(Orawin Velz is director of economic forecasting in the Mortgage Bankers Association’s economics and research department. She provides commentary and analysis on key monthly economic indicators. She can be reached at ovelz@mortgagebankers.org.)
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Please note that this event is not a scramble. You will be grouped according to handicap. We hope you join MORPAC for this great event. 

Please register for this event by October 14.  To register, complete the attached form (please include your handicap) and fax back to MBA at (202)721-0251, attention: Mary Goldsmith, or call (202)557-2876 for further information.

www.mortgagebankers.org/documents/newslink/MORPACGolfRegistrationForm.pdf.

(This article is not a solicitation to contribute; all MORPAC contributions are voluntary. For more information, go to www.morpac.org.)
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FirstPoint Mortgage Resources provided $100,000 to help the Center for Home Ownership offer home buying counseling and educational services. The FirstPoint gift also helped the Center provide down payment assistance to the families. 

Six of the families are Hispanic, highlighting the need for homeownership assistance in this community. The homebuyers in Winston-Salem, Greensboro, Raleigh and Charlotte were approved for mortgages through BB&T’s Community Homeownership Incentive Program. The program helps borrowers overcome common financial obstacles to home ownership, such as income, down payment cash, closing costs and private mortgage insurance premiums. This affordable housing initiative marks the first time that FirstPoint, the Center and BB&T have worked together on a project. 

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Visionet Systems, Cranbury, N.J., announced National City Mortgage Co., Miamisburg, Ohio, selected VisiEscrow to streamline its off-cycle and mass escrow analyses. VisiEscrow is a rule-, workflow- and exception-based management system, which integrates into a client’s existing environment and automatically analyzes the escrow discrepancies. The system reviews each loan and queue the problem loans to designated personnel for remediation.

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The Federal Reserve Board launched a new online project with USA Today that teaches middle school and high school students about economics and personal finances by challenging them to construct a newspaper front page.

Students are provided with instructions and a template of the front page of The Fed Today. Over four weeks, they are expected to consult the Federal Reserve's recently redesigned education Web site--FederalReserveEducation.org--for information needed to complete all of the elements of the page, including headlines, photos, captions, graphs and statistics. The project helps teachers meet national and state academic content standards for high school economics and personal finance courses. It may be found at: http://www.usatoday.com/educate/federalreserve/index_new2.html

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Fidelity National Financial Inc., Jacksonville, Fla., announced its LSI Market Intelligence division is now offering a Natural Disaster Condition Report to lenders nationwide. Compiled using the company’s national network of nearly 30,000 real estate professionals, this inspection report provides lenders with detailed information regarding the condition of a specified property in the aftermath of a natural disaster.

The Natural Disaster Condition Report helps to determine the existence and exterior condition of subject properties.  Exterior structure features inspected for this report often include roof, siding, structural stability, garage, doors, windows and more. In addition to stating whether damage to specific exterior features has occurred, the report provides percentage ranges that indicate the degree of that damage and a photograph to support those findings.
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Record numbers in market tightness and sales volume, combined with still strong numbers in the debt and equity financing indices showed the improvement in the apartment market from April to July, the fifth time in the survey’s six-year history that all four indexes showed improvement, according to the NMHC.

Low interest rates fueled homeownership increases during four straight quarters of strong apartment indices while the “sluggish job market recovery” kept inflation concerns at bay and interest rates at lower levels.

Gleb Nechayev, senior director at Torto Wheaton Research, Boston, said average pricing of rental apartment properties is being driven by condominium pricing, particularly in important large states such as California or Florida, where a substantial amount of investment and development capital has shifted. “Just follow the money,” Nechayev said. “California’s and Florida’s dollar volume share of new multi-housing completions has increased from 29 percent in 2002 to 37 percent today. Part of this, of course, is a function of rising construction costs, but there is a comparable rise in unit volume as well. In terms of type of product, the dollar volume share of townhouse/condominium completions has increased from 44 percent in 2004 to 54 percent this year.

According to New York-based Real Capital Analytics, transaction volume increased in each of the four major real estate sectors, but the share of apartment transactions grew continuously from 22 percent in 2002 to almost 30 percent today, mainly at the expense of retail. “Geographically, multi-housing capital is flowing to the hottest housing markets: California, Florida, Nevada, District of Columbia, Maryland and Virginia," Nechayev said. "The share of these markets in transaction volume increased from less than 30 percent in 2002 to about 45 percent today.”

However, Jim Wiener, managing director at Mercer Oliver Wyman, a financial services and risk management consulting firm headquartered in New York, said there is potential risk in the multifamily market, as well as the commercial and residential markets based on a rapidly rising interest rate environment. “It depends on the financing structure of multifamily properties,” Wiener said. “If it is relatively short term, then an interest rate adjustment is going to probably catch up faster than a rent adjustment. If it is relatively long term and it has an equity component to it, then the longer term the cap rates will effectively catch up more rapidly than the financing costs will catch up.”

Nechayev said that unlike other property types, apartment pricing is affected by both the “risk-free rate on the capital side and by the mortgage rate on the fundamentals side.”

“The recent drop in apartment cap rates, particularly over the last 12 months, might make the pricing of an average apartment asset more vulnerable to rising interest rates than ever before,” he said. “As interest rates rise and multi-housing capital flows slow, apartment appreciation will have to rely more on rental income growth. Condo conversions may no longer work as an exit strategy, and many of the currently hot housing markets will likely cool. If this scenario plays out, we should begin seeing rising multi-housing cap rates next year, as well as greater variation in both the direction and magnitude of cap rate movements across individual markets.”
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Hall provided $8.49 million to CGD Houston, LP for the acquisition and repositioning of a 132-room property, which will become a Hotel Indigo in Houston. Partners of CGD Houston LP include Capri, Inc. of Tucson, Ariz. and Gustin Property Group LLC of Albuquerque, N.M.

The hotel is located in the Galleria area in Houston. After renovation, the hotel will contain 4,100 square feet of meeting space, a restaurant and lobby bar, fitness center and a day spa. “We consider the new Hotel Indigo flag to be well suited for the Galleria area and also believe the area’s dense existing developments will optimize our advantage as far as competitors entering the marketplace,” said Mike Jaynes, senior vice president of Hall Financial Group.

Hotel Indigo will be managed by Driftwood Hospitality Management LLC of Jupiter, Fla., which also manages the River Terrace Inn. Hall Financial provided Gustin Property Group, LLC with first lien financing for the construction of the River Terrace Inn in Napa, California.

In Syracuse, Hall Financial Group provided a $17 million first mortgage loan to Marx Syracuse LLC, to refinance the 278-room Radisson Hotel & Conference Center at The Marx. “Since its restoration, the facility now resembles an upscale boutique hotel,” said Donald Braun, president of Hall Financial Group. “The quality of the renovation, along with the Radisson flag and the hotel’s prominent location in the city’s downtown and university section, will place the hotel as a dominant player in the Syracuse market.”

Braun said financing of this project required flexibility and creativity in structuring the right deal for the owner. “Not being constrained by deal templates or lengthy deal approval processes certainly helped in this transaction,” he said.

The Hall Financial Group provided $6.1 million in first lien financing for the construction of an 85-room Hilton Garden Inn in Tallahassee, Fla., on behalf of the Carlton Hospitality Group. The new Hilton Garden Inn Tallahassee, located within three miles of downtown Tallahassee, is near the State Capitol Complex, Florida A&M University, Florida State University and the Civic Center.

With expertise in the local market, Carlton Hospitality Group developed and owns a Comfort Suites Hotel in Tallahassee and has built several other limited service hotels in the Southeast. Pride Construction Inc. has been named general contractor. The construction firm completed two other similar hotels in the area and has a third underway.

Hall Financial also closed on a $10 million first lien financing to Muer Management for the construction of a 117-room Radisson Hotel in Carteret, N.J. Mike Ray, principal with Muer Management, said the loan was “a rather complex financial structure that included both an SBA loan and mezzanine financing.”
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Mortgage brokers in Nevada can now choose from six self-study distance learning courses offered by CampusMBA to meet the 10-hour annual continuing education requirements. Those courses are:

• Essentials of Residential Underwriting (Web-based course);
• Fair Lending Essentials (Web-based course);
• Fraud Detection and Deterrence (Web-based course);
• Introduction to Manufactured Housing (Web-based course);
• Mortgage Banking Primer (Web-based course); and
• Real Estate Law (Print-based course).

"Continuing education requirements, like those in place in Nevada, are vital to ensuring that mortgage professionals have the best, most up-to-date training and can therefore provide the best service to consumers," said Dan Thoms, senior vice president of education at MBA.  "CampusMBA is proud that the Nevada Department of Banking recognized the quality content of CampusMBA courses and has approved them for continuing education requirements."

CampusMBA offers more than 25 courses that meet continuing education requirements for real estate finance professionals in 22 states. To learn more about CampusMBA, visit www.campusmba.org/ce or contact Jennifer Ridings at jridings@mortgagebankers.org or (800) 348-8653.
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The first annual Corporate Diversity Leadership (CDL) Awards will be presented to the winners at MBA's 92nd Annual Convention and Expo in October.  Awards will be given in two categories to acknowledge both the best overall program and the diversity champion of the year. An award winner and honorable mention may be awarded for each of two classes within each category: national impact and regional/local impact.

"It is important for the mortgage banking industry to work to close the minority homeownership gap, and a key step in that process is for companies to identify and implement ways to increase the diversity in their own employee base," said Jonathan Kempner, president and CEO of MBA. "With a diverse workforce that more closely reflects the communities that companies serve, our industry will be better able to help all consumers achieve the dream of homeownership. The CDL awards recognize companies that are dedicated to this goal."

The CDL Awards will be given in two categories. 

The Best Overall Corporate Diversity Program Award category recognizes the corporate diversity programs within real estate finance companies that best exemplify innovation and effectiveness, and include both employee- and customer-focused initiatives. Award selection will be based on the following:

• Program development and organization history;
• Organization and employee acceptance;
• Obstacles overcome while implementing the program;
• Creativity and innovation in program delivery, marketing and assessment; and
• Beneficial impact to your organization and the mortgage banking industry.

The Diversity Champion of the Year Award category recognizes an industry professional who facilitates, advocates, and promotes diversity within the industry, his or her company and the community. Award selection is based on:

• The role nominee has played in developing and/or launching diversity initiatives;
• Specific obstacles and/or challenges overcome; and
• Outstanding accomplishments and/or innovative projects completed during the past year.

"So many companies in our industry, both commercial and residential, have innovative programs and initiatives designed to broaden the diversity of their workforces," said Jeannette DeLaGarza, senior vice president and managing director with Wells Fargo Bank and a member of MBA's Diversity Committee. "The CDL Award program is a way for MBA to shine the spotlight on companies and individuals who are leaders in this arena."

Nominations will be reviewed by a selection committee comprised of representatives from MBA's Commercial and Residential membership, the Chair of the MBA Diversity Task Force, a representative from the U.S. Department of Education, and a representative from Department of Finance of Howard University.

Winners will be notified in September and award presentations will take place at MBA's
92nd Annual Convention & Expo from October 23-26 in Orlando, Fla., and all winners will also be recognized during MBA's Commercial Real Estate Finance/Multifamily Housing Convention & Expo February 5-8, 2006 in Orlando.

All entries must be accompanied by an application fee of $100 ($150 for nonmembers). All fees are donated to the Path for Diversity Scholarship program. Visit www.campusmba.org/CDLawards to download the application.
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Both companies were acquired earlier by ISO, headquartered in Jersey City, N.J., a nationwide provider of risk management products. In June, ISO combined Sysdome, based in Calabasas, Calif., and AppIntelligence, based in Weldon Springs, Mo., into a single unit, now known as Interthinx. The new company serves as ISO’s fraud division.

"Our mission is to help lenders manage loan quality and discourage fraudsters' assaults on a lender's operations with tools that integrate critical information analytics with their own fraud-detection capabilities," said Kevin Coop, president of Interthinx. "Our industry is increasingly focused on real-time loan origination and fast turnaround for underwriting as a benefit for home buyers. By combining the collective data resources and industry experience of Sysdome and AppIntelligence, the Interthinx unit of ISO has created an unparalleled weapon to fight 21st century mortgage fraud."

Mike Zwerner, Interthinx’s vice president of business development, told MBA NewsLink that even as Sysdome and AppIntelligence competed against each other, they discovered points of commonality.

“Even though we had competed head-to-head for some time, when ISO looked under the covers they discovered complimentary strengths. It was a good match,” Zwerner said. “For example, AppIntelligence’s DISSCO product line is a very thorough, forensic tool, using a lot of data with that tool, while Sysdome’s Electronic Loan Review was a more front-end exception based report. Now we can go to our clients and sell them either product line, depending on their needs.”

Between the pre-merger companies, they have more than 1,100 combined customers. “Not every customer uses our products 100 percent, but pretty much 100 percent of lenders use one of our products in one way or another,” Zwerner said. “We have a significant market share.”

Differences exist—and persist. Both companies have different identity detection solutions, Zwerner said. Additionally, he noted that both companies were “very cognizant” of concerns from customers of both companies that they would feel a sense of “dilution.”

But he added that things are “going pretty well. We quickly have overcome our differences and realize that we’re much better off together than apart, for both our own needs. That’s why we came up with the new name.”

For two high-tech companies, the name change was decidedly simple. “We had two choices. We could have named our company based on what we do, such as Loan Verify, or Fraud Catcher. Or we could go with something more general, that doesn’t necessarily say what we do,” Zwerner said. “The challenge was all the URLs that we wanted were taken. So after a few weeks of meetings and roundtables and customer focus groups, we settled on Interthinx.”

The name comes from two words, Zwerner said. “The ‘Inter’ is the data inter-relationships that we use to detect and find fraud for our lenders, and how they inter-relate. The ‘thinx’ is more intelligence data relationships…You can spend a lot of money having marketing consultants come up with a name. We came up with in internally with customer input.”

Which is not to say that the Sysdome and Appintelligence names will disappear. “We will continue with the same brands, because those two brands still have some equity, while Interthinx does not yet. Over time, the emphasis will change,” Zwerner said.

The new company recently updated its data security database. “So our infrastructure, which isn’t the sexiest thing, is our first priority,” Zwerner said. “A lot of behind the scenes customer care and infrastructure is what we’ve worked on in the past two months. Going forward, we are looking at new products and services.”

And getting new customers. Last month, Interthinx announced a partnership with The Dollar Law Firm, developer of Mortgage Fraud Blog (www.MortgageFraudBlog.com), as exclusive providers of news content for the Mortgage Bankers Association’s Mortgage Fraud Against Lenders Resource Center (http://MBAfightsfraud.mortgagebankers.org). The Center provides a resource library of reports and helpful links, including a comprehensive list of state and federal agencies where lenders can file reports of fraud, relevant legislation and regulations and a calendar of educational programs focused on fraud.

The Mortgage Fraud Blog website issues timely information that empowers lenders, brokers and other mortgage professionals in their pursuit of enhanced loan quality and fraud prevention. Dollar will provide the Resource Center with information on fraud against mortgage lenders, including news of emerging fraud schemes and reports on state, local and federal law enforcement activities.

“Mortgage professionals will benefit from being able to access and leverage current fraud news quickly and easily from within the MBA’s website,” Coop said.
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