Bear Stearns Residential Mortgage Corp. has to wait a little longer to acquire a subprime wholesale operation.
ECC Capital Corp. announced it expects the sale of its mortgage banking business to Bear to close during the first quarter 2007.
When the $26 billion deal was announced in October, the merger was expected to take place by yearend.
"Certain required administrative matters have taken longer than anticipated to resolve, but we are continuing to work toward an expedient close of the sale transaction," said Shabi Asghar, ECC president and Co-chief executive. "Transition efforts are well underway and we anticipate that the move of our employees and operations to Bear Res will be seamless to our broker network."
Affiliates of Bear, which will continue to operate the business under the Encore Credit name with Asghar as the leader, have separately agreed to finance and acquire substantially all of ECC's fourth quarter loan production, anticipated at over $1.2 billion, according to the announcement.
With the sale, ECC said it will effectively exit the subprime wholesale mortgage origination business and its remaining operations will consist primarily of the management of its residual interests in its securitizations.