home subscribe advertise reprints e-mail help RSS about us LOG IN

Mortgage News


Mortgage News

HOT Topics









site map

twitter linkedin
facebook google+

Mortgage News

News by Subject
Complete list of specialty news sections.

Purchase Subscription
Subscribe to MortgageDaily.com and get immediate access to all news, statistics and archives.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Consumer Mortgage News
Free mortgage news for prospective borrowers.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from MortgageDaily.com.

Mortgage News Reprints
Put entire MortgageDaily.com stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed MortgageDaily.com stories free on your Web site or for your RSS reader.

News Archives
Archive of MortgageDaily.com stories by month going back to 1999.

Press Releases
Reports and announcements from MortgageDaily.com.

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Directories
Directories of lenders, branch operators and mortgage service providers.

Mortgage Graphs
Directories of lenders, branch operators and mortgage service providers.

Corporate Mortgage News
M e r g e r s, a c q u i s i t i o n s and private and public offerings. Other corporate activity including executive appointments, bankruptcies name changes.

Losses Force Firms to Seek Capital

Recent mergers, acquisitions and corporate activity

November 29, 2007


photo of Coco Salazar

As mortgage woes continue to pound the earnings of financial services companies, some major players are raising some major capital. Among those companies is Citigroup, which today announced it would consolidate two mortgage units.

Freddie Mac today said it will offer $6 billion of only non-convertible non-cumulative perpetual preferred stock, changing from Tuesday's announced plan to include a small offering of convertible non-cumulative perpetual preferred stock. The offering, headed by Lehman Brothers Inc. and Goldman, Sachs & Co., is expected to price in the near term. A request has been made to list the stock on the New York Stock Exchange.

The offering, which was well received according to published reports, is part of the secondary lender's efforts to raise capital in light of actual and anticipated losses necessitated by accounting requirements and to help meet the 30 percent capital surplus target mandated by its regulator. In another capital-raising action, Freddie decided to cut its fourth quarter common stock dividend in half to $0.25 per share, according to separate announcements Tuesday.

Freddie is being sued by Charles H. Johnson & Associates on behalf of investors of the secondary lender's publicly traded securities during Aug. 1, 2006, through Nov. 19, 2007. The law firm said the class action accuses Freddie of making false and misleading statements concerning its business, risk management and procedures for protection against mortgage industry problems.

Franklin Credit Management Corp. said it will request a hearing with the Nasdaq Listing Qualifications Panel. The company last week received a delinquency notice from Nasdaq due to its failure to timely file third quarter results with the Securities and Exchange Commission.

Meanwhile, a missed deadline for filing third quarter results led to a notice of default in Luminent Mortgage Capital Inc.'s $90 million convertible senior notes, the company said in a filing with the SEC Tuesday. The trustee of its 8.125% convertible senior notes due 2027 informed Luminent that the reporting default will ripen into an event of default unless it files third quarter results by Jan. 20, 2008.

Toronto, Canada-based MortgageBrokers.com Holdings Inc. today reported revenues improved annually in the third quarter, but warned that it will not achieve previously announced revenue projections because of U.S. subprime mortgage and credit market devaluation. The U.S. subprime woes have led it to suspend plans to enter into the U.S. mortgage market via acquisitions until the full economic effect of the current market turmoil is known and has curtailed subprime funding in Canada, impacting the company's overall performance.

Franklin Bank Corp. said a review of its loan portfolio has prompted it to increase its allowance for credit losses by $20 million. Franklin expects credit costs for the commercial loan portfolio of between $5.0 million to $7.5 million next year. Allowance for credit losses on total loans will increase to 0.91 percent from 0.42 percent, the reserve for the builder finance portfolio will jump to 1.77 percent from 0.52 percent, and overall commercial loan reserve will more than double to 1.33 percent from 0.61 percent.

"Franklin's management believes that this effort to anticipate issues, rather than wait for them, should remove the perceived risk to our institution from both the builder finance and mortgage portfolios," the Houston, Texas-based company said in an announcement.

Citigroup announced it will receive $7.5 billion from the sale of equity units to Abu Dhabi Investment Authority. Abu's stake in Citi's common shares, including the conversion of the equity units, will be no more than 4.9 percent.

"This investment, from one of the world's leading and most sophisticated equity investors, provides further capital to allow Citi to pursue attractive opportunities to grow its business," said Citi Acting CEO Win Bischoff in the written statement.

A subsidiary of the New York-based company, Citi Home Equity, notified its brokers that the unit would be integrated into the CitiMortgage Wholesale Lending organization, according to a copy of a letter. The two units will now operate under one management team -- with the change being transparent to brokers.

"This change should be transparent and will not change the way you do business with us -- your contacts for CitiMortgage and Citi Home Equity remain the same," Citi's message said. "Our goal is to make doing business with us easier and having both sales organizations under the same management will be beneficial to that regard."

Shareholders of TSB Financial Corp., based in Charlotte, N.C., have approved a merger with SCBT Financial Corp., based in Columbia, S.C., according to an announcement today. The mergers, which has also been approved by bank regulators, is scheduled to close tomorrow.

E*Trade Financial Corp. announced today its fourth quarter results will include a $2.2 billion charge from an $800 million sale to Citadel Investment Group of its $3 billion asset-backed securities portfolio, which includes ABS collateralized debt obligations and second lien securities. The deal, expected to give Citadel nearly 20 percent ownership of E*Trade, also calls for Citadel to purchase $1.75 billion in 10-year notes. E*Trade said the $2.5 billion cash infusion will allow it to fortify its balance sheet, focus on its core retail business and add capital to manage credit risk to restore consumer confidence.

The New York.-based entity also said its fourth quarter will show a provision related to its home equity loan portfolio in excess of the quarter's expected losses that will result in an ending allowance of over $400 million.

E*Trade additionally underwent executive changes, with Donald H. Layton succeeding George A. Hayter as chairman and R. Jarrett Lilien appointed as acting chief executive officer to replace Mitchell H. Caplan, who has stepped down from the CEO position. Lilien will be considered for the permanent role.

People's United Financial Inc. is well on its way to acquire Chittenden Corp. by or around Jan. 1. Chittenden said its shareholders approved the sale Wednesday.

Century Bank announced it will merge with Liberty Bank N.A. after converting to a stock company from a mutual company. The stock company, Century Commercial Bancorp, will offer shares of common stock to depositors of Century Bank as of Sept. 30, 2006, and others in a subscription and community offering. The number and price of the shares issued will depend on a yet-to-be-performed independent appraisal. The conversion, offering and merger will occur simultaneously, with expected completion in the second quarter 2008.

Coco Salazar is an associate editor and staff writer for MortgageDaily.com.

e-mail: [email protected]

Nonprime and Subprime News | Subprime Statistics
Stories about non-QM products. Coverage of subprime, Alt-A and
hard money lending. Home-equity loans and home-equity lines of credit.

GSE News | Fannie/Freddie Share Statistics
Fannie, Freddie and FHLB news. Coverage of government sponsored enterprise regulation, operations and litigation.

Mortgage Lawsuits News | Mortgage Litigation Index
Mortgage industry lawsuit news and mortgage litigation coverage. Stories about legal settlements, judgments and mortgage class actions.

SUBSCRIBERS: Edit Subscription | Subscription Help | or call 214.521.1300

Subscribe Contact Us Site Map

Copyright © 2017 Mortgage Daily, D a l l a s
Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

p r i c i n g engine directory

wholesale lender directory

More Mortgage News Resources (full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter


mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

real estate news

refinance news

reverse mortgage news

secondary marketing

social media

servicing news

subprime news

wholesale lenders