The AFP Survey, sponsored by New York–based JPMorgan Chase, found the majority of respondents believe their organizations are only somewhat prepared with business continuity plans. More than half (55 percent) said their business is somewhat prepared, while 8 percent said their organization is not prepared.

"There is a level of uncertainty among treasury and finance professionals that their business' continuity plans are in a state of readiness that will enable them to continue operating in the case of an event similar to the two hurricanes," said Jim Kaitz, president and CEO of the Association for Financial Professionals.

The survey also revealed that 47 percent of finance professionals said Hurricanes Katrina and Rita affected their organization’s operations; 12 percent "significantly" impacted and 5 percent said their organization suffered little or no impact. Nearly half of the respondents who said their organizations' operations were impacted, 24 percent said their organization recently tested its business continuity plans as a direct result of the hurricanes. Another 26 percent plan to test their business continuity plans while 50 percent of organizations have no such plans.

“We see four critical dimensions to a rapid recovery: people, geographic location, communication and technology,” said David D’Silva, receivables executive at JPMorgan Chase Treasury Services. “Contingency provisions and business continuity must include the entire business process, including customer service and other support functions, in addition to operational contingency.”

Respondents said back-office operations (72 percent) were more important, followed by communications (68 percent), offline business operations (65 percent) and corporate communications (58 percent).
(Back To Top)

The average contract interest rate for 30-year fixed-rate mortgages increased to 5.98 percent from 5.94 percent on week earlier, with points increasing to 1.22 from 1.21 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. This is the highest rate since March 25. 

The spread between the average contract interest rate for 30-year fixed rate mortgages and for one-year adjustable-rate mortgages (ARMs) decreased to 72 basis points. This is the lowest spread since March 9, 2001.   

The average contract interest rate for 15-year fixed-rate mortgages remained at 5.55 percent, with points increasing to 1.19 from 1.15 (including the origination fee) for 80 percent LTV loans. The average contract interest rate for one-year ARMs increased to 5.26 percent from 5.13 percent one week earlier, with points decreasing to 0.96 from 0.98 (including the origination fee) for 80 percent LTV loans. 
 
The Market Composite Index stood at 694.8, a decrease of 2.6 percent on a seasonally adjusted basis from 713.5, one week earlier. On an unadjusted basis, the Index decreased by 2.6 percent compared with the previous week but was up 5.4 percent compared with the same week one year earlier. The four-week moving average for the seasonally-adjusted Market Index is down by 2.2 percent to 725.4 from 741.9. 

The seasonally-adjusted Purchase Index decreased by 0.9 percent to 469.5 from 473.8 the previous week. The Index’s four-week moving average is down by 2.2 percent to 481.7 from 492.7. The seasonally adjusted Refinance Index decreased by 4.9 percent to 2004.9 from 2107.4 one week earlier. The Index’s four-week moving average is down by 2.2 percent to 2143.2 from 2191.6.

On a year-over-year basis both the seasonally-adjusted Purchase Index and Refinance Index are higher.  The seasonally-adjusted Purchase Index is 7.4 percent higher than the same time last year while the Refinance Index is up by 2.9 percent.

The refinance share of mortgage activity decreased to 43.5 percent of total applications from 44.5 percent the previous week.  The ARM share of activity decreased to 29.5 percent of total applications from 29.8 percent the previous week. 

Other seasonally adjusted index activity includes the Conventional Index, which decreased by 2.6 percent to 1040.9 from 1068.9 the previous week; and the Government Index, which decreased by 2.6 percent to 117.2 from 120.3 the previous week. 

The survey covers 50 percent of all U.S. retail residential mortgage originations, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.
(Back To Top)

“Scott and his leadership team are leaders within the real estate finance industry.  Their support of MORPAC is a step towards continuing to strengthen our industry,” said MORPAC Chairman David Kittle, CMB.

When Greenlaw founded Merit Financial in 2001, he envisioned streamlining an unnecessarily complex loan process and creating a cost-effective simplified solution for borrowers—credit-challenged or otherwise. He began the company with only 16 people focusing on VA loans and in less than two years has grown the company to include a team of nearly 400 financial specialist and administrators that cater to a bevy of loan products—government, nonprime, second mortgages and or jumbos.

Expanding the scale of company campaigns is a top priority for MORPAC. For more information on MORPAC and requirements for establishing a company campaign please contact Julie Eddy, MORPAC director, at (202) 557-2808, jeddy@mortgagebankers.org; or visit www.morpac.org.

(This article does not constitute a solicitation of funds.)
(Back To Top)

The report said that there is a heated debate about the future of REITs, and REIT stocks in particular. “Some say that after a spectacular run in 2003 and 2004, when REITs delivered over 30 percent yearly returns, shares are now grossly overvalued. Others say that it is time to cash out on REITs altogether, as the real estate assets that REITs hold are generally overpriced,” said Gleb Nechayev, senior economist at Torto Wheaton Research (TWR), Boston.

"This confidence about superior long-term performance is not inconsistent with concerns that in the next few years REITs may not be able to repeat the stellar performance of 2003 and 2004,"  said Petros Sivitanides, investment director at Property Investments-K.E.D. in Greece. "I don't know whether the argument that there is general lack of confidence is valid but if that is the case it may be due to fears of rising interest rates and their potential negative impact on the economy and real estate."

In their report, titled “Thus Far, REITs are Winning ,” Nechayev and Sivitanides found that REITs consistently beat all alternative investment vehicles in average annual returns, including direct real estate investments, from 1978 to 2004. REITs also showed better risk-adjusted returns over all the stock market indices and bonds in the past 27 years.
 
According to the report, REITs beat direct real estate investments, as represented by the National Council of Real Estate Investment Fiduciaries (NCREIF). REITs emerge as the leader in absolute and risk-adjusted returns. The TWR researchers said REITs should not be discounted as a long-term investment, especially as part of a well-diversified investment portfolio.

The National Association of Real Estate Investment Trusts (NAREIT)reports that REIT stocks are outpacing other market benchmarks for a sixth consecutive year.  "There is no reason to believe they will not continue to perform as they have over the course of three decades [a 14 percent historical compound annual return for the 30
years ended Sept. 30]," Jay Hyde, spokesperson at NAREIT.   

Nechayev and Sivitanides said REIT managers can move capital quickly to real estate when the market is in recovery, creating strong positive demand shocks with instant impact on REIT stock prices. The same quick readjustment can work when the property market enters a downturn as well. The TWR researchers noted that REIT stock prices can reflect greater appreciation of their property holdings compared to the assets included in the NCREIF database. Also, specialization by REITs can make them more adaptable to changing market conditions and financial or regulatory environment within the particular sectors. Better management and asset selection from greater investment discipline is also advantageous for REITs, the analysts reported.

S&P/Citigroup BMI Indices showed that, globally, countries had minimal variances between their listed property companies and their listed REITs, with a major exception in Asia/Pacific countries. Overall, the performance of global listed property companies increased by 5.4 percent in the third quarter of 2005 compared to the second quarter and global REIT performance pulled in a 2.7 percent increase.

However, ResearchWorldwide.com noted that Asia Pacific countries had a 1.2 percent REIT performance compared to a 10.1 percent improvement in listed property companies performance in the third quarter of 2005 compared to the previous quarter.

"Globally, the opportunities to invest in listed real estate companies are increasing, with REIT structures in approximately two dozen countries at the moment," Hyde said. "Observers believe the United Kingdom and Germany will be next, perhaps as soon as next year. This gives investors a world of real estate to invest in."

"Globally listed REITS may outperform U.S. REITs because the U.S. real estate market is the most informed mature and efficient," Sivitanides said. "Efficiency and greater information among the players in the markets limits achievable returns. Within this context I don't think that global numbers reflect the future of U.S. REITs. I don't think also that they will affect U.S. REITs either unless we assume a huge amount of capital flows abandon US REITs in favor of foreign REITs."

In the U.S., TWR’s data showed REIT stocks delivered higher returns than direct real estate investments over the long-term, 400 to 600 basis points higher. The report attributed the strength of consistent REIT returns to higher growth rates in stock prices compared to property prices.

Despite positive numbers from REITs, TWR researchers expect moderate economic growth and higher long-term interest rates in the immediate outlook, translating to lower returns over the next several years for direct real estate investment. "Rising rates signal a strengthening of the economy, that is generally favorable with respect to corporate America's demand for space," Hyde said.

“One thing is clear, equity REITs, as a group, have performed very well over longer periods,” Nechayev said. “If there is indeed a lack of confidence in REITs, I think it might have more to do with their short-term or medium-term future which would be understandable given the outlook for the economy, interest rates, and property-level returns.”
(Back To Top)

In the October issue of Mortgage Banking magazine, “Trouble on the Links,” by Toronto-based freelance writer Albert Warson, explains the grim future of golf courses. Because of overbuilding, golf courses are selling for deep discounted process. As a result, lenders are being more conservative and developers are advised to include houses on them making them mostly likely to succeed.

For more information on Mortgage Banking , visit http://www.mortgagebankingmagazine.com
(Back To Top)

The loan funded the acquisition of the properties from two separate sellers. Pierce Plaza, a retail/office property, had 25 percent of its retail space vacant because of a recent lease rollover.

One office tenant occupied one-third of the center. Love Funding cross-collateralized the property with Charleston Buffalo Shopping Center, a property well located and with a high occupancy, to mitigate the single tenant risk and present a higher combined occupancy profile.

“This was no ordinary loan,” Leviton said. “Besides the occupancy issues with Pierce Plaza, there were many timing challenges to overcome for a simultaneous closing of the acquisitions and the loan. By structuring the loan as we did, the borrower realized a cash-on-cash return of more than 12 percent, and we were able to secure an 80 percent loan with five years of interest-only payments.”

Meanwhile, Love Funding closed on a $6.49 million new construction loan for the development of Londontown Apartments – Phase II in Knoxville, Tenn. Tammy Tate, vice president of Love Funding, arranged the financing for the borrower, Londontown II California Associates LP.

The loan closed last month with financing provided through the FHA 221(d)(4) loan program with a 5.5 percent fixed interest rate for a 40-year term. The loan was further enhanced by a GinnieMae security.

Londontown Apartments Phase II, a proposed 81-unit property, will consist of townhouse and garden units. Each unit will range from 785 to 1,258 square feet with anticipated rents of $705 to $850. Situated on 6.98 acres, the property will offer a total net rentable area of nearly 90,000 square feet.
(Back To Top)

Have you started using your MBA Membership Directory?  If you have, then you have experienced first-hand the value of the information now available at the stroke of a finger. If not, start today!  To receive your member access, please contact Venita Murray, senior membership specialist, at (202) 557-2845 (vmurray@mortgagebankers.org).

Please take a moment to review your company listing.  MBA updates the Directory monthly, and you can make changes to your listing at any time.

Updating your profile is easy.  Just visit http://mymba.mortgagebankers.org and enter the username and password that was provided in a recent email from Venita Murray.  At this site, primary contacts or a representative of your company can:

* Update company information;
* Register additional users to the Directory (all staff members can use one CD to load the Directory).
* Manage MBA subscriptions such as Mortgage Banking magazine, and more.

Changes made to corporate profiles are uploaded to the membership directory on a weekly basis.  Each month, users are prompted to update their directory.  Accepting this prompt will load all changes that have been made and will provide you with the most up-to-date details regarding not only your company, but all MBA members.  Keeping your company profile updated guarantees that the most current information is being displayed and accessed by your peers in the industry.

But, please don’t stop there: share this valuable networking tool with all of your employees. Simply take a moment to register any and all staff members via http://mymba.mortgagebankers.org and pass your CD along to other staff members so that they too can download the Directory.
(Back To Top)

The Workshop features valuable sessions, such as "Innovative Membership Strategies," "Legislative and Regulatory Highlights" and "Non-Dues Revenue Solutions." All aim to provide new ways to remedy old challenges. New to the program is a session, "Building for the Future," which addresses changing industry demographics and the need to stay relevant through diversification of members and employees. Also, MBA's public affairs staff presents "Managing Media Relations," using Home Mortgage Disclosure Act (HMDA) data and resulting reports as a test case. 

On October 21, working group breakouts are followed by an integrated recap session. On October 22, executives and managers have the opportunity to interact with their peers and hear from Doug Duncan, MBA's chief economist, who offers an economic forecast and a discussion on trends and their impact on the industry.

Renew acquaintances or make new contacts at the Welcoming Reception, and enjoy the Chairman-Elect Luncheon featuring Regina Lowrie, CMB, the first woman to chair MBA.

Click here to register online. If you have any questions contact Lisa Hazell at lhazell@mortgagebankers.org or (202) 557-2761.
(Back To Top)