As lawyers continue their assault on struggling mortgage lenders, mergers managed some progress and a reverse lender received a capital injection to help fund its rapid growth.
Before that, Opteum Inc. reported it will change its name to Bimini Capital Management Inc. on Friday, while its Class A Common Stock will begin trading on the New York Stock Exchange under the symbol “BMN”.
Joe Pickett, who served on Fannie Mae’s board for over decade, has decided not to stand for re-election, the secondary lender announced on Friday. His “deep understanding of the company and the industry were especially valuable as the company worked through the process of restatement and remediation,” Fannie Chairman Stephen B. Ashley said in the announcement.
NetBank Inc. is being sued by Schoengold Sporn Laitman & Lometti P.C. on behalf of investors of NetBank securities from May 1, 2006, through Sept. 17, 2007, according to an announcement. The class action lawsuit alleges NetBank made materially false and misleading statements to artificially inflate the value of its stock.
Such claims also led Scott & Scott LLP to file class action against Thornburg Mortgage Inc. on behalf of common stock purchasers between this April 19 and Aug. 14, 2007. Brodsky & Smith LLC and Abbey Spainier Rodd & Abrams LLP are other firms that recently announced their representation of Thornburg investors for this class period.
For similar reasons, Goldman Scarlato & Karon P.C. announced it is suing Countrywide Financial Corp. on behalf of those who purchased or acquired the lender’s publicly traded securities between Oct. 24, 2006, and Aug. 9, 2007.
Goldman alleges Countrywide misled investors by falsely representing that it had “strict and selective underwriting and loan origination practices, amply liquidity that would not be jeopardized by negative changes in the credit and housing markets, and a conservative approach that set it apart from other mortgage lenders.” Investor lawsuits against Countrywide have also been brought forth by Scott & Scott and Lerach Coughlin Stoia Geller Rudman & Robbins LLP.
Bankrupt American Home Mortgage Corp. agreed to transfer the files of over 4,500 Freddie Mac loans it was servicing to Bank of America, Freddie spokesman Brad German told MortgageDaily.com. The agreement, approved by a bankruptcy court Thursday, allowed for Freddie to transfer about $2.4 million to American Home that will bring outstanding tax and insurance payments on the loans current. BoA will act as the interim servicer until the servicing rights on the files are auctioned to a Freddie-approved servicer.
Freddie had sued American Home, alleging the servicer had stopped making payments on borrowers’ insurance premiums or periodic real property tax liabilities,” and refused to turn over the loan files even after Freddie had delivered a servicing termination notice. American Home was planning to market the Freddie loan files for sale in an auction.
Limited access to capital has hindered the prospects for mortgage real estate investment trusts, Fitch Ratings announced. Declining values on mortgages not yet securitized and bigger haircuts are triggering margin calls
Since Sept. 1, 2006, Fitch said it has downgraded issuer default ratings of publicly- and privately-rated mortgage REITs 26 times, placed 14 on review for possible downgrade and revised the rating outlook of one publicly-rated mortgage REIT to negative from stable.
Oxford Funding announced it has purchased nearly $5 million in loan portfolios of performing loans in the past quarter and that its board seeks to acquire additional asset resolutions companies and loan portfolios. The Houston, Texas-based company says it acquires performing and under performing mortgage portfolios at deep discounts, rehabilitates them and then sell them at a profit.
First Tennessee Bank National Association has agreed to sell all 34 of its First Horizon Bank branches to M&T Bank, Sterling Bank, Fifth Third Bank and FMCB Holdings Inc., parent First Horizon National Corp. announced today. Terms of the deals, which are expected to close during the first quarter of next year, weren’t disclosed. First Horizon plans to reinvest capital in businesses with higher returns.
Fitch announced it revised the rating review status of PHH Corp. to evolving from positive as a result of the lender recently disclosing that its sale to General Electric Capital Corp. and affiliates of The Blackstone Group may not occur as planned because of potential financing shortfalls. The direction of PHH’s long- and short-term issuer default ratings, and senior unsecured and commercial paper ratings will depend on whether the deal goes through as originally intended or is terminated.
PHH’s disclosure also recently prompted Moody’s Investors Service to change its Baa3 senior debt rating review status to direction uncertain from possible upgrade.
A Lone Star Fund V subsidiary again announced an extension of its agreement to acquire Accredited Home Lenders Holding Co. In a Securities and Exchange Commission filing Monday, Lone Star said it would extend its offer to 12:00 midnight on Oct. 5.
Meanwhile, Reverse Mortgage Solutions Inc. announced it received additional funding of $4 million from JAM Equity Partners LLC, which previously provided $7 million to fund Reverse Mortgage’s entry into business in March. Noting that it has boarded 2,500 loans since its founding, the reverse mortgage servicer and consulting firm will use the latest installment to expand its services and technology and shore up its balance sheet to facilitate partnerships with Wall Street investors and larger banks on subservicing.
