Today, MBA launched its online State Legislative Database, a comprehensive online catalog of pending and enacted state legislation and regulations that relate to the real estate finance industry. 

“As more and more states introduce legislation that affects the mortgage banking industry, there is an increasing interest by MBA members to find out more about how these proposed laws will impact their businesses. With this new online tool, MBA members can go to one central location to review this material,” said Kurt Pfotenhauer, MBA’s senior vice president of government affairs.

For each bill or regulation, the database provides the state bill or regulation number, the primary issue it addresses, a description of the bill or regulation, the effective date and the date this information was last updated by MBA staff.  Each listing also includes a Web link to each bill or regulation online and to the relevant state’s Web site.

The online State Legislative Database will be continuously updated by MBA staff so that members have quick access to the most current information on the activities in the state legislatures.

The database is available to all MBA members via the My MBA Web page (http://mymba.mbaa.org/login.aspx . If you do not remember your password for My MBA, you will have the option of clicking on “forgot your password?” to retrieve the required information.

If you have additional questions, contact Paul Richman at (202) 557-2899 or prichman@mortgagebankers.org, or Beth Percynski at (202) 557-2866 or bpercynski@mortgagebankers.org.
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Late last year NexGen Lending, a correspondent lender, began pricing products with tools from Dallas-based Sollen Technologies. NexGen had a proprietary loan origination system, but it needed accurate pricing for originators to lock-in loans online. NexGen met with Sollen Technologies at the Mortgage Bankers Association's Annual Convention in October. Installation of Sollen’s LenderOnline, a pricing engine, was completed in the fourth quarter of 2004.

Since converting, NexGen's originators enter information and receive rates in "seconds," Keaney said. "When you have more accurate pricing, there is less loss in your secondary," she said. "Originators don't want to guess. The pricing is accurate."

Nancy Kieszkowski, vice president of operations at Sollen, said the pricing engine can search for loans through rate or pricing. NexGen uses the engine to show originators the entire range of pricing. NexGen originators then lock the loan through the NexGen proprietary loan origination system although the systems are not integrated at this time. Kieszkowski said few companies request interfaces to export data and populate fields. “It depends on the information they want exported out and if it is a field that our common users are using within Sollen,” she said.

LenderOnline provided NexGen originators with capabilities to see all rates for their mortgage products and electronically lock the loan rather than fax or call the secondary marketing department. Keaney said the product has reduced the stress of NextGen's sales department and increased secondary market profits.

The product also allows lenders to manage revenue and monthly volume expectations. The RateSheet Generator manages investor pricing and a click of the mouse updates interest rates each morning and throughout the day.

"You get a very quick return on your investment," said Michel Van Hee, CEO of Sollen Technologies. "We're trying to expedite the implementation. We're shooting for a month or less."
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The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, passed this month by Congress, is expected to result in a temporary increase in loss rates as consumers rush to file for bankruptcy under the current rules in the six-month period before the law takes effect, S&P said. “A surge in bankruptcies is likely to occur even before the law is signed,” the agency said.

S&P analysts predicted that increased bankruptcy filings attributable to this change could cause total filings for 2005 to rise from 2004. Total filings for 2004 were 3.9 percent lower than the record amount filed in 2003; 2004 represented the first annual decline in filings since 2000.

Analysts estimated that under the new law, up to 10 percent of consumers who declare bankruptcy will no longer have the option of filing for Chapter 7, which allows for unsecured debts such as credit card debt to be erased. Instead, the law allows each state will use a "means test" that will require some individuals to file under Chapter 13, where they will need to pay part of their outstanding unsecured debts from future earnings.

Consumer advocacy groups have argued that the new law is consumer-unfriendly; real estate finance groups such as the Mortgage Bankers Association, which supported passage of the law, assert that the law creates a more level playing field and gives lenders and other creditors more recourse in recovery of debts.

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Fitch Ratings, New York, said the frequency of its U.S. structured finance upgrades and downgrades both declined in 2004, but that the decrease in the number of downgrades was more pronounced than the decrease in upgrades, resulting in an improved ratio of upgrades to downgrades for the year of 2.36 to 1 compared with 1.95 to 1 in 2003.

Rating performance improved across all the major structured finance rating categories in 2004, Fitch said. Overall, 10 percent of Fitch's U.S. structured finance ratings were upgraded in 2004 while just 4 percent suffered downgrades. In addition, Fitch's structured finance downgrades fell across the board in 2004. The number of RMBS downgrades declined by 40 percent, ABS downgrades fell 21 percent, CMBS downgrades dropped by 25 percent and CDO downgrades fell by 45 percent.

“A robust economic environment, characterized by strong consumer spending, lower unemployment levels, and a decline in personal bankruptcy filings, helped to contribute to positive rating performance in the consumer and commercial non-real estate ABS sectors,” said Stephanie Mah, senior director of credit market research with Fitch Ratings.

Fitch analyzed the migration of U.S. structured finance securities from 1991-2004, with the latest version focusing on 2004 transition performance for each of the major sectors including ABS, RMBS, CMBS and CDOs.

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Business travel is bouncing back from the trough following the September 11, 2001 terrorist attacks, and hotel revenue per available room (RevPAR) was up by 7.8 percent in 2004 compared to a year earlier, while profits rose by 29.9 percent, according to Moody's Investors Service, New York.
 
"After experiencing two years of RevPAR declines in 2001 and 2002, and only a minimal gain in 2003, U.S. hotels posted a RevPAR increase…in 2004 as urban markets, which experienced the greatest increase in vacancies, are seeing more rooms booked as corporate travel increases with the expansion of the economy," said Moody's analysts E.J. Park and Natalka Purij, authors of the report "More Hotels Hang Out the No Vacancy Sign as Business Travelers Return."

While the pace of recovery is not uniform, the report said, every market but one in the top 25 Metropolitan Statistical Areas posted a RevPAR increase in 2004.

"Barring any further terrorism-related incidents, the outlook for the hotel industry in 2005 and 2006 is bright, with RevPAR increases expected to range between 5 percent and 7 percent each year," said Park and Purij.
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The $9.6 million loan under Arbor’s CMBS product line to refinance the 390-unit complex Shamrock Apartments in Cedar Rapids, Iowa, carries a seven-year term amortized over 30 years with a note rate of 5.884 percent.

The loan, originated by Aaron Abelson, director in Arbor’s full-service Chicago lending office, said this is the third loan Arbor has funded for this borrower. :Through this financing, Arbor was able to consolidate several high interest rate bank loans into one fixed rate deal,” Abelson said. “Also, Arbor was able to provide this client with cash-out proceeds for additional acquisitions.”

The Braeburn Apartments in Providence, R.I., and Lake Forest Apartments in Norton Shores, Mich., accounted for $9.35 million under the Fannie Mae DUS/MBS product line. Arbor refinanced the 51-unit Braeburn Apartments for $2 million and the 252-unit Lake Forest Apartment complex for $7.35 million.

The 10-year permanent loan for Braeburn Apartments amortizes on a 30-year schedule and carries a note rate of 6.05 percent, said John Edwards, director at Arbor who originated the loan. It was underwritten in Arbor’s full-service Dallas lending office. “We offered flexibility for a very specific transfer of ownership interest within the borrowing entity during the first year of the loan - consistent with Arbor's ability to provide solutions custom made,” Edwards said.

The 10-year loan, 30-year amortization on Lake Forest Apartments carries a note rate of 5.56 percent. Michael Jehle, director at Arbor, originated the loan. The full-service Chicago lending office underwrote it. “Our loan provided funds for the acquisition of the subject property to a repeat customer of Arbor,” Jehle said. “This acquisition included a reverse 1031 exchange and a TIC structure.”
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And the conference, which takes place April 19-20 in Washington, D.C., also provides the opportunity to hear some of those lawmakers and policy makers. Scheduled to appear at this year’s conference:

• Sen. Chuck Hagel, R-Neb., chair of the Senate Banking Securities and Investment subcommittee and author of a bill, S.190, that would comprehensively reform oversight of Fannie Mae and Freddie Mac;
• Treasury Secretary John Snow;
• HUD Secretary Alphonso Jackson, who recently signaled that the department was ready to move forward with a new effort to reform the Real Estate Settlement Procedures Act (RESPA);
• Sen. Evan Bayh, D-Ind., a key player in legislation related to the real estate finance industry;
• Political pundits Ann Coulter and Donna Brazile, who will provide a spirited lunchtime debate on the Washington political landscape.

The conference also includes the opportunity for participants to visit Capitol Hill and discuss issues of importance with their legislators. By doing so, participants demonstrate to the newly elected Congress the united force of MBA's members and its commitment to investing in America's communities.

All individuals from MBA member companies are encouraged to attend this important event. Registration fee is just $370 for MBA members. The preliminary registration deadline is April 5.

To register, call (800) 793-6222 or visit the registration page for more details. For sponsorship information, contact Paul Hilliar at (202) 557-2858 or philliar@mortgagebankers.org.
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Companies should take heed of Emerson’s comment. With so many corporations looking to save money by off shoring or focusing on a particular segment of their company, they could be overlooking one of the most important departments—the IT department.

Many businesses could be missing out. Most IT departments can’t effectively explore innovative uses of technology because they are stuck in the daily operational grind, according to a study commissioned by A.T. Kearney, Plano, Texas and Harris Interactive, Rochester, N.Y., “Why Today’s IT Organization Won’t Work Tomorrow.”

The study of 200 North American and European business executives by found the bottom line for most businesses is that today’s IT operating model will not meet the demand of tomorrow. A.T. Kearney predicts many companies' growth opportunities are at risk because their IT organizations are not responding effectively to the demands of their business.

While 67 percent of business executives view IT innovation as important or critical to their companies' success, the study found only 20 percent of companies' IT investment is allocated to IT innovation, a 30 percent decrease from a similar study conducted in 2002. According to the most recent survey, nearly three-quarters (72 percent) of executives said the best technology ideas in their companies originate outside of the IT department in areas such as corporate strategy, sales, marketing and operations. In fact, nearly one-half (47 percent) of business leaders surveyed agree that their IT department focuses primarily on tactical, day-to-day IT requirements rather than longer-term strategic requirements.

Most executives said it was difficult to allocate appropriate resources to strategy and innovation. Money spent on IT innovation budgets are moving away from innovative business solutions, the study said.

"These findings shatter the notion that IT leads the early adoption of technology and the business side slows down the process," said Mark Livingston, vice president at A.T. Kearney. "The reality is most IT departments can't effectively explore innovative uses of technology because they are stuck in the daily operational grind. Business leaders accept this and look outside of IT for innovative technology resources to achieve strategic business goals."

Only 25 percent of respondents said their IT planning and business-planning processes are integrated and developed in tandem. In the 2002 study, one-third (32 percent) of participants had a fully integrated IT planning process.

As a result, IT organizations are perceived as unresponsive and not very agile. Only 41 percent of business executives believe their IT organizations react well to business change. In addition, more than 30 percent of executives believe one-fifth or more of their company's IT budget is wasted each year.

"IT organizations are increasingly challenged to move beyond maintaining and fixing the complex IT architectures of the past and to begin producing true value beyond cost-cutting," said Dan Starta, A.T. Kearney vice president and co-leader of the study. "The most effective way to achieve value is via well-integrated IT-business partnerships, not an environment where IT is viewed as a tactical function. To be successful, IT organizations must start judging their success in terms of value contribution to core business operations and innovative initiatives that support business strategy and drive growth."

The perception that IT does not necessarily contribute value beyond basic cost reduction could explain why IT is not always a priority at the executive level. Only 37 percent of executive respondents rank IT issues in the top 10 percent of there company’s priorities and 75 percent rank IT in the top 25 percent. Only 28 percent of IT leaders rank IT in the top 10 percent, although more than 70 percent rank it in the top 25 percent.

To support business goal, the focus of IT functions in the future will not solely focus on technology but a company get the edge over the competition. The study identifies four key areas where IT can help future-proof an organization: value-based asset optimization, IT complexity reduction, customer-focused innovation, and organizational structure and governance.
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