This "elective" fair value approach was recommended by the Mortgage Bankers Association in a letter to FASB Chairman Robert Herz on March 12, 2004. (letter)

If adopted, this accounting change will permit lenders that use derivatives to hedge their servicing rights to recognize offsetting changes in their values for financial reporting purposes, without going to the effort and expense of qualifying their hedging activities for hedge accounting treatment under FAS 133, Accounting for Derivative Instruments and Hedging Activities.

In addition, the FASB released two additional Exposure Drafts: (1) Accounting for Transfers of Financial Assets, to clarify the derecognition requirements for financial assets and (2) Accounting for Certain Hybrid Financial Instruments to eliminate a temporary exemption from Statement 133 for certain securitized interests and to simplify the accounting for hybrid instruments. 

All three Exposure Drafts would amend FASB Statement No. 140, Accounting for Transfers & Servicing of Financial Assets and Extinguishments of Liabilities.

All three Exposure Drafts are available on the FASB's website at www.fasb.org . The FASB invites public comment on these and all Exposure Drafts.

The comment deadline for the Exposure Drafts is Monday, October 10.

(Alison Utermohlen is senior director of accounting and tax in MBA's government affairs group).
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InterFirstlink's closed-end fixed-rate program (called program 410) includes 10- and 15-year fixed-rate options. Its closed-end balloon program (called program 411) offers mortgage loans with a 30-year amortization and a 15-year balloon. The programs are eligible with all of InterFirstlink's full documentation first lien loans.

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Freddie Mac, McLean, Va., in its  Primary Mortgage Market Survey,  said 30-year fixed rate mortgages averaged 5.89 percent, with an average of 0.5 point, up from last week’s average of 5.82 percent. The average 15-year fixed rate mortgage was5.47 percent, with an average 0.6 point, up from last week of 5.38 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgage (ARMs) averaged 5.40 percent with an average 0.6 point, up fro last week’s average of 5.30 percent. One-year Treasury-indexed ARMS averaged 4.57 percent with an average 0.7 point, up from last week’s 4.47 percent.
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Arbor’s funding of a $2.5 million loan under Fannie Mae’s DUS product line refinanced a 99-unit apartment complex known as Copper Creek in Tucson, Ariz. The 10 year fixed-rate loan has two years interest only with 28 years of amortization afterward. It carries a note rate of 5.285 percent with a one year extended maturity feature.

The loan, originated by Aaron Abelson , director in Arbor’s Chicago office, was underwritten in Arbor’s full service Dallas office.

Michael Jehle, regional director in Arbor’s Bloomfield Hills office, originated a loan underwritten in Arbor’s full-service Chicago office. The $1 million loan for Williamsburg Townhouse Cooperative, St. Clair Shores, Mich., was financed under Fannie Mae’s DUS product line to refinance the 206-unit complex. The 10-year fixed rate loan amortizes on a 30-year schedule and carries a note rate of 5.42 percent.

“Our loan proceeds will allow the Cooperative to make significant capital improvements to their existing facilities,” Jehle said. He noted that the members of the Cooperative favored the low interest rate on the financing, which will help with unit upgrades. 

In College Point, N.Y., Arbor funded a $9.8 million commercial mortgage backed securities (CMBS) loan for the acquisition of an 80,000 square foot industrial building. The 10-year, fixed rate loan amortizes on a 30-year schedule, and carries a note rate of 5.42 percent. The loan was originated by Peter Blass, director, and underwritten in Arbor’s full-service Canonsburg office.

“The Borrowers Eastern Trio Products were looking for over six years for a new facility for their business and we were able to provide the financing for the acquisition so that they could expand their growing electronics business,” Blass said.

Arbor also announced the funding of a $2.4 million loan under its CMBS product line to refinance a 39,180 rentable square-foot industrial property known as Four Seasons Business Park in Houston. The 10-year fixed rate loan amortizes on a 30-year schedule carries a note rate of 5.53 percent.

The loan, originated by Abelson, was a 1031 exchange. It helped to structure a “complicated tenants in common (TIC) all in less than 30 days,” Abelson said.
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• Gen. Colin Powell, USA (Ret.) keynotes the convention’s Opening General Session on Monday, October 24. Powell, most recently Secretary of State under the Bush Administration, is one of the nation’s most celebrated military and political figures of our time.

• Former President Jimmy Carter keynotes the Third General Session on Tuesday, October 25. Carter, the nation’s 39th President and winner of the 2002 Nobel Peace Prize, is also widely known for his efforts with Habitat for Humanity, of which MBA is an active supporter and participant.

• Syndicated columnist George Will headlines the Chairman’s Luncheon on Monday, October 24. Will, whose column appears in The Washington Post and dozens of other publications, has been syndicated since 1974 and is a regular contributing editor of Newsweek magazine.

• Officials from Fannie Mae and Freddie Mac address the Second General Session on Monday, October 25. This session brings together executives from the GSEs to discuss how the changing business landscape is affecting your business and the industry. From new technologies to changing borrower demographics, the role of the GSEs is constantly evolving.

• Longtime basketball coach Pat Riley headlines the annual Sports Luncheon on Tuesday, October 25. Riley, most recently head coach of the Miami Heat, also had stints as coach of the Los Angeles Lakers and the New York Knicks.

• The annual Club MBA on Tuesday, October 25 features the dance music of K.C. and the Sunshine Band. Tickets are going fast for this event.

• MBA Chief Economist Doug Duncan delivers the keynote address for the Fourth General Session on Wednesday, October 26. Duncan will provide a forecast of our economic future and what it means to the industry. Additionally, he addresses the ongoing technology evolution of the real estate finance industry.

Registration is taking place now. For more information, visit the convention Web site at http://events.mortgagebankers.org/92nd_annual.
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Endorsement of the use of residential and commercial eMortgages, based on open standards, is a significant mechanism for simplifying the mortgage process and creating other efficiencies that will reduce costs for all market participants, including consumers, over the long-term, MBA said.

MBA will maintain its leadership position within the industry by establishing eMortgage standards and best practices, and applying its resources accordingly including its ongoing financial support of the Mortgage Industry Standards Maintenance Organization (MISMO), a not-for-profit subsidiary of MBA that develops data transfer and file specifications that span the $9 trillion residential and commercial real estate finance industries.

MBA will help its members stay "ahead of the curve," through advanced educational and training materials regarding eMortgages, said MBA Vice Chairman John  Robbins, CMB.

"This is a very important step for MBA," said Robbins, president and CEO of American Mortgage Network , San Diego, and chair of MBA's Board of Directors' Technology Steering Committee. "It reaffirms MBA's commitment of building best-of-breed solutions that will benefit the entire industry and ultimately the consumer as we move forward into the next era of truly paperless mortgages." 

Currently, MISMO offers a variety of products and services to develop, promote, and maintain voluntary electronic commerce standards for the mortgage industry. Its eMortgage Workgroup builds on the existing MISMO data standards, adding data elements and electronic signature capabilities to create an infrastructure for standardized fully electronic, or paperless, mortgages.

Also in existence is the commercial side of MISMO's eMortgage Workgroup which builds on the existing eMortgage standards to refine them for all phases of the commercial eMortgage value chain. For more information, go to www.mismo.org.

Additionally, the Secure Identity Services Accreditation Corporation (SISAC), another subsidiary of MBA, sets standards that provide the platform for industry-wide e-commerce secure identifications which allow industry firms to establish various levels of identity within the context of secure e-commerce transactions. For more information on SISAC, go to www.sisac.org.
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