Originations

Medley Credit Acceptance Corp., a Coral Gables, Fla. company that specializes in accounts receivable financing, equipment leasing, and other types of financing, will purchase Ameritrust Holdings Inc., a Hollywood, Fla.-based mortgage banker.Ameritrust, which does both residential and commercial lending, is negotiating acquisitions in Orlando, Fla. and Cleveland. Under the terms of the agreement, Medley will acquire 80% of Ameritrust in a stock swap. The ratio is 2.75 shares of Ameritrust for one share of Medley. The remaining Ameritrust stock will be acquired at various intervals through June 30, 2000 on an earn-out tied to company profits.

Sales of existing single-family homes rose slightly in May to an annualized rate of 4.82 million units, according to statistics compiled by the National Association of Realtors.[Click here to see the chart.] The increase reflects activity compared with that of the previous month. However, when compared with numbers for the same month a year ago, the resale level is a healthy 15% above the 4.19-million-unit pace recorded in May 1997. The NAR anticipates that sales of existing homes will come in at 4.53 million units this year. The trade group says this year's heavy activity is being fueled by increasing numbers of what it calls "nontraditional" households, including immigrants, singles, and seniors who are "trading down" to smaller living spaces. In May the median price of a home was $130,500, a 6% increase since May 1997. Prices are increasing the fastest in the Western region of the U.S. (a gain of 8.4%) and the slowest in the East (a gain of 2.3%). The NAR's website address is http://nar.realtor.com.

Fannie Mae has announced key executive changes at the company involving three vice presidents and a newly created post.Robert J. Levin, who has been executive vice president for marketing since 1990, has been named executive vice president for housing and community development, a new position. Ann D. Logan, an executive vice president and chief credit officer since 1993, has been appointed executive vice president for single-family mortgage business. Taking over Ms. Logan's post as EVP and chief credit officer will be Adolfo Marzol, who (subject to board approval) will be promoted from his current post of senior vice president for single-family marketing. Fannie Mae said the creation of the new community development post "reflects a commitment by the company to significantly enhance its community lending initiatives." Separate reporting responsibilities for various low-income housing initiatives will be consolidated under Mr. Levin, who will oversee the National Housing Impact Division, multifamily lending, and community investment programs. Fannie Mae chairman and chief executive officer James A. Johnson said Mr. Levin is "the company's most experienced manager in all aspects of housing finance." Fannie Mae's website address is http://www.fanniemae.com.

Duff & Phelps Credit Rating Co. has assigned provisional ratings to Ocwen's first United Kingdom securitization of B&C-credit mortgages originated by the former Cityscape affiliate City Mortgage Corp., the rating agency has reported.Five classes of the transaction, Ocwen Mortgage Loans 1 plc mortgage-backed floating-rate notes due 2030, received investment-grade ratings. Senior classes A1 and A2, in the amount of 51 million British pounds (about $85 million) and 130 million British pounds (about $217 million), respectively, received triple-A ratings. Mezzanine class M1, in the amount of 20 million British pounds (about $33 million), received a double-A rating, and mezzanine class M2, in the amount of 11 million British pounds (about $18 million), received an A rating. Subordinate class B, in the amount of 10 million British pounds (about $16.6 million) received a BBB rating.

PacificAmerica Money Center Inc., Woodland Hills, Calif., has announced a $200 million securitization of home equity loans originated by Pacific Thrift and Loan Co., a wholly owned subsidiary.PacificAmerica Home Equity Loan Trusts Series 1998-2F and Series 1998-2V will be underwritten by Merrill Lynch, Pierce, Fenner & Smith and insured by Financial Security Assurance Inc., the company said. PacificAmerica also announced that no adjustment to the valuation of the company's interest-only strips receivable is expected for the current quarter. Loan pool performance data through May are consistent with the prepayment and loan-loss assumptions used to value the IO strips, the company said.

ContiFinancial Corp., New York, has made an investment of an undisclosed amount in American Commercial Capital LLC, Carlsbad, Calif., that will give it a 50.1% economic interest in the company, ContiFinancial has announced.ContiFinancial will have a 50% voting interest in ACC, which specializes in franchise lending, and will be its primary source of financing and securitization services. Glenn Goldman, executive vice president of ContiFinancial, cited "the recent synergy and convergence" between the franchise lending and commercial real estate marketplaces and said ACC is "poised to exploit the opportunities" to work with ContiFinancial's ContiMAP commercial real estate mortgage conduit. John Shrewsberry, ACC's managing director for capital markets, said lending to small business franchises in a format suitable for securitization is a first step toward giving them greater access to the capital markets. "The more than $3 billion of similar paper originated by other commercial finance companies and the REITs in this sector represents a very small portion of the potential marketplace for this type of financing," Mr. Shrewsberry said.

Mortgage applications increased 9.2% for the week ended June 19 as the Refinancing Index shot up 16.3%, according to the Mortgage Bankers Association of America's weekly Mortgage Application Survey.The Purchase Index rose 4.0%, the Refinancing Index surged 16.3%, the Conventional Index climbed 7.0%, and the Government Index jumped 18.4%, the survey indicated. On a seasonally adjusted basis, the Market Index rose from 401.1 the previous week to 440.6; the Purchase Index rose from 262.1 to 274.6; the Refinancing Index shot up from 1209.6 to 1406.2; the Conventional Index climbed from 517.6 to 557.3; and the Government Index rose from 206.8 to 245.9. Refinancings represented 45.2% of total applications, up from 42.4% the previous week, while adjustable-rate mortgages accounted for 10.1%, down from 10.2% the week before. Overall, applications were up 85.5% compared with those for the same week last year. The address of the MBA's website is www.mbaa.org.

The goal of drawing five million consumer responses to public service advertising aimed at aspiring homebuyers has been achieved two-and-a-half years early, the Fannie Mae Foundation has announced.The goal, which had been set for the end of the year 2000, was met on June 18, the foundation said. "Our new partnership with Black Entertainment Television and Univision that began this spring was designed to reach those who need homeownership information the most," said Fannie Mae Foundation chairman James A. Johnson. "Expanding our outreach activities to the African-American and Hispanic communities demonstrates the significant progress we made to ensure our goal that every American has access to the information needed to buy a home." The foundation said the current homeownership rates for African Americans and Hispanics are 44.8% and 44.0%, respectively, still far below the white homeownership rate of 72%. But the foundation said it has "begun to break down the barriers to homeownership" since launching its 1998 advertising campaign in April by reaching 14% of potential Hispanic homebuyers and 34% of potential African-American homebuyers.

The AFS Title Search Index fell 5.0% to 219.4 for the week ended June 19 from 219.4 for the week ended June 12, according to Advance Factor Service.The index averaged 209.7 over the previous four weeks, up 2.3 points from the prior week's four-week moving average. A year ago, the index stood at 150.9, 72.4% of the current level. AFS manager Paul Descloux said the index's fallback indicates that mortgage rates may have to decline further to return mortgage demand to its 1998 highs. "However, the continuation of mortgage rates around the 7.0% level bodes for a continuation of the AFSTSX at least at these levels," Mr. Descloux said. "The four-week moving average of the AFSTSX is still at 82.5% of its February high, enough to sustain this refinance wave well into a fifth and sixth month." [AMIEE: URL LINK "Click here to see chart."

The Office of Thrift Supervision is reviewing its guidelines to determine whether high-LTV lending poses a safety and soundness risk to federally insured thrifts that originate and portfolio the product.The move by the OTS has prompted Bay View Capital Corp., a San Mateo, Calif.-based thrift, to delay its $150 million acquisition of PSB Lending Corp., Carlsbad, Calif., one of the nation's top originators of high-LTV loans. PSB Lending is itself a division of a thrift, Pacific Southwest Bank, Dallas. "We have some safety and soundness concerns with the high-LTV market," an OTS spokesman told MortgageWire. "We are concerned not only for the institution but also the consumer." The OTS is reviewing its current regulations to determine a course of action. It is not known whether the federal regulator is planning to limit the holding of high-LTV loans. "I, myself, don't know what's going to happen," the OTS spokesman added, "or how long it's going to take to study the issue." Edward Sondker, CEO of Bay View, said he will wait at least 30 days before deciding whether to proceed with the planned acquisition of PSB. Last year, PSB originated and later securitized $415 million in high-LTV product.

PNB Financial Group, Newport Beach, Calif., has been approved for listing on the Nasdaq National Market System effective June 24.The company, which has been trading in the over-the-counter market under the symbol PNBF, will retain the symbol after the move. PNB is the parent company of Pacific National Bank, which has residential mortgage loan operations in the California cities of Irvine, San Diego, and Walnut Creek and in Phoenix.

American Business Financial Services Inc., Bala Cynwyd, Pa., has completed the funding for a $120 million securitization that was priced on June 3, ABFS has announced.The company said it retains the mortgage servicing rights to loans it securitizes in order to fund growing loan and lease originations and to provide added sources of revenue.

Advanta Mortgage Conduit Services, Spring House, Pa., has priced an $80 million deal backed by adjustable-rate revolving home equity lines of credit.As a result of the securitization, and another involving auto loans, Advanta said it expects to report net income for the second quarter of approximately $9.5 million, which is higher than earlier estimates. (The estimated net income figure is after charges Advanta expects to take to reflect higher prepayment rates, the company said.) Advanta Revolving Home Equity Loan Trust 1998-A will issue notes representing ownership interests in the HELOC securitization. The effective pass-through yield on the trust loans will be 17 basis points over the one-month London Interbank Offered Rate. J.P. Morgan was the sole underwriter of the transaction.

Delta Funding Corp., Woodbury, N.Y., has announced the sale of a $445 million securitization of closed-end home equity loans.The deal, Delta Funding Home Equity Loan Trust 1998-2, was priced in 14 parts, with coupons ranging from 6.13% to 6.75% for the fixed-rate classes and from 16 to 125 basis points above the one-month London Interbank Offered Rate for the adjustable-rate classes. Donaldson, Lufkin & Jenrette Securities Corp. was the lead underwriter for the deal, which was co-managed by Lehman Brothers Inc. and NationsBank. Delta Funding is a wholly owned subsidiary of Delta Financial Corp., whose website address is http://www.deltafinancial.com.

Centex Home Equity Corp., Dallas, has announced the completion of a $200 million securitization of subprime home equity loans through Centex Home Equity Loan Trust 1998-2.The mortgage pass-through certificates issued by the real estate mortgage investment conduit trust are insured by MBIA Insurance Corp. CHEC is also the servicer for the loans included in the deal, which was underwritten by Donaldson, Lufkin & Jenrette Securities Corp. and Salomon Smith Barney.

The ratings of HomeSide Lending Inc. and HomeSide International Inc., Jacksonville, Fla., have been placed on FitchAlert with negative implications by Fitch IBCA Inc. The action followed the placement on FitchAlert-negative of the ratings of National Australia Bank Ltd., which owns the U.S. holding company whose subsidiary acquired HomeSide and HomeSide Lending in February.The rating action on NAB was, in turn, related to the placement on FitchAlert-negative of Australia's foreign currency. The affected HomeSide ratings include those on HomeSide Lending's senior medium-term notes (rated AA-minus), its commercial paper program (rated F1-plus), and HomeSide's $200 million senior secured second-priority notes due 2003 (rated A-plus).

The Senate Appropriations Committee has asked the U.S. General Accounting Office to conduct a study of whether lenders steer homebuyers into Federal Housing Administration loans to get higher servicing fees.Part of the debate over raising the FHA loan limit has focused on the steering issue because FHA lenders receive higher servicing fees than conventional lenders. House and Senate appropriators have been considering proposals to cut the servicing fee on FHA loans securitized in Ginnie Mae pools. But before taking action, the Senate panel wants the GAO to conduct a study.

The average 30-year fixed mortgage rate for the week ending June 19 fell to 6.94% from 7.04% the previous week, the lowest rate in five months and the first time it has dropped below 7% since the week ended Feb. 20, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate fell to 6.62% from 6.71%, while the average rate for one-year Treasury-indexed adjustable-rate mortgages dipped to 5.68% from 5.71%. Fees and points averaged 1.0 for the 30-year mortgages and 1.1 for the 15-years and the ARMs. "Interest rates were primarily influenced by the Asian economic problems, and most specifically by the Japanese economic problems," said Robert Van Order, Freddie Mac's chief economist. "And although we may see mortgage rates rise slightly in next week's survey, we don't expect rates will be very much higher at all, remaining very affordable well into the summer." The 30-year rate was the lowest since the week ended Jan. 16 when it fell to 6.89%, with average fees and points of 1.3. A year ago, the average 30-year and 15-year fixed rates were 7.61% and 7.14%, respectively, and the average one-year ARM rate was 5.66%. Freddie Mac's website address is www.freddiemac.com.

Fannie Mae is predicting that residential mortgage originations will top $1.2 trillion this year, which would be a record.In a revised forecast, David Berson, Fannie Mae's chief economist, said a combination of record home sales and strong refinancings are the driving engines in this heated market. "The current projection of $1.2 trillion is about a 15% increase from the previous record high of $1.019 trillion (in loan originations), which occurred in 1993," Mr. Berson told reporters. Fannie Mae said it purchased a record $35.1 billion in mortgages during the month of April and $29.2 billion in May, also a record. For the first five months of 1998, the secondary marketing giant bought $131.8 billion in single-family product, compared with $57.2 billion during the same period in 1997. Meanwhile, adjustable-rate mortgage originations likely will total just 14%, a new historic low.

Countrywide Credit Industries Inc., Calabasas, Calif., has reported unaudited earnings of $90.8 million for the fiscal first quarter ended May 31, 30% higher than its earnings of $70 million a year ago.Basic and diluted earnings per share were $0.82 and $0.78, respectively, up from $0.66 and $0.64. The company's board of directors declared a cash dividend of $0.08 per common share for the first quarter, payable July 31 to shareholders of record on July 15, 1998. Countrywide chief executive officer Angelo R. Mozilo said the highlight of the quarter was record fundings of $20.9 billion, up 123% from a year ago. "While this is predominantly a refinance market, purchase mortgage fundings also reached an all-time high of $9.0 billion during the quarter," Mr. Mozilo said. Subprime and home equity loans accounted for 23% of the production sector gain on sale for the quarter and 11% of the sector's pretax profits, he said. The servicing portfolio ended the quarter at $192 billion, and the servicing sector margin declined to "essentially a break-even level" because of an increase in the normal amortization of the servicing asset, Mr. Mozilo said. The company's website address is www.countrywide.com.