Wells Fargo & Co. is talking to First Union Corp. about a possible acquisition. Wells' mortgage banking unit recently purchased $35 billion in residential servicing rights from First Union's mortgage affiliate, but the current talks revolve around the purchase of First Union, the bank, by Wells, the bank.

One investment banker said recently that FleetBoston Financial has been talking to First Union about a possible merger. If Wells buys First Union, Wells presumably would take control of First Union Mortgage's remaining $25 billion in mortgage servicing rights, and its residential production operation.

Marketing is set to start next week for a C$250 million CMBS issue from Caisse de Depot et Placements, the giant Quebec pension fund. Scotia Capital will lead, with BMO Nesbitt, National Bank Financial, TD Securities Inc., and Desjardins Securities.

The issue will have four tranches. A triple-A-rated five year piece will comprise about 85% of the deal, with small tranches of AA, A, and BBB ten years. There is also a tranche of I/O paper that will be retained by the Caisse. The underlying security will be commercial mortgage loans made by the Caisse de Depot.

Midland Loan Services, Kansas City, Mo., has been selected as master and special servicer for a $949.8 million commercial mortgage-backed securities transaction underwritten by Morgan Stanley Dean Witter. The deal is secured by 12 adjustable-rate loans secured by properties in 14 states, including California, Florida, New York, Texas, and Massachusetts.

Toronto-based mortgage technology provider Basis100 Inc., has agreed to provide Canada-based financial institution ScotiaBank with technology that helps companies secure new mortgage consumers online. The automation also has Internet-based mortgage pre-qualification, and application submission capabilities. In addition, Basis100 said ScotiaBank will be using the technology to reach consumers through online portals such as themortgage.com and E*Trade Canada.

Delta Funding Corp. will no longer originate HOEPA home-equity loans, because of their high costs to borrowers and their potential of becoming predatory loans. HOEPA loans have become increasingly prone to attacks and criticism, while subprime lenders have been criticized for possible predatory lending practices.

KeyCorp has acquired Dallas-based Newport Mortgage Co., hoping to develop a national mortgage finance company. In the wake of the acquisition, Key reorganized some of its departments and appointed new members to Key Commercial Mortgage's management team.

John Case, Key's former national CMBS production manager, was appointed president of Key Commercial Mortgage and will be based in Cleveland. Jeffrey Juster, formerly of Newport, will oversee all government-sponsored enterprise and HUD-related programs. Jerry Wheeler, from Newport, will handle all CMBS and agency-lending origination products. E.J. Burke, was named servicing and CMBS director.

Sales of newly constructed single-family homes fell 3% in August following a huge rebound in July. The U.S. Commerce Department reported that new home sales fell from a seasonally adjusted annual rate of 921,000 in July to 893,000 in August. Sales had jumped 11.7% from July to July.

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