In its survey, Ferguson found that demand for new employees appears to be strongest in the U.S. and Europe. However, nearly 20 percent of respondents with operations in Asia reported that they plan to expand their staffing levels there by 11 percent to 20 percent or more, with more than half of these planning hiring increases greater than 20 percent by year-end.

More than 150 real estate companies responded to the survey and were divided into the categories of: commercial mortgage finance (commercial mortgage-backed securities (CMBS) firms, commercial mortgage banks, insurance companies and commercial banks); commercial ownership/services (private developers, real estate investment managers (REIMs), real estate investment trusts/real estate operating companies (REITs/REOCs), commercial brokerage firms, private equity investors and REIT securities firms); and single-family residential (homebuilders, residential mortgage banks and residential mortgage insurance companies).

"Significant hiring opportunities remain in real estate," said Bill Ferguson, co-chairman of FPL. "Real estate companies are optimistic about the future, and the result is the hottest hiring market we have seen in recent history."

Some geographic regions are hot spots for hiring activity. Within the U.S., the Northeast had the strongest demand in both commercial and residential markets, followed by the West Coast region. The commercial mortgage sector hiring was strongest in the Northeast; commercial ownership/services firms are most active on the West Coast, and single-family residential firms are experiencing the most activity in the Southeast and Midwest .

Other findings of the survey found in commercial mortgage finance that more than half of respondents expect hiring increases. Debt/mortgage origination specialists and underwriting professionals are in high demand.

In commercial ownership/services, more than one-third of respondents said they expect increases of up to 20 percent and that development, property management, and capital-raising professionals are in particular demand; strength among REITs and private equity firms.

In the single-family residential market respondents said there is continued strong demand among homebuilders and strength in residential mortgage business persists despite drop in refinancings. The most sought after job functions include development, construction, and sales/marketing.

Overall, respondents were generally optimistic about the outlook for their businesses, indicating that over the next six months they plan to increase hiring by 1 percent to 10 percent, on average, Ferguson said. Ferguson Partners analyzed responses to questions on anticipated hiring practices for the remainder of 2005 by functional expertise, sector and geography.
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Shelby, leading off a committee hearing on the Treasury Department’s June 30 report on TRIA, nonetheless reiterated his earlier comments supporting the report's recommendations that TRIA, which expires December 31, not be extended or made permanent in its present form.

“TRIA has provided limited short term benefits. But, it has also impeded the development of broader solutions for the larger problems confronting the insurance marketplace,” Shelby said. “I believe we must look to ways to restructure TRIA to avoid these negative consequences. I think the Administration has made some helpful suggestions as to how to redesign the program to allow the development of a functioning marketplace.”

However, the Mortgage Bankers Association, in letters submitted this week to leaders in both the House and Senate, asked for an extension of TRIA’s provisions and a permanent solution to a federal terrorism insurance backstop. MBA Chairman Michael Petrie, CMB, said MBA members bear the “lion’s share of the financial risk associated with property damage or destruction”—the single largest share of real estate outstanding in all markets.

“MBA stood with the Congress and President Bush to pass TRIA in November 2002. The need for TRIA was compelling then and continues to be now,” Petrie said. “Terrorism insurance is a necessary component in today’s society evidenced by the fact that a majority of our members require legal documents to provide for coverage when closing commercial mortgage transactions. This required coverage assures marketplace stability and continuity for the commercial real estate finance industry. TRIA and terrorism insurance are essential to defending America against the physical and economic consequences of an attack.”

Treasury Secretary John Snow, in his second appearance on Capitol Hill this week, did not vary in either his testimony or his feelings toward TRIA extension. He reiterated earlier comments before the House Financial Services Committee on Wednesday that the private sector should be prepared to take on a greater role in accommodating the risks of terrorism insurance.

“If the program is to be continued, we have suggestions on how to encourage the private sector,” Snow said. “The private sector can do more and should do more.”

Ben Bernanke, chairman of the President’s Council of Economic Advisors, outlined the Bush Administration’s recommended changes to TRIA. Those changes include:

• A “significant increase” to $500 million (from $100 million) of the event size that would trigger coverage;

• Increases in the dollar deductibles and percentage co-payments currently in place;

• Elimination of certain lines of credit in the program, such as commercial auto, general liability and “other lines that are much less subject to accumulation risks; and

• “Reasonable reforms” to ensure that injured plaintiffs can recover against negligent defendants, but that also guarantees that “no person is able to exploit the litigation system, exposing the American taxpayer to excessive and inappropriate costs.”

“TRIA has succeeded in its limited role of providing a transition period for the insurance industry to adjust to the new realities after September 11th, through a temporary federal backstop,” Bernanke said. “Continuation of the program in its current form is likely to hinder the further development of the insurance market by crowding out innovation and capacity-building.”

But Sen. Christopher Dodd, D-Conn., disagreed with the Treasury analysis. “There is a substantial gap in the reinsurance market for terrorism, and there is nothing in the Treasury report to support the contention that the private sector would step up to fill the gap if TRIA is not renewed,” he said. TRIA has done nothing, in my view, to create a more stable reinsurance market. The expiration of TRIA will only exacerbate the lack of terrorism insurance out there.”

Snow replied that evidence suggests an “increased development” in terrorism insurance take-up rates. “The structure of TRIA was to give the market a larger role over time, with larger co-payments and larger deductibles,” he said. “Even as the market has done so, the coverage has expanded. We have confidence that this will continue to do so. The past is prologue; we think the market has more capacity and will create more opportunities.”

But in the MBA letters, Petrie said MBA does not believe the private market is currently prepared to provide an adequate supply of affordable terrorism insurance and reinsurance without government involvement.

“The extension of TRIA is needed urgently, well before its December 31, 2005 expiration date," Petrie said. "To do less would be to compromise our vigilance against terrorism, to cast a shadow across America’s economic stability, and to fail to secure our nation against the physical and economic consequences of another attack. Congress must act now to provide certainty that terrorism insurance will be available into next year.

Shelby did not indicate when a bill would move in the Senate. But on Wednesday House Financial Services Committee Chairman Michael Oxley, R-Ohio, said he felt an “enormous responsibility” to move forward with a bill this year. “At the end of the day, this chairman is going to deliver a bill, and we’ll work with the Treasury and anyone else who has a stake in this. Anything else would be a big mistake,” he said.
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Reis Inc. reported that the nation's office property market expanded strongly in the April-through-June period as companies leased more space. The national vacancy rate fell to from 15.9 percent in the first quarter to 15.4 percent, the lowest level in three years. Rents climbed 0.7 percent from $20.18 per square foot to $20.32 over that same time span, according to Reis.

Moody’s analysts expect demand growth to slightly outpace new supply for suburban offices, and gradually improve high vacancy rates. The segment, however, continues to warrant careful monitoring and remained “yellow” with a score of 58, Moody's said.

Multifamily and retail sectors scored in the “green” range. Retail was 83, up from 81 in the prior quarter. "Neighborhood and community shopping centers pulled ahead of the multifamily sector this quarter and continue to exhibit the most prolonged period of stability among all commercial real estate sectors," said Sally Gordon, vice president and credit officer at Moody's and co-author of the report.

The multifamily sector remains a hearty green with a score of 81 during the first quarter, the latest available data, compared to a slightly higher 82 during the fourth quarter of 2004, said Patricia McDonnell, co-author of the report. “The healthy apartment number is based on a broad-based low and declining vacancy,” she said.

Full service hotels moved up by two points to 66, one point from green, and limited-service improved by four points to a green 75. Moody’s analysts said the limited-service sector recovery has been more pronounced for several quarters, and the gap in the scores for these sectors continues to widen.

The industrial score remained unchanged from last quarter at 68, just inside green territory, as Moody’s expects demand growth to run slightly ahead of supply. The vacancy rate is gradually drifting down across 44 out of 51 markets.

The report accommodated government re-defined boundaries of metropolitan statistical areas. Moody’s analysts said the former geographic definition was retained, and employment data was re-sorted and aligned to conform to real estate data.

"The reconfiguration of MSA definitions and boundaries creates enormous potential for a mismatch,” Gordon said. “All analyses incorporating economic or demographic data must be scrupulous to make sure that the geographic entity for one set of data is the same as that for another set of data.”

The top 10 commercial real estate markets in the country, in order, include: Los Angeles, New York; Honolulu; Orange County, Calif.; Ventura County, Calif.; Albuquerque, N.Mex.; Miami; Washington, D.C., San Jose, Calif.; and Long Island, N.Y.

The 10 worst commercial real estate markets, from worst up, include: Dallas; Pittsburgh; Charlotte, N.C.; Stamford, Conn.; Detroit; Las Vegas; Atlanta; Houston; San Antonio; and Hartford, Conn.
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“The existing senior loan documents precluded the use of junior or mezzanine financing,” said David Ross, senior director at Tremont's Boston office. “We were able to work with one of its capital sources and arrange a short-term loan structured as an investment of preferred equity for the borrower.”

Ross arranged and closed the preferred equity investment in seven days because the borrower had other capital commitments.

The building is in a free trade zone and has its own zip code. It houses a wireless technology tenant on a short-term lease. “After walking through [the building] for three hours, the lender was able to get sense of just how enormous it is,” Ross said. “The building is in excellent condition and has some components and fit-up that would be difficult to economically replicate. It is located in a strong industrial and warehouse market.”

Meanwhile, the Chicago office of Tremont Realty Capital arranged debt refinancing of a hotel portfolio in Lexington, Ky. It included the Baymont Inn, a Holiday Inn and a Best Western totaling more than 500 rooms.

Tony Kolomayets, a senior director at Tremont, arranged the 24-month, $13.75 million loan funded through an undisclosed Chicago-based bank. The bank provided for a nearly 68 percent loan-to-stabilized value. The interest rate was 1.5 percent over the Bank of America prime rate.

According to Kolomayets, the key to the transaction was to accommodate the borrower with flexible financing. “[It] accomplished several goals for our client, such as taking out the existing high rate financing and providing a large amount of additional cash flow with the new loan,” he said.
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"Education keeps mortgage professionals up to date on the latest developments in the industry and helps us serve our customers better," said Larry Gilmore, AMP, chair of MBA's Diversity Task Force and vice president of government of housing and industry relations for Option One Mortgage Corp. "The Path to Diversity scholarships provide opportunities for these industry professionals to extend their knowledge and enhance their careers, while ensuring that the industry meets the needs of the diverse communities we serve."

The Path to Diversity program continues through a sponsorship provided by the Research Institute for Housing America (RIHA), a trust fund subsidiary of MBA. The following companies have also provided scholarship funds: Irwin Mortgage, Option One Mortgage, SunTrust Mortgage and Wells Fargo Home Mortgage.Companies can participate in the Path to Diversity program by enrolling as a participating company or by sponsoring 10 or more scholarships. Additionally, member firms providing internships to qualified college students are eligible to receive free distance-learning courses for each intern through CampusMBA.

To date, 147 scholarships have been awarded since the program's inception in 2001. 

Visit http://www.mortgagebankers.org/pathtodiversity to download the scholarship application. For more information, contact Joanna Truitt at (202) 557-2835 or jtruitt@mortgagebankers.org.
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For additional information please contact Beth Percynski at 202-557-2866 or bpercynski@mortgagebankers.org. This call is open to MBA members only and is closed to the media.
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The previous attempt to reform RESPA, initiated by then-HUD Secretary Mel Martinez, generated more than 45,000 comment letters. While the Mortgage Bankers Association (MBA) strongly supported RESPA reform, it and other industry groups later urged HUD to rep-propose its rule to allow further industry review and comment. MBA was concerned that the rule pending at the Office of Management and Budget (OMB) would potentially have created more, instead of less, confusion for the home buyer and greater regulatory burdens for lenders. In March 2004, HUD withdrew the RESPA proposal for further review and analysis.

Yesterday, Jackson said HUD was eager to move forward. “Let’s not harp on what occurred [prior to 2004] because that was not on my watch and I cannot do anything about it. But this is on my watch,” he said. “I would like to see this resolved and [HUD] get a rule out as quickly as possible. But again, I have to say I am not interested in doing it fast. I am interested in getting a good rule that has a consensus.”

Jackson, who spoke briefly at the beginning of the five-hour roundtable, said he could not define “consensus” in percentages, but noted, “I know that last time, we did not have a consensus.”

HUD Deputy Assistant Secretary Gary Cunningham disclosed drafts of HUD’s Good Faith Estimate (GFE), a Mortgage Package Offer (MPO) form that replaced the Guaranteed Mortgage Package Agreement (GMPA) and described a Settlement Service Package (SSP) option from its RESPA reform proposal of 2004.
 
During the three-and-a-half hour discussion following, MBA Chairman-Elect Regina Lowrie said MBA supports developing a new GFE that facilitates competition among industry players, but also includes simplicity, standardization and consumer understanding of interest rates, fees and their totals.

“Are [the GFEs] as simple as they could be? Do they give consumers the ability to look at a rate, look at the fees and compare and shop from one lender to a broker to a banker?” Lowrie asked.
 
Lowrie also emphasized the need for a level playing field. “The consumer should not necessarily appear to be looking at additional fees or costs going to a broker versus going to a lender and/or a banker,” she said.
 
Yield spread premiums within the GFE prompted considerable discussion. Representatives of mortgage brokers said if brokers must disclose their financial receipts for a loan, then all mortgage industry players must disclose their costs. But MBA Senior Director for Government Affairs Ken Markison noted that lenders' disclosure of their yield spreads should not be required on any new form.

Joe Falk, chair of government affairs at the National Association of Mortgage Brokers (NAMB), said consumers do not necessarily understand that mortgage companies can act in a mortgage broker transaction capacity as well as a mortgage lender, because certain mortgage companies have warehouse lines of credit while others do not. He said by having different disclosures, based on HUD’s 2004 RESPA reform, there is the possibility that mortgage companies with warehouse lines can “enjoy the advantages” of different disclosures by “making consumers think that those loans cost less when, in fact, it is exactly the same transaction.”
 
HUD has five more roundtables scheduled: July 21 in Los Angeles; July 28 in Washington, D.C.; August 4 in Chicago; August 11 in Fort Worth, Texas; and August 18 in Washington, D.C.
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