Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.real From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: real Mon, Aug 3 1992 Date: Mon, 3 Aug 92 03:33:15 EDT Message-ID: 08-03 0000 DECISIONLINE: Real Estate USA TODAY Update Aug. 3, 1992 Source: USA TODAY:Gannett National Information Network MORTGAGE RATES STABILIZING: The Federal Home Loan Mortgage Corp. said the average rate on 30-year fixed-rate loans slipped only a hair last week to 8.05% from 8.08%. Rates are expected to remain stable until Friday when the government releases the July employment figures. The discouraging jobs situation reported at the end of June prompted the recent rate-cutting. (For more, see special Mortgage package below.) REAL ESTATE DEFAULT COSTS AETNA: Aetna Life & Casualty, the USA's largest publicly held insurance and financial-services company, says it lost $20 million the second quarter, partly because of a bond-payment default by troubled real-estate group Olympia & York Developments. The results include a charge of $96 million for severance and benefit costs related to job cutbacks and a $30 million charge for the default by the troubled real-estate group. THEME PARKS ARE PARAMOUNT: Paramount Communications says it plans to get into the theme-park business by buying four theme parks for $400 million. The entertainment giant says it will buy Kings Entertainment, which owns three parks. Paramount says it expects the parks to add at least $250 million to its annual revenue. Last year, Paramount's revenue totaled $3.9 billion. COST OF FUNDS INDEX DOWN: The Federal Home Loan Bank of San Francisco Friday announced that the monthly weighted average cost of funds index for 11th District savings institutions for June was 5.258%, down from 5.290% in May. ARM rate changes are linked to changes in the index, which reflects the interest rates paid by thrifts in Arizona, California, and Nevada on their various sources of mortgage money. YIELD GAP NARROWS: The yield gap between mortgage passthroughs and treasuries narrowed Friday, three to five basis points for 9% coupons and lower, and 10 to 16 basis points for higher coupons. Traders attributed some of the demand to underwriters gathering collateral to back new real estate mortgage investment conduits. Total issuance announced this week was a modest $6.3 billion. RTC SUES ARTHUR ANDERSEN & CO.: The Resolution Trust Corp. filed a $400 million lawsuit against Arthur Andersen & Co., charging the accounting firm with malpractice in the failure of a Houston savings and loan, Benjamin Franklin Savings Association. The thrift cleanup agency says the lawsuit is the largest it has filed against an accounting or law firm. CNL REALTY INVESTORS ON AMEX CNL Realty Investors Inc. of Orlando, Fla., Friday began trading its common stock on the American Stock Exchange. Trading as "NNN," the company's common stock opened at 9-3:4 per share. CNL is a real estate investment trust that purchases and leases net lease properties to commercial retail tenants. The company's portfolio currently consists of 43 triple-net leased properties. SIZELER PAYS DIVIDEND: Sizeler Property Investors Inc. Friday announced a $.25 per share dividend payable on Sept. 4 to shareholders of record as of the close of business on Aug. 20. Sizeler is a self-administered equity real estate investment trust that invests in shopping center and apartment properties in the southern United States. NON-TRADITIONAL FUNDING TO RISE: Real estate developers will turn to non-traditional sources for debt financing in the future, according to the second annual National Real Estate Opinion Survey of 1,700 developers, commercial real estate owners, executives and lenders. Among alternative sources named were foreign banks and pension funds. S.C. PROPERTY SETTLEMENT TALKS: U.S. Rep. John Spratt meets Monday with York and Lancaster counties in South Carolina to discuss their potential contributions to a property settlement with the Catawba Indians. The Indians claim that 144,000 acres of land were illegally taken from them in 1840. SPECIAL PACKAGE ON MORTGAGE: MORTGAGE RATES ALMOST FLAT: Mortgage rates had been keeping pace with plunging Treasury bond yields. But last week, mortgages remained virtually flat even though T-bond yields dropped. Here's why: Mortgage rates tend to move in tandem with T-bond yields because most loans are packaged into securities that compete with bonds. But mortgage investors are nervous. INVESTORS PREFER HIGHER RATES: As mortgage rates plunge, homeowners refinance. That means investors who hold the mortgages get back their principal early and must reinvest at lower rates. They don't like that, so they start demanding mortgage rates that are higher than usual relative to T-bond yields, says economist Mark Obrinsky, Federal National Mortgage Association. JOBS FIGURES IMPACT RATES: Of 2,000 lenders surveyed last week by HSH Associates, 450 are offering 30-year rates below 8% with 2 to 2.5 points. Expect the rate horizon to remain calm until Friday, when the government releases July's unemployment report. June's bad report sparked the latest round of rate-cutting. (End of package.) Real Estate Editor: Susan M. Andrews. Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM