Montgomery, one of Freddie Mac's original board members. Freddie Mac can be found on the Web at http://www.freddiemac.com.

Eight classes of the Morgan Stanley Dean Witter Owner Trust 2000-F1 franchise loan deal have been downgraded by Fitch Ratings and will remain on Rating Watch Negative.The downgrades were as follows: class X and S participating interests, from AAA to AA; class B, from AA to A-plus; class C, from A to BBB-plus; class D, from A-minus to BBB; class E, from BBB to BB-minus; class F, from BBB-minus to B-plus; and class G, from BB to B-minus. The rating agency attributed the downgrades to defaults of three borrowers totaling $20.7 million. As of the October reporting date, the transaction had incurred cumulative defaults of approximately $44.2 million, nearly 19% of the original principal balance, Fitch said. The pool consists of collateral from the Franchise Finance Co. of America (now known as GE Capital Franchise Finance) and Morgan Stanley Dean Witter Mortgage Capital, a now-inactive MSDW conduit.

Colonial Realty LP, the operating partnership of Colonial Properties Trust, Birmingham, Ala., has closed a $320 million unsecured revolving line of credit.The three-year credit line, which has a one-year extension option, replaces the company's $300 million revolving credit facility. The interest rate is based on a spread over the London interbank offered rate calculated from a pricing grid based on the company's unsecured debt ratings, Colonial Properties said. The bank lending group was led by SouthTrust Bank. Colonial Properties, a real estate investment trust that owns multifamily, office, and retail properties in the South and in Texas, can be found on the Web at http://www.colonialprop.com.

The fact that borrowers have been willing to refinance heavily this year even though it reduces the amount of mortgage interest they can deduct suggests that consumers have become more interested in economic incentives than tax incentives, according to Brinker Capital.Chuck Widger, president and chief executive of Brinker, told listeners in a teleconference Dec. 4 that this could diminish somewhat the impact of tax policy as a "wild card" factor influencing the financial markets next year. In addition, Brinker's chief investment strategist, Barker French, forecast a slight, gradual slowdown in housing and more stable interest rates, but said these were unlikely to lead to "major" changes in the financial environment. The teleconference focused on what 2003 holds for the markets and the overall economy. Brinker can be found on the Web at http://www.brinkercapital.com.

Simon Property Group Inc., Indianapolis, has announced the commencement of a cash tender offer to acquire all the outstanding shares of Taubman Centers Inc., Bloomfield, Mich., at $18 per share and has filed suit against Taubman and its board of directors in federal district court.Taubman, which rejected an earlier Simon offer to acquire it for $17.50 per share, said the latest offer will be evaluated by its board, and shareholders will be advised of the board's view within 10 business days. Simon said $18 per share represents a premium of approximately 35% to the price of Taubman shares at the time of Simon's first acquisition proposal and is higher than the shares have ever traded. The newly filed lawsuit maintains, among other things, that Taubman's board is breaching its fiduciary duty by not giving "adequate consideration" to Simon's original offer and by accepting "the Taubman family's claimed veto power over the offer." The two real estate investment trusts traded insults after the previous Simon offer, with Simon contending that certain preferred shares were improperly obtained by the Taubman family in 1998 without a shareholder vote, and Taubman replying with a denial and an assertion that Simon had made "numerous and repeated misleading statements" about Taubman's 1998 restructuring. The REITs can be found online at http://www.taubman.com and http://www.simon.com.

Recently passed federal terrorism insurance legislation will be beneficial to the commercial real estate industry, according to panelists at a mezzanine loan forum organized by the Information Management Network.Drew Fung, a principal with Lend Lease Real Estate Investors, said the legislation is "a big plus" and that many deals that were "hamstrung" due to a lack of terrorism insurance will now start moving forward. "High-profile assets are in a much better place now," he said. Mr. Fung believes, however, that insurance costs will still be significant until new entrants get into the market. David Mahoney, a Merrill Lynch director, predicted that "one thing we will see in 2003 is large, single-asset deals that were put off this year." Ed Shugrue III, chief financial officer at Capital Trust, noted that the mezzanine lending market is getting larger. About $1.3 trillion in commercial mortgage debt is outstanding, and when most mortgage loans come due, there is "tremendous demand" for mezzanine loans, Mr. Shugrue said. Moreover, the many loans that were made in the period 1995-2000 will be coming due in the next two to three years, he said. Mr. Mahoney estimated that about $20 billion worth of mezzanine lending opportunities will be generated next year.

The average 30-year fixed mortgage rate rose to 6.19% for the week ending Dec. 6 from 6.13% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate rose from 5.57% to 5.60%, while the average rate for one-year Treasury-indexed adjustable-rate mortgages increased from 4.19% to 4.21%. Fees and points averaged 0.6 points for 15-year fixed-rate mortgages and 0.5 points for ARMs and 30-year FRMs. "Consumer spending has kept the economy moving, and when initial holiday sales were better than expected, financial markets reacted with enthusiasm," said Frank Nothaft, Freddie Mac's chief economist. "It was this potential pick-up in the economy that caused interest rates, including mortgage rates, to drift upwards this week." A year ago, the average 30-year and 15-year fixed rates were 6.84% and 6.30%, respectively, and the average one-year ARM rate was 5.21%, Freddie Mac said. Freddie Mac can be found on the Web at http://www.freddiemac.com.

Conseco Inc., Carmel, Ind., has filed a statement with the Securities and Exchange Commission indicating that a bankruptcy filing is being considered for its St. Paul, Minn.-based Conseco Finance unit.When the company entered its current phase of operations in August, its former chief executive, Gary Wendt, said the problems were at the holding company level and not at its operating units. But the latest filing contradicts that. In the form 8-K filing made on Dec. 3, Conseco Finance announced that it did not make $4.7 million in guarantee payments on Dec. 2 related to manufactured housing securitization trusts. The company went on to state that Conseco Finance "presently intends to suspend all such guarantee payments relating to manufactured housing trusts until there is resolution to the restructuring of its manufactured housing business." The filing also said that "without additional liquidity in the near future, Conseco Finance will be unable to make those guarantee payments when they are required to be made." As a result of the announcement, Fitch Ratings cut its senior debt rating on Conseco Finance from CC to D, which stands for default. Conseco can be found on the Internet at http://www.conseco.com.

M.D.C. Holdings Inc., Denver, has completed the issuance and sale of $150 million (in principal amount) of 7% senior notes due Dec. 1, 2012.MDC said the proceeds have been used for general corporate purposes and to repay outstanding debt under its homebuilding line of credit. MDC's subsidiaries build homes under the name Richmond American Homes, and MDC also has a mortgage financing subsidiary, HomeAmerican Mortgage Corp. Richmond American can be found online at http://www.richmondamerican.com.

Chicago Mayor Richard M. Daley has announced a $12.5 million community lending alliance between Bank One and Fannie Mae that will provide affordable mortgage financing for low- to moderate-income minority, disabled, immigrant, and woman-headed households in the Chicago area.Fannie Mae will purchase eligible loans on single-family and multifamily homes or other financing to be used in community development initiatives such as inner-city rehabilitation projects. To facilitate the process, Bank One will offer a series of products that require little or no downpayment funds, eliminate mortgage insurance costs, and apply flexible credit quality ratings. The bank pledged to earmark about 25% of the $12.5 million fund to minority families. In addition, the bank will cooperate with Fannie Mae to develop new downpayment assistance strategies and actively engage in homeownership education efforts through nonprofit counseling organizations, initially in Chicago, and later in Detroit, Phoenix, and other markets. The companies can be found on the Web at http://www.bankone.com and http://www.fanniemae.com.

Three classes of MeriStar Commercial Mortgage Trust commercial mortgage pass-through certificates, series 1999-C1, have been downgraded by Moody's Investors Service.The downgrades were as follows: class B, from Aa2 to Aa3; class C, from A2 to Baa1; and class D, from Baa2 to Ba1. Moody's also affirmed the ratings of three other classes in the deal. The certificates represent beneficial ownership in a trust fund whose principal asset is a mortgage loan secured by 19 hotel properties in 10 states. As of the Nov. 5 distribution date, the transaction's principal balance has decreased by 4.5%, from $330.0 million to $315.1 million, as a result of amortization, the rating agency said. The hotels are owned by entities associated with MeriStar Hospitality Corp., whose senior debt is rated B1 by Moody's and is on Rating Watch Negative. Moody's can be found online at http://www.moodys.com.

Investors and analysts tend to lump The Radian Group Inc., Philadelphia, into the mortgage insurance sector, but its chairman and chief executive officer disagrees with that assessment.Speaking at the Friedman Billings Ramsey annual investor conference in New York, Frank Filipps said Radian's nonmortgage insurance businesses represent over 30% of the company's earnings, and the percentage is growing. Of the $93 billion of total risk in force at Radian, $28 billion is from mortgage insurance and $65 billion is in financial guaranty, showing that Radian is not simply a mortgage insurer, he said. Mr. Filipps also spoke about the company's title insurance alternative, Radian Lien Protection. Title insurers were "so threatened by the mere introduction" of RLP that they have fought to keep it away from consumers, he said. RLP is now off the market because of a regulatory order in California, but Mr. Filipps said he expects insurance regulators there to make a decision shortly to permit RLP and, if so, it will be reintroduced. RLP is "the better product for the lender," he said. "It is faster, cheaper, and they want it." Radian can be found online at http://www.radianmi.com.

Low rates didn't hurt Golden West Financial Corp.'s adjustable-rate mortgage lending strategy in the third quarter, when 93% of the company's production consisted of ARMs.Russell Kettell, president of the Oakland, Calif.-based Golden West, told investors at a Friedman Billings Ramsey conference in New York that "ARMs are a better deal" for many borrowers because, historically, ARM borrowers have paid less over the long haul than consumers with a fixed-rate loan.