A reading of below 50 indicates a contraction in the manufacturing sector. The ISM manufacturing index is based on a survey of purchasing executives at roughly 300 industrial companies.  It includes nine different sub-indices: new orders, production, employment, supplier deliveries, inventories, prices, new export orders, imports and backlog of orders. 

New orders, production and employment all weakened. Inventory continued to shrink, a trend that started last August. Businesses have pared back inventory in the face of weak consumer demand and are cutting back on new orders, production and employment. It is unlikely that businesses will increase their capacity until the inventory adjustment process has run its course. Unless demand picks up significantly allowing excess inventory to decline, elevated inventory will remain a drag for the production in the coming months.

Another bad news in the report was the jump in the index of prices paid, an indicator of how much firms paid for raw materials. This was the third consecutive month of increases to the highest reading since last August. The report points to a weakening manufacturing industry that is facing inventory overhang, softening demand and rising input costs.

The yield on the 10-year Treasuries hovered around 4.64 percent by mid-Monday afternoon, about the same as the rate on Friday.

(Orawin Velz is director of economic forecasting in the Mortgage Bankers Association’s economics and research department. She can be reached at ovelz@mortgagebankers.org.)
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WHO:
John Mazzara, CMB, president of Venture Development Inc., Edina, Minn.

Q: Tell us about yourself.
MAZZARA: I have been in the financial services industry since 1986. I started selling homes in 1986, became a CFP in 1989, and started my own mortgage brokerage in 1995. I am vertically integrated and run all three business with the help of my wife. My web sites are as follows: www.sold.mn (real estate), www.ventureloanapp.com (mortgage) and www.investmentadviser.com (financial planning).

Q. How long have you been a CMB?
MAZZARA: I completed my CMB in 2004. I have always had a quest for more knowledge. I have gone back and forth on whether or not to switch from a “broker” and become a “banker.” Venture Development Inc. is a Minnesota-based mortgage broker. The CMB program has helped me evaluate whether or not I should make the transition. It does a great job in dissecting the mortgage business and all the elements involved in running a successful "banker" operation.

Q: How has the CMB helped your career?
MAZZARA: It has opened my eyes to the business on a macro level. I really enjoyed the instructors and the class work. I think MBA has done an excellent job in creating the curriculum keeps it relevant to today's issues. I made better decisions about how to run my own business because of this program.

Q: What advice would you give to someone interested in pursuing their CMB?
MAZZARA: My advice would be "just do it"—I borrowed that quote from Nike. Once you complete the program, you will come away with a greater understanding of the mortgage business. You will come to know it from A-Z.

I run a small mortgage brokerage shop in Minnesota. At this time, I am going to continue on my brokerage path because of what I learned in the CMB program. If I worked within an organization, like a large mortgage banker, I would need to appreciate how all the components function and interact with each other. This program gives you that information. If you aspire to be the best and go further in any endeavor, you need to add value. Obtaining your CMB will add value to your career and to your employer. I would do it over again.

CampusMBA designations and certificates serve a dual purpose—they tell the world what you've accomplished in your chosen profession and they put you on the path to career advancement.

For more information about CampusMBA designations, visit www.campusmba.org/IndustryDesignations.
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For the past 18 months, Casey has been managing director and assistant treasurer of GMAC ResCap, where he has been responsible for liquidity management, global funding strategy and coordination of all investor partner relationship activities of the company. Prior to joining GMAC ResCap, Casey was senior vice president and treasurer of GMAC Residential in Horsham, Pa., responsible for enterprise finance, treasury funding, operations and services and bank relations. Before joining GMAC Residential, Casey held a number of senior banking and treasury positions at Merrill Lynch, Union Bank of Switzerland, Smith Barney and Mellon Bank.

Olson Joins String Board of Advisors
String Real Estate Information Services, Washington, D.C., appointed David Olson to its Board of Advisors. Olson is president of Wholesale Access Mortgage Research and Consulting in Maryland and previous recipient of the Industry Distinguished Service Award from the National Association of Mortgage Brokers and is a member of the Mortgage Bankers Association.

Since 1991, Olson has conducted studies and published research for the mortgage industry, including Home Equity Lines of Credit for the American Bankers Association, The Wholesale Directory and The Home Equity Loan Market Study. Prior to his own practice, Olsen was vice president and chief economist of SMR Research Corp. in New Jersey where he co-authored several studies on the mortgage industry.  

GE Real Estate Taps O’Stean as EVP
GE Real Estate, Stamford, Conn., appointed Greg O’Stean to executive vice president and managing director of hospitality for North America Lending. He is responsible for originating commercial real estate debt and equity investments for the acquisition, refinance and renovation of hotels and hotel portfolios from $10 million to more than $100 million.
 
O’Stean joins GE Real Estate from GE Capital Solutions, where he was senior vice president of franchise finance. He began his GE career in 2005 with the acquisition of Security Capital, serving as senior vice president of strategic relationships for Storage USA (a division of GE Real Estate). Prior to joining GE, he was vice president of acquisitions and development for Starwood Hotels & Resorts Worldwide, director of development for InterContinental Hotels Group and manager of the Real Estate Group of Ernst & Young.

Kennedy New SVP at First American Exchange
First American Exchange Co. LLC, Santa Ana, Calif., appointed Mary Kay Kennedy as senior vice president. She will oversee First American Exchange’s Northern California region, which has offices in San Jose, San Francisco, Walnut Creek, Sacramento and Fresno.

Kennedy, who has more than 23 years of experience in real estate law, worked for two San Francisco-area law firms and as assistant general counsel for MetLife in Foster City, Calif., from 1990 to 1999, prior to joining First American Exchange in 2003 as vice president and counsel for the Northern California region.

Sperry Van Ness Expands in Connecticut
Sperry Van Ness, Irvine, Calif., expanded its presence in the Connecticut commercial real estate market by aligning with the Connecticut Realty Group LLC.  Frederick Petrella and Tamara Peterson will serve as principle advisors and managing directors for Sperry Van Ness. The office is in New Haven.

Petrella specializes in sale and leasing of industrial and office properties in the New Haven and Eastern Fairfield County markets.  Over his 21-year career, Petrella has completed more than $240 million in commercial real estate transactions.

Peterson specializes in investment sales and leasing of retail properties in New Haven and Eastern Fairfield Counties. Over the past 18 years, Peterson has been a top performer in employee benefits sales to major corporations in the Tri-State area.

Workway Hires Wilson for San Diego Office
Workway, a Burbank, Calif.- based staffing firm specializing in serving the financial and other technical industries, appointed Kasey Wilson as an account manager for its newly relocated San Diego office. She will focus on all levels of staffing for the mortgage industry in the San Diego area.    

Wilson has experience as an account manager and recruiter for the mortgage industry, as well as a sales and marketing management background in retail environments. 

Rapid Reporting Appoints Deignan as VP of Operations  
Rapid Reporting, Fort Worth, Texas, announced that Andrew Deignan joined the company as vice president of operations. He will implement business initiatives as well as working with customers and existing employees. 

Prior to joining Rapid Reporting, Deignan was production manager at CellStar, a provider of logistics and distribution services to the wireless communications industry. Previously, he was COO and vice president of operations of 4G, an entertainment marketing company. Additionally, he managed data center operations for Bluestreak, a provider of digital marketing technologies and services. 

FNC Hires Four, Promotes Two
FNC Inc., Oxford, Miss., added four members to its sales and account management teams and promoted two others. FNC hired industry veterans Shawn Telford and Chris Adamson and promoted Shane Potter to manage FNC’s relationships with its lender clients. Marti Ryan, Jeffrey Little and Mark Nelson joined the FNC sales team.

Telford comes to FNC from settlement services company American Reporting Co., where he worked as the senior vice president of business operations. At FNC, Telford will work from Seattle, Wash., as the account manager for FNC’s Canadian accounts. Late last year, FNC partnered with Canadian data company Teranet to bring collateral management technology and automated appraisal review to Canadian banks.

Adamson worked as a retail branch manager and loan originator for First Tennessee Bank for several years before switching gears and teaching high school in Desoto County, Miss. She is based at the company’s headquarters in Oxford.

Potter, a former manager of FNC’s client services, recently transferred into the account management group, where he works closely with Wachovia Bank. A long-time member of the FNC team, began as a developer shortly after graduating college. He now works from Kalamazoo, Mich.

Ryan worked as a mortgage loan officer for Regions Bank in Oxford.

Nelson has worked at FNC since 2004 as a business analyst, where he coordinated the development of new system installations and supported upgrades. Previously, he worked in the high-speed Internet business.

Little worked for the privately owned financial planning firm StrategicWEALTH after graduating from college.
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“Investment strategies may be changing among office investors but their desire to won commercial real estate appears unwavering—and may have strengthened recently given the recent downward movement in the stock market,” said Peter Korpacz, director of global real estate research for PricewaterhouseCoopers, New York.

Indeed, despite homebuilding and home mortgage disruptions, office investors showed a growing interest toward acquiring non-core stable, well-leased assets in an attempt to earn higher returns last year.

PricewaterhouseCoopers’ First Quarter 2007 Korpacz Real Estate Investor Survey showed year-over-year investor gains of more than 195 percent in the Boston central business district (CBD) office market; more than 116 percent in the Philadelphia CBD and more than 106 percent in Atlanta’s CBD.

“Investors are looking to purchase so-called ‘value-added properties’ that offer income and value appreciation and higher returns through re-tenanting, repositioning and/or the re-leasing of available,” Korpacz said.

However, Fitch Ratings, New York, said yesterday it has concerns for underwriting in commercial mortgage-backed securities (CMBS) based on numerous office properties where the existing cash flow was adjusted to reflect continued long term market and rental growth. Fitch said that in some cases, leases were underwritten at market rents substantially higher than recent leases signed at the property.

Some leases that expire after the loan refinancing date are also being written up to market levels, even when the cash flow upside “will certainly not occur during the loan term,” according to Fitch. The ratings agency said that in properties with below market occupancy, vacant space is considered leased today at market rates. Also, when properties are underwritten with this upside included as leverage upfront, implied cap rates fall well below historical ranges in relation to current in-place cash flow. In many cases, these cap rates could be as low as 2.5 percent to 4 percent, according to Fitch.

“Real estate professionals are structuring loans today with the expectation that cash flow will continue to rise in a commercial real estate market that has already experienced dramatic upward trends,” said Eric Rothfeld, senior director at Fitch. “Both the risks and rewards of increases in property cash flow are borne by the equity investor. When the economics are realized, increases in value materialize. However, Fitch is seeing the market financing the higher value prematurely, based on the expectation that it will occur, but well before it does or does not come to exist.”

Marcus & Millichap’s 2007 National Office Report forecasts the yield on the 10-year U.S. Treasury to remain in the high-4 percent to low-5 percent range this year, barring any unexpected spikes in inflation.

“Wile risks are still present, cooling economic conditions are expected to keep inflation levels moderate,” the report said. “Overall, market indicators continue to support a relatively favorable interest rate outlook for 2007.”

The report also said global investors will continue to seek portfolio diversification through real estate exposure as they look for high-yielding mortgage bonds with expectations for a strong CMBS market.
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The loan was funded through Quantum First Capital’s correspondent relationship with Green Park Financial, Bethesda, Md., through the Fannie Mae Delegated Underwriting and Servicing (DUS) program.

The loan was structured at a 20-year term with 10 years interest-only followed by a 30-year amortization at 55 percent of the acquisition price.

Jason Rice of Quantum First Capital originated the financing on this transaction on behalf of the borrower. Quantum First Capital arranged the permanent debt financing on behalf of a Tenancy-in-Common (TIC) borrowing entity consisting of two California based LLCs. The TIC structure accommodated the buyer’s 1031 exchangeneeds.

The transaction included an additional 2.45-acre tract of land for possible future development of another 30 units. Southgate Glen is 92 percent occupied.

Built in 1999, Southgate Glen Apartments is a 160-unit, garden-style, multi-family community located 30 miles west of downtown Fort Worth off Interstate 20. The Class A complex is across the street from Weatherford College whose enrollment is more than 5,500 students. The college provides housing for students at the college and in the surrounding area.

Quantum is a member of Strategic Alliance Mortgage (SAM) and provides small to large debt, investments and special banking services to the real estate industry.
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Learn about all of the latest legal and regulatory developments and trends, as well as cross-cutting issues affecting the mortgage industry at this premier event. Parallel tracks, designed for lawyers and compliance officers at all levels of experience, address significant and timely issues facing the industry, including:

• Nontraditional Mortgage Products
• HMDA/Fair Lending
• Data Security, ID Theft and Privacy
• Protecting Against Mortgage Fraud
• FCRA/FACTA
• RESPA and TILA
• Servicing Developments
• State Law/Licensing Developments
• Secondary Market and GSE Issues
• Reg AB
• Class Action - Litigation Developments
• Banking Regulation/Preemption
• FLSA/Employment Law
• Legal Ethics
• Dealing with Reputational Risks
• Natural Disaster Preparedness
• Compliance Considerations

Additionally, MBA will sponsor a house building event on May 6 with Habitat for Humanity, part of MBA’s commitment to helping rebuild New Orleans, which was devastated by Hurricane Katrina in 2005. This special event takes place from 8:30 a.m.-1:30 p.m. CT.

Who Should Attend:

• In-house counsel and senior executives from mortgage banking firms, other real estate lenders and real estate secured investors

• Outside counsel with mortgage banking industry clients

• Compliance officers and managers

• Others who want to stay abreast of legal issues in the residential mortgage banking business

To download the conference brochure, go to
http://www.mortgagebankers.org/files/conferences/pdf/M2702076_brochure.pdf.

Please contact Travel Incorporated, MBA's official travel agency, to take advantage of special discounts on airfare and car rentals. You can make your travel arrangements (Monday-Friday, 24 hours/day). A proposed schedule will be sent to you immediately. Reservations will include 5-10 percent savings depending on the destination and meeting. You may also call our official air carriers and car rental agencies directly. To contact Travel Incorporated, call (800) 524-3002.

The discounted hotel rate cut-off date, April 13, does not ensure availability of rooms. If rooms are available until April 13, you receive the discounted hotel rate based on availability. After April 13, reservations are made on a space-available basis only, and you are charged the regular hotel rate. Program registrants are responsible for making their own hotel reservations. Contact the Hilton New Orleans Riverside by phone or fax. When making your hotel reservation with the Hilton New Orleans Riverside, please ask the reservation agent for the Group Code: LIR.

Hilton New Orleans Riverside (web site: http://www1.hilton.com/en_US/hi/hotel/MSYNHHH-Hilton-New-Orleans-Riverside-Louisiana/index.do)
2 Poydras Street
New Orleans, La. 70140
Phone: (504) 561-0500
Fax: (504) 568-1721
MBA discount rate: $199 Single/Double, $249 Executive Level, Single/Double.

To register online, visit http://events.mortgagebankers.org/legalissues2007/register.

Conference sponsorship is the ideal vehicle to grab the attention of this important audience and position your company as a leader in the industry. All sponsorships include a tabletop exhibit opportunity, but space is limited. For more information, contact Mark Brady at mbrady@mortgagebankers.org or call (202) 557-2790.
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Among the various program options:

Compensation Benchmarking: This comprehensive survey profiles more than 300 residential real estate finance positions. The survey includes three options offered to meet your company’s business needs:

• The Executive Management & Production Administration Survey
• The Loan Servicing/Loan Administration Survey
• The Corporate Administration & Support Survey

Other options include:
• The Incentive Plan Study
• The Productivity Analysis

New in 2007: The Benefits Survey, which provides financial services firms with key market data related to prevalence of plan types and policies, costs of individual benefit programs and employee participation and contribution rates. All important benefit categories are covered, such as: health and welfare, retirement, paid time off, relocation practices and personnel practices. MBA members will receive a complimentary custom mortgage industry benefits report.

All data gathered is confidential and no individual company information is published. MBA members receive a discount on survey fees.

The following links provide more information on the surveys as well as a registration form. 

Residential Mortgage Banking Compensation Survey Program Overview
2007 Benefits Survey Overview
2007 Participation Form

For more information, contact McLagan Partners at (203) 359-2878 or one of the following MBA contacts: Marina Walsh at mwalsh@mortgagebankers.org; (202) 557-2817; or Stephanie Giannori at sgiannori@mortgagebankers.org; (202) 557-2879.
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“The Hispanic mortgage market is expanding at an incredible rate, presenting tremendous growth opportunities for lenders,” said Randy Schmidt, president and founder of Data-Vision. “A [service] that can fully accommodate the non-English speaking customers who wish to use the Internet to start their mortgage process is needed.”

Multilingual option services include mortgage dictionaries, loan calculators and instant decisioning and loan status capabilities, in addition to web sites in the particular language. Online support such as live chat is also available through the option, enabling lenders to communicate with their non-English speaking customers. 

Data-Vision currently offers programs in Spanish and Polish and is working on expanding its language options. All services provided are professionally translated and lenders have the option of editing and customizing the product to fit their own services and clients’ needs.

“Consumers—even those fluent in English—are often confused by the unfamiliar acronyms, legal terminology and industry-specific terms found in the mortgage process,” Schmidt said. “Understanding all the provisions can be even more difficult for a borrower who does not speak English.”

Cultural implications also play an important role in interactions between lenders and customers. Schmidt said offering services in other languages can help lenders secure more business in the diverse growing market segments. 

“Lenders have to ask themselves if they are reaching out to the broadest possible audience today. Our product offers tools for them to cater to the various segments that are growing today,” Schmidt said.
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