As mortgage earnings continued to be pounded, an online lender was shut down, another mortgage company was acquired and an investment firm reiterated its commitment to make several mortgage acquisitions.
The long-term issuer default ratings of IndyMac Bancorp Inc. and IndyMac Bank were downgraded by Fitch Ratings because of challenges in returning to profitability and its decision to defer dividend payments on preferred stock. IndyMac reported a $184 million first-quarter loss on Monday and said it didn’t expect to see any quarterly profits this year.
An $0.2 billion first-quarter loss reported today by Freddie Mac was better than analysts expected, a big improvement from the fourth quarter’s $2.5 billion loss and better than Fannie Mae’s $2.2 billion first-quarter loss. Freddie’s provision for credit losses was $1.2 billion and reflected an increase in delinquency and estimated severity of losses driven by declines in home sales and home prices.
Freddie noted it would raise $5.5 billion in new core capital in the near future through one or more offerings to include common stock and non-convertible preferred securities.
Freddie’s regulator, the Office of Federal Housing Enterprise Oversight, said in a statement, “Freddie Mac continues to make progress in remediating its past problems including eliminating all material weaknesses and making progress in the SEC registration process.”
NovaStar Financial Inc., which has suspended all origination activity, forfeited its lending licenses and is operating with a staff of around 30 people, repaid all outstanding amounts owed to Wachovia Bank N.A. and its affiliates, according to a filing with the Securities and Exchange Commission Tuesday. In addition, it settled for $275,000 claims with Wachovia relating to disputed loan repurchases.
In a separate SEC filing, NovaStar said it would be late in filing its first-quarter Form 10-Q.
Thornburg Mortgage Inc. also notified the SEC it would not be able to file its first-quarter Form 10-Q on time. The Santa Fe, New Mexico real estate investment trust cited the complexity of its recent financing transaction as well as the need to analyze and determine the proper accounting treatment of the override agreement it entered on March 17 and with certain counter-parties to its reverse repurchase, securities lending and auction swap agreements.
Thornburg noted, however, that it does expect to report “a substantial net loss” as a result of significant mortgage market volatility that caused price declines in its mortgage-backed securities and resulted in both realized and unrealized losses on its portfolio.
E*TRADE Financial Corp., which shut down its wholesale mortgage lending operations in September, reported in an SECÂ filing that it closed its retail mortgage origination business during April. Residential production from the unit was $116 million during the first quarter.
The move marked the New York-based company’s final exit from mortgage lending, though it still plans to partner with a third party to provide access to real estate loans.
E*TRADE Mortgage was originally launched in June 2001 following the February 2001 acquisition of LoansDirect — an online lender.
Fortress Financial Group Inc. continued its heavy campaign of press releases about upcoming consumer finance acquisitions. The latest announcement, released Tuesday, indicated regulatory hurdles have delayed its planned acquisitions, but it is still on track to complete the deals and expects to issue another announcement by next week.
Emerson Lending Co. was acquired by Greenpark Mortgage Corp., according to an announcement Monday. Emerson will operate as a branch of Greenpark.
“After investigating many companies, I found Greenpark to be a much larger version of Emerson with all the lending tools we currently offer as well as a few new options in their product line,” Emerson founder Bill Nickerson said in the statement.
Both companies are based in Massachusetts.
