GEORGE SMITH PARTNERS APPOINTED

GEORGE SMITH PARTNERS APPOINTED EXCLUSIVE CORRESPONDENT IN SOUTHERN CALIFORNIA FOR ARCS COMMERCIAL MORTGAGE TO ORIGINATE FNMA AND FHLMC MULTI-FAMILY LOANS

Apartment owners can now access Fannie Mae and Freddie Mac by working with George Smith Partners, Inc. As a result of our correspondent agreement with ARCS, borrower’s pricing will be the same as they would receive if going direct to a DUS originator. ARCS Commercial Mortgage: Since Howard Levine reacquired ARCS approximately 4 years ago, they have been the nation’s largest originator of Fannie Mae multi-family product (1996-1997-1998) and are on track to be No. 1 in 1999. In 1998 ARCS originated more than $1.55 billion in total financings. George Smith said: "I have known Howard Levine for more than 30 years and have been impressed by the organization he has built, their expertise and ability to execute financing in a timely and competitive manner. Their customer satisfaction and repeat business is extraordinary." Howard Levine’s Comments Mirror Smiths: "This new relationship will be an outstanding fit for us because George Smith Partners has an unusually experienced core of 25 professionals that will be able to market our multi-family products. California, representing more than 15% of the national apartment inventory, is the largest state and is enjoying a multi-family renaissance that our lenders want to capitalize on." ARCS Has a National Origination Capability: ARCS is headquartered in Calabasas Hills, California with 17 branch locations. We will be able to work closely and have face-to-face contact to expedite the process. With 17 offices nationally, it enables GSP to serve clients wherever their requirements are. FNMA Introduces a Floating Rate Program: FNMA has announced a LIBOR based floating rate program. Details on this program will be available in next week’s FinFax. The program is expected to have: (1) A term up to 10 years, (2) a floating rate over 90-day LIBOR without the requirement of buying a separate rate cap, (3) spreads well below 200 over, (4) tiered pricing structures and underwriting consistent with FNMA’s fixed rate programs, and (5) the ability to convert to fixed rate. The program is tailored to the optimistic borrower who feels this year’s run up in Treasuries and the widening of risk based pricing spreads may be an aberration or simply prefers the flexibility offered by a floating rate loan. The trade-off to remember is that for every 16 bps rate decline it is the equivalent of saving 1 point in origination fee or loan discount. When the yield curve is relatively flat, as it currently is, short term rates are usually higher than long term rates. With FNMA’s ability to price based on its AAA credit enhancement, floating rate borrowers can expect lower initial rates than the current fixed rates that are available.