The yield on 10-year Treasury notes rose to 4.73 percent by mid Tuesday afternoon—seven basis points higher than the rate on Monday. The fed funds futures market fully expects the Fed to raise the fed funds rate to 4.75 percent on the next Federal Open Market Committee (FOMC) meeting March 28. The chance of another 25 basis point increase to 5.00 percent at the May 10 meeting rose to about 90 percent from just over 50 percent last Friday.

(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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The average contract interest rate for 30-year fixed-rate mortgages decreased to 6.31 percent from 6.42 percent, with points decreasing to 1.13 from 1.14 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The rate eased back after reaching its highest rate since July 2002 the previous week.

The average contract interest rate for 15-year fixed-rate mortgages also fell, to 5.99 percent from 6.06 percent, with points decreasing to 1.09 from 1.19 (including the origination fee) for 80 percent LTV loans. The average contract interest rate for one-year adjustable-rate mortgages (ARMs) increased to 5.68 percent from 5.64 percent, with points decreasing to 0.86 at 0.96 (including the origination fee) for 80 percent LTV loans. 

The seasonally adjusted Market Composite Index fell to 565.0, a decrease of 1.6 percent on a seasonally adjusted basis from 574.4 one week earlier. On an unadjusted basis, the Index decreased by 1.6 percent compared with the previous week but was down by 13.8 percent compared with the same week one year earlier. The four-week moving average for the seasonally-adjusted Market Index was down by 0.2 percent to 574.0 from 575.3. 

The seasonally-adjusted Purchase Index decreased by 2.3 percent to 393.6 from 403.0 the previous week. The four-week moving average is down by 0.4 percent to 401.5 from 401.9.

The seasonally adjusted Refinance Index decreased by 0.6 percent to 1574.5 from 1583.6 one week earlier. The four-week moving average for this index is down by 0.2 percent, to 1588.8 from 1593.4. The refinance share of mortgage activity increased to 38.1 percent of total applications from 37.7 percent the previous week, while the ARM share of activity decreased to 28.3 percent of total applications from 28.8 percent the previous week. 

Other seasonally adjusted index activity includes the Conventional Index, which decreased by 1.4 percent to 833.4 from 845.2 the previous week; and the Government Index, which decreased by 4.4 percent to 117.4 from 122.8 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.
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Tom Lorenzini, managing director in Tremont's Chicago office, arranged the 10-year, $43 million non-recourse loan, which provided a nearly 70 percent loan-to-value ratio and was funded through one of Tremont’s correspondent lending relationships. The name of the correspondent was not disclosed.

The loan has an initial interest-only period with a 30-year amortization. The mortgage carries an interest rate in the mid-5 percent range.

“The loan structure will allow for principal reduction without penalty as additional homeowners buy shares in the cooperative and make the transition from renters to shareholders," Lorenzini said. "The seller was extremely concerned about timing and we met the challenge by closing in 45 days from the date of application.  We continue to see a trend in the conversion of adult manufactured housing communities to resident-owned communities."

Built in phases in 1974 and 1984, the property encompasses 127 acres in Pinellas County. The homeowners association was assisted in the acquisition and conversion to a cooperative by Community Services Group. An estimated 45 percent of the residents became shareholders with the remainder choosing to remain as renters in the community.

The property consists of 946 homesites and maintained a 99.9 percent occupancy level. Amenities at the age-restricted community include three clubhouses, three swimming pools, three lakes, a fishing pier, tennis courts, laundry facilities, a fitness center, shuffleboard courts, a putting green and a golf cage.
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Whether you're in quality assurance, fraud investigations, production, senior management or the general counsels’ office, this conference will equip you with the contacts and knowledge to protect your company, and your company's bottom line, from the threat of mortgage fraud against lenders.

As everyone in the mortgage industry must be apprised of current fraud issues, this conference is appropriate for all. However, quality assurance professionals, underwriters, loan producers and secondary marketers are specifically encouraged to attend this important event.

Register Today
To register, download a registration form at http://www.mortgagebankers.org/conferences/pdf/M2602068_registrationform.pdf;  register online at http://store.mortgagebankers.org/ProductDetail.aspx?product_code=M2602068/REGIS; or call (800) 793-6222. Be sure to register before May 1 to save on MBA member and nonmember registration fees.

Hotel Information
The Palmer House Hilton, 17 East Monroe Street, Chicago, Ill., 60603; (312) 726-7500
MBA-negotiated rate: $219 single/double
The cut-off date for MBA's negotiated hotel rate is April 24.

Network with Attendees
Conference sponsorship is the ideal vehicle to grab the attention of this important audience and position your company as a leader in the industry. For more information contact Mark Brady at (202) 557-2790 or mbrady@mortgagebankers.org.
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Participating in the 2006 MBA Compensation Survey Program, developed and administered by McLagan Partners and sponsored by the Mortgage Bankers Association, allows organizations to benchmark their current compensation levels against competitive market data in order to align their pay philosophy with current trends.  

McLagan Partners has implemented several exciting enhancements to the compensation survey program this year, which create more flexibility, capture higher quality data and better serve the needs of our members. The 2006 MBA Compensation Survey also profiles more than 300 positions across all lines of business and job families.

To secure your company’s participation in this valuable survey program, please register today. Click here for a promotional flyer on the study and registration form. Registration and participation is required to receive the results, and MBA members receive a discount on the registration fee.

The survey questionnaires are sent to all registrants by the end of February. Publication of the results is anticipated for mid-summer.

If you have general questions regarding the 2006 MBA Compensation Survey Program, please contact Marina Walsh of MBA’s Research Department at mwalsh@mortgagebankers.org or (202) 557-2817. For specific information about the survey, please contact Rob Northway of McLagan Partners at rnorthway@mclagan.com or (203) 602-1234.
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The 2001 attacks triggered a rethinking in design and construction of skyscrapers. Plans for dozens of towers worldwide ended up in the trash bin, with few financiers and many governments unwilling to add any tall structure to skylines that could be considered a new target.

However, demands for creative use of space and an indefatigable spirit of defiance of convention—the same spirit that created the first skyscraper in Chicago in 1885—have resurrected skyscrapers from the trash bin and back into the commercial real estate mainstream.

“After 9/11, you might have thought that was the end of tall buildings,” said Denise Chevan, editor of Building Magazine U.K., London, speaking here at MIPIM, Europe’s largest commercial real estate conference. “In fact, the reverse happened. Today, there are remarkable structures going up around the world.”

Indeed, ambitious new projects are in the pipeline. Designs represent myriad hybrids—gone are the one-purpose office tower. Today’s skyscrapers accommodate multiple commercial “food groups,” with office, retail, hotel and residential/multifamily occupying various parts of the structure to maximize potential.

An added element to the skyscraper is an enhanced “green” element. Kenneth Yeang, director of Llewelyn Davies Yeang, London, incorporates a strong environmental bent in his tall-building designs, both internally and externally. He said he regards skyscrapers as an opportunity not just for building design, but “urban vertical” design.

“If you ask an architect to design a low-rise building, he would have atriums and interaction between floors,” Yeang said. “So the challenge is, can we build high-rise buildings as we would a medium- or low-rise? Of course we can.”

Yeang decried current skyscraper design, calling it uncreative. “There should not be floors repeated ad nauseum,” he said. “There should be interactivity throughout the floors—open spaces, museums, shopping, even parks. There should be secondary and even tertiary elevator systems that emphasize connectivity between sections and creation of comfort.”

Yeang designs high-rises using a “vertical greening” concept, intertwining green areas that integrate the organic and the non-organic. “It enables species integration and migration and a diverse ecosystem,” he said. Other design elements emphasize unique design and awareness of the surrounding area. “When you get on an elevator in these buildings, you know you’re in Singapore, or Kuala Lumpur, and not in some dreary elevator anywhere in the world,” he said.

But Yeang limits the high-rise concept to 50 or 60 stories, asserting that anything taller exponentially increases costs and forces replication of key infrastructure such as plumbing and power generation. That hasn’t deferred French conglomerate Lafarge Group to develop an “eco-friendly” skyscraper, called “Hypergreen,” an 800-foot tall structure that emphasizes sustainable development, integration and environmental consciousness.

French architect Jacques Ferrier designed the Hypergreen concept to minimize energy consumption while generating clean energy. The concept incorporates extensive use of renewable energy sources, such as earth cooling tubes, geothermal heat pumps, photovoltaic cells and wind turbines, located at the top of the building where the wind is strongest.

Additionally, the building’s design emphasizes energy performance, based on a separation of the gravity load and wind bracing. The exterior features a honeycombed grid skin façade, using earthquake-resistant concrete, which acts as a sunshade and supports photovoltaic panels. Additionally, the entire building can be prefabricated, which theoretically reduces onsite time and labor.

“The Hypergreen project presents the skyscraper as a sustainable feature of the urban landscape,” Ferrier said. “It is not only fully integrated into the landscape, but also enhances it.”

Meanwhile, progress is underway on dozens of projects worldwide. Already under construction is the 118-story Moscow City Tower, a structure that will redefine the Russian capital’s skyline. Located near the Kremlin, the mixed-use building will include 50 floors of office space, with 19 floors of apartments and two floors of retail and leisure space (including a casino) that will be a home and workspace for 25,000 people daily. The builders, STT Group, claim that when finished, the building will be the largest naturally ventilated structure in the world.

In Manchester, England, construction begins later this year on Europe’s tallest residential tower, developed by Inacity. The 60-story tower, at an estimated cost of $486 million, will be a mixed-use structure, with a luxury hotel occupying the first 18 floors, a “sky bar” on the 19th floor, and 400 apartments occupying floors 20 through 60.

“We are anticipating much commercial interest in the land surrounding the development, which will signal a great future for both the city and the region,” said Bob Ross, director at Inacity. “We intend to set the standard for mixed-use development throughout Europe.”

In Turkey, a partnership between Dubai International Properties and the Istanbul Metropolitan Municipality announced plans for a pair of spiraling towers of at least 70 stories. The towers, whose facades are designed to twist 90 degrees from the ground to the top (so, for example, the bottom floor faces east while the top floor faces north) is part of a $5 billion joint venture.

Hong Kong, already home of one of the world’s most impressive skylines, will get its tallest building in 2010, with completion of the International Commerce Center, a 118-story tower that will be the heart of a reclamation project in West Kowloon. The 232,250 square-meter mixed use tower will include office space, a 300-room Ritz-Carlton hotel on floors 101-118, an observation deck on the 90th floor and retail space.

Nowhere is the ambition greater, or the designs more audacious, than in the seven principalities that make up the United Arab Emirates. Across the Middle East, and in the UAE in general, more than $300 billion in building projects are in various phases; in Dubai, UAE, nearly 1,000 projects are in the pipeline. Not surprisingly, the cost of land in Dubai has skyrocketed, according to CB Richard Ellis, rising by nearly 200 percent over the past 18 months.

In Paris, the prototypical European city on which Washington, D.C. was based—with buildings no higher than 12-15 stories so as not to obscure view of the landmark Eiffel Tower—the skyline has undergone a vertical transformation over the past two decades. Bernard Bled, director general of EPAD, Paris, said the City of Light is playing “catch-up,” in a big way.

“In France, we’re getting ready to launch new buildings that will be bigger and more original in design,” Bled said. “We started with a very traditional blueprint, with the same model—100 meters high, conventional design, and we’ve used it time and again, even if it was a bit tedious. So we wanted to re-launch and redesign. We want to remain relevant and ensure that they are of the best quality.”

Bled said the new Parisian architecture hopes to recapture the spirit of the Eiffel Tower. “At the time, it was very original. And we thought we could do something different too,” he said. “So we are looking at real monuments. We need to be inventive, be crazy, be mad, to try to make us dream—do something different and be totally daring. I think architects like this—they want to be bold and inventive, in a country that has its own culture and methods. Likewise, we need to incorporate sustainable development. It’s one thing to put up a building, but it’s another thing to make them livable.”

Tall buildings are essential in an urban setting, Bled said. “Populations are growing and require the ability to combine many activities in one space. We are reaching the stage where tall buildings can be not only part of a business district, but where people would want to live. It should not shutter at 5:00 p.m. and empty out, turning it into a ghost town over the weekends. We want people to feel part of a fulfilling environment that is conducive to multiple activities.”
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