The New York Mortgage Trust Inc. is selling its retail operations and plans to do the same with its wholesale unit.
IndyMac Bank will pay $13.4 million to purchase certain assets of the New York Mortgage Company LLC, according to an announcement today.
The transaction will reportedly represent IndyMac's largest growth initiative in traditional retail mortgage lending to date. Through the deal, IndyMac will acquire 21 full service and 11 satellite retail mortgage banking offices located in 11 states, including all branch employees and loan officers and a majority of the of the employees at New York Mortgage's corporate headquarters.
"Due to the persistence of the significant challenges facing the mortgage industry, our board of directors has been engaged over the past several months in confidential preliminary discussions with several companies, a number of which expressed interest in acquiring some or all of our organization," said Steven B. Schnall, chairman, president and co-chief executive officer of parent New York Mortgage Trust, in the announcement.
"By exiting and monetizing the value of our mortgage lending businesses," Schnall added, "we believe that New York Mortgage Trust will accomplish several critical objectives," including to substantially reduce, and ultimately eliminate, the taxable REIT subsidiary's operating losses.
Following the sale, New York Mortgage Trust said it intends to sell its wholesale lending business under a separate agreement to another buyer.
New York Mortgage Trust expects to better position itself financially overall to ultimately determine whether a sale or merger of the entire organization is in the best interest of stockholders.
Upon closing of the sale to IndyMac, Schnall will remain only as the non-executive chairman of New York Mortgage Trust but serve as the CEO of the sold subsidiary as well as executive vice president of IndyMac Bank.
David Akre will retain his role of Co-CEO of New York Mortgage Trust and Steve Mumma will assume the roles of president and Co-CEO.