Originations

Market conditions have conspired to alter a deal between PacificAmerica Money Centers, Inc., Woodland Hills, Calif., and its potential acquirer, Fremont General Corporation.A new deal being structured now calls for a cash acquisition price that will be subject to change based on PAMM's ability to sell its I/O strip for a high enough price and its ability to maintain target loan sale prices over the next two years. If the I/O strip sells for a mutually agreed upon amount, PAMM shareholders will receive $6 per share for the company. Shareholders have the right to receive a total of up to an additional $4 per share, subject to achievement of certain target loan sale prices. General terms of the target loan sale price have been discussed but not all of the details have been fixed. The parties will work to finalize the terms and close the deal by the end of 1998. The transaction is still subject to completion of satisfactory due diligence, negotiation of a definitive agreement, receipt of a fairness opinion, receipt of a majority of PAMM stockholders and regulatory approval.

TriNet Corporate Realty Trust, San Francisco, has identified a number of assets in its portfolio it plans to dispose of in order to reduce leverage ratios and free up cash for future high-yielding acquisitions."In order to take advantage of generally favorable conditions for property sales, we have determined it is time to harvest the value from a selection of TriNet's assets which have appreciated in value and also to prune away non-core assets to mitigate exposure to certain tenant, market, or lease expiration risks," said chairman and CEO Robert W. Holman. In a move to reduce the company's budgeted general and administrative and property operating expenses, the company has reduced its acquisition volume, cut acquisition staff by 47%, and reduced staff in other departments by approximately 8.6%. The company hopes to reduce costs by 19%, or $0.13 per share, in 1999. TriNet invests primarily in corporate office and industrial properties. TriNet's website address is http://www.tricorp.com.

Federal Reserve Board governor Laurence Meyer told private economists this morning that he believes the domestic economy, including housing starts, will slow in 1999 "in response to weaker foreign growth, the recent decline in equity values, and the widening of risk spreads" in the bond market.The Fed governor noted that mortgage rates have benefited from the decline in U.S. Treasury rates and refinancing activity could cushion a slowdown by giving consumers more discretionary income. "That could help, " Gov. Meyer told the National Association of Business Economists. But he told reporters afterward that some refinancing opportunities "have been exhausted. That is part of the problem." The NABE's economic forecast survey (taken in early September) found that housing construction may have peaked and there will be a slight decline in 1999 production. The NABE survey also shows that economists believe the Fed will cut interest rates to maintain a 2.2% growth rate in 1999. Gov. Meyer told the NABE meeting that the Fed has moved toward easing monetary policy, but the Fed will not cut interest rates aggressively until it sees concrete evidence of a slowdown in the U.S. economy. Meanwhile a survey of top economists by Macroeconomics Advisers, St. Louis, taken on Friday (Oct. 2) found respondents expect the Fed will cut interest rates by 100 basis points over the next 12 months.

The average 30-year fixed mortgage rate has continued its record-breaking decline, falling to 6.60% for the week ending Oct. 2, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate fell to 6.27% from 6.32%, and the average rate for one-year Treasury-indexed adjustable-rate mortgages declined to 5.39% from 5.42%. Robert Van Order, Freddie Mac's chief economist, said long-term mortgage rates are "probably the lowest since 1968." (Freddie Mac's survey began in 1971.) Mr. Van Order said he expected rates to fall further, with the 30-year rate possibly hitting 6.5% or less within a week. Freddie Mac's website address is http://www.freddiemac.com.

Due to an increase in demand from mortgage bankers seeking to secure flow commitments, mortgage-backed securities and mortgage finance broker/dealer Links Securities Inc. has announced the expansion of its whole loan group.The New York-based company recently hired former Credit Suisse First Boston vice president Patrick M. McGrath as a managing director responsible for whole loan investment banking and warehouse financing. It has also hired former pipeline hedging consultant Art Yeend as a member of the company's West Coast origination sales team. Mr. Yeend was previously director of risk management for Tuttle & Co., Mill Valley, Calif.

Norwest Mortgage Inc., Des Moines, Iowa, has launched a program to increase renovation loan production nationwide and promoted Desmond P. Smith to vice president-national renovation manager to head the consumer lending sales team.Norwest now offers FHA 203(k) and Fannie Mae HomeStyle loan programs, which allow borrowers to buy or refinance a home and receive additional funds to repair or renovate the property with a single loan, the company said. "With downpayments as low as 3%, homebuyers are missing out on a great opportunity to make a property what they want from the beginning," Mr. Smith said. "These programs save homebuyers from using high-interest credit cards and high-interest construction or subprime loans to finance home renovations." Norwest said Mr. Smith will focus on increasing 203(k) and HomeStyle loan volume through the company's retail sales force and will oversee divisional and regional efforts related to renovation loan operations.

Southern Pacific Funding Corp., Lake Oswego, Ore., has obtained a temporary restraining order in a lawsuit filed Wednesday against Wilshire Real Estate Partnership, SPFC has announced.SPFC also said it is engaged in discussions with its warehouse lenders with regard to notices of default involving certain loan covenants. The warehouse lines of credit, which total $1.3 billion, are used by SPFC to fund loan originations and purchases. The litigation results from claims that SPFC is in default with respect to a $40 million loan recently made by Wilshire that is secured by assets with a market value substantially in excess of the loan amount, SPFC said. The temporary restraining order enjoins Wilshire from selling the loan collateral without complying with requirements of the Uniform Commercial Code.

FirstPlus Financial Group Inc., Dallas, has announced that it "remains strongly engaged in finding a suitable strategic partner" and that discussions with more than one party are under way.The announcement came after a selloff of FirstPlus shares Monday and Tuesday morning in the wake of a report in National Mortgage News that General Electric Capital Corp., Stamford, Conn., had considered but decided against buying FirstPlus, the nation's largest high-LTV originator/servicer. "There has been much speculation about our efforts, but we have made significant progress and we hope to resolve the matter in the next few weeks," said Daniel T. Phillips, chairman and chief executive officer of FirstPlus. Mr. Phillips said the company is attractive to prospective buyers because of its retail capability. "In the consolidating financial services industry, companies are looking for this platform as a way to sell products and cross-sell their own," he said.

The index on which adjustments in the conforming loan limit are based dropped sharply in August, ending a string of almost steady increases since the last modification.The decline in the index of the average price of homes sold -- from $177,100 in July to $172,600 in August -- is being taken by at least one observer as a sign that the housing market has peaked. "I'm not surprised to see some pullback," said Fred Flick, an economist at the National Association of Realtors. Noting that 1997 has been a record year for existing home sales and an "extremely strong" one for price appreciation, Mr. Flick said it is only a matter of time before sales slow and prices begin to drop back. The index, maintained by the Federal Housing Finance Board, is used to calculate the ceiling on single-family loans that can be purchased by Fannie Mae and Freddie Mac. The current ceiling of $227,150 was based on a 5.8% increase in the index between October 1996 and October 1997. It represents a $12,550 increase over the 1997 maximum. Changes in the limit become effective on Jan. 1 of the following year. The average for this October will be announced in late November.

New home sales fell 4% in August to their lowest level in five months, according to data released Wednesday by the U.S. Commerce Department.Government data show that new homes sold at a seasonally adjusted annual rate of 838,000 in August, compared with a revised 877,000 in July. This is the second consecutive monthly decline for new home sales and the lowest rate since March, when it stood at 836,000. Year over year, new home sales are up 5%. Paul Taylor, senior economist at America's Community Bankers, said new home sales could rebound in the coming months. "However, I think we may have peaked for the year in June when the rate was at 922,000." The median sales price of a new home was $151,000 in August, up from $144,000 a year ago. The Commerce Department said the nation's supply of new homes currently stands at 289,000, representing a 4.2-month supply.

Western Financial Bank, Irvine, Calif., has signed a letter of intent to sell substantially all its mortgage servicing rights, which will result in an after-tax writedown of approximately $2.3 million and contribute to a previously announced third-quarter loss, according to Westcorp, the bank's parent.The sale is pending the negotiation of a definitive agreement and related approvals. Western Financial will continue to originate prime and subprime mortgages for sale through established secondary market sources, Westcorp said. Westcorp's website address is http://www.westernfinancial.com.

Redwood Trust Inc., Mill Valley, Calif., has announced the formation of Redwood Residential Funding Inc. and Redwood Commercial Funding Inc., both wholly owned subsidiaries of Redwood Trust affiliate RWT Holdings Inc. Redwood Residential will set up correspondent loan purchase operations in Marin County, Calif., and will acquire high-quality, jumbo, fixed- and adjustable-rate single-family loans from a network of 200 lenders nationally, Redwood Trust said.Graham Williams, most recently senior vice president for production and risk management at General Electric Capital Mortgage Corp., has been named president of Redwood Residential. Redwood Commercial, Reno, Nev., will originate and service commercial mortgage loans ranging from $500,000 to $5 million. Richard J. C. Taylor, most recently senior vice president of The Money Store's income property division, has been named president of Redwood Commercial. The loans from both Redwood Residential and Redwood Commercial will be aggregated and sold as securities or whole loans to investors and to the Redwood Trust portfolio. Redwood Trust is a real estate investment trust. Its website address is http://www.redwoodtrust.com.

Harold D. Marshall, president and chief operating officer of Associates First Capital Corp., Irving, Texas, will retire early next year, the company has announced.Keith W. Hughes, Associates' chairman and chief executive officer, said that instead of naming a replacement the company will promote its operating business heads to senior executive vice presidents, who will report directly to Mr. Hughes. They are: David A. Brooks, 58, insurance operations; Wilfred Y. Horie, 52, international operations; Lawrence J. Pelka, 56, commercial operations; Joseph N. Scarpinato, 53, credit card operations; and Thomas R. Slone, 56, consumer operations. Mr. Hughes said the retiring Mr. Marshall, 62, "culminates an illustrious 38-year career at The Associates, where his legacy will remain the strength of the management team he has led and developed."

The AFS Title Search Index rose 2.1% to 267.8 for the week ended Sept. 25, its highest level of the year, according to Bridge/Telerate Advance Factor Service.The index averaged 244.9 over the previous four weeks, up 14.8 points from the prior week's four-week moving average. A year ago, the index stood at 160.0, 59.8% of the current level. "The AFSTSX has surged some 30% from its low of 206.1 the week ending Aug. 21," said AFS manager Paul Descloux. "This portends that 1998's refinance plateau will continue in all likelihood through the end of the year, with prepay speeds for 7.0s, the largest coupon by volume in the mortgage universe, rising towards [those of] 7.5s." Mr. Descloux's e-mail address is paul.descloux@cor.dowjones.com.

The share price of FirstPlus Financial, Dallas, fell almost 15% Tuesday morning after a 34% decline on Monday.The Monday selloff was sparked, in part, by a report in National Mortgage News that General Electric Capital Corp., Stamford, Conn., had looked at and passed on buying FirstPlus, the nation's largest high-LTV originator/servicer. At noon Tuesday FirstPlus (symbol: FP) was trading at $12.89, down $2.18, and down 79% from its 52-week high. A FirstPlus spokesman declined to comment about its share price or potential bidders. After it became known that GECC was no longer interested in FP, Merrill Lynch downgraded FirstPlus to "neutral." It is well known that GECC looks at many potential acquisitions and often passes. Most recently it looked at United Companies, Baton Rogue, another publicly traded subprime lender, and passed on that acquisition as well, sources said. The steep decline in FirstPlus's share price has decimated investors in the company.

Delta Funding, Woodbury, New York, has sold $475 million of closed-end home equity loan-backed securities priced in seven parts by underwriters led by Lehman Brothers Inc. and co-managed by Donaldson, Lufkin & Jenrette Securities Corporation and by Bear, Stearns & Co. Inc. The deal was structured using a 100% surety wrap credit enhancement by MBIA Insurance Corporation.Delta originates home equity loans primarily in 22 states through a network of approximately 1,150 brokers and correspondents as well as through 15 Fidelity Mortgage retail offices in nine states.

Transnational Financial Corporation, San Francisco, has appointed Mike Lawson chief compliance officer responsible for reviewing and implementing compliance, regulatory and quality control procedures for the wholesale and retail mortgage banker.Mr. Lawson has 12 years experience in the mortgage banking industry. His most recent position was chief operating officer and senior vice president of Golden West Funding, Inc. The company also announced the opening of a new office in Tustin, California for its wholesale operations.

HomeSide Lending, Inc., Jacksonville, Florida, has appointed Jere N. York first vice president - equity services group national production manager.In his new position, Mr. York will be responsible for developing a national nonconforming production program designed to help conforming mortgage lenders learn how to enter or expand in the nonconforming, subprime mortgage market. Mr. York comes to HomeSide from EquiCredit Corporation where he was senior vice president, manager of the financial institutions division. HomeSide lending is a subsidiary of National Australia Bank. Additional information is available on the company's website: http://www.homeloan.com.

Washington Mutual, a leading provider of banking and mortgage lending services in California, has announced a grant of $294,000 to Habitat for Humanity-Los Angeles - the largest corporate grant ever to a Habitat project in the state.The grant supports the building of four new homes in Habitat's 96th Street Project, located near the intersection of Central Avenue and Century Boulevard in Watts. Over 70 Washington Mutual employees volunteered to help erect the walls on the four new structures.

GetSmart.com (http://www.getsmart.com), a company specializing in providing consumer and business lending services to the online community, has announced that it processed a record 50,000 loan applications during the month of August from more than a million visitors to its website.Both levels represent new highs for the loan marketplace, which launched in late 1996. GetSmart's marketplace includes home loans, credit cards, debt consolidation products, auto loans and leases, student loans and small business financing. The site includes loan offerings from more than 100 lenders.