Mortgage Mergers Maintain

On Nov. 23, Texas Regional Bancshares reportedly completed the acquisition of Valley Mortgage Co.

The holding company of Texas State Bank said Valley Mortgage shareholders will receive approximately $4.6 million in cash and approximately 294,000 shares of newly issued Texas Regional common stock in exchange for all of the outstanding shares of Valley Mortgage.

As of Aug. 31, Valley Mortgage, which is also headquartered in McAllen, Texas, reported total assets of $17.6 million. The company is operating as a wholly owned subsidiary of its Texas State Bank.

In Miami, Fortune Real Estate Development Corp., which focuses primarily in converting hotel and apartment buildings into condominiums, announced that it will expand into the residential and condominium lending arena with the development of a mortgage division.

The new unit will specialize in providing easy financing for the growing middle income and first time home buyer market. The division is expected to be popular with buyers who have difficulty obtaining conventional mortgage and credit, Fortune said.

In Lake Forest, Ill., Wintrust Financial Corp. announced it signed a definitive agreement to acquire First Northwest Bancorp Inc.in a cash and stock deal reportedly valued at around $44 million. The transaction is expected to close next year late in the first quarter or early second quarter.

Wintrust is parent company of WestAmerica Mortgage Co., which engages primarily in the origination and purchase of residential mortgages for sale into the secondary market.

The agreement comes nearly two months after Wintrust announced the completed merger with Northview Financial Corp. Wintrust reports it has acquired 12 community bank subsidiaries since 1991.

Around mid-November, real estate investment trust, Desert Capital REIT, announced it agreed to pay $9 million in cash and 450,000 in shares for the purchase of Consolidated Mortgage Corp.

The deal is structured as an installment sale in which Desert will acquire the outstanding equity securities of Consolidated Mortgage over time. Desert said it expects the initial closing of 25% of the outstanding equity to occur by mid-December and the acquisition of all equity securities by the end of the third quarter 2005.

Consolidated’s “origination fees will now serve as an additional income stream for Desert Capital REIT, thereby providing additional revenue for dividend payments,” Desert executive Todd B. Parriott said in a written statement.

Desert said its mortgage loan portfolio consists of acquisition and development, construction, commercial property and residential loans.

Consolidated is reportedly one of the nations’ largest private trust deed investment firms with over $300 million in currently brokered loans.

Both companies are headquartered in Las Vegas, Nev.

Early this month, New York Mortgage Trust Inc. announced it agreed to acquire 15 retail branch offices and 26 satellite offices from Guaranty Residential Lending Inc. The deal, which also included the transfer of a $300 million pipeline of locked and unlocked mortgage applications, will expand the retail mortgage origination network of its subsidiary New York Mortgage Co. throughout the East Coast, the real estate investment trust reported.

In a 10-Q filling with the SEC, New York Mortgage said the pipeline and other assets had a combined purchase price of approximately $1.3 million and that it would pay a $250,000 contingency premium to Guaranty if the loan officers acquired would originate, close and fund $2 billion in mortgage loans during the twelve month period after the closing date of the transaction. The consummation of the transaction was expected to close mid-November, but, an announcement confirming such action has not been released.

New York Mortgage CO-CEO Steven Schnall said in the announcement the company will acquire 324 Guaranty Residential employees.

“Additionally, our focus to promptly replace our initial $1.2 billion portfolio of acquired mortgage-backed securities with self-originated loans will be greatly accelerated with this asset acquisition,” Schnall added.

With the acquisition, New York Mortgage said it expected its annual mortgage originations, which totaled about $1.6 billion in 2003, to nearly double.

The branches included in the deal are located in Connecticut, Delaware, Maryland, Massachusetts, New Hampshire, New York, Pennsylvania, Rhode Island, and Virginia, and give New York Mortgage a total of 38 mortgage banking branches and 28 satellite offices in 13 states, it reported.

The agreement between the two companies followed multiple announcements by the parent company of Guaranty Residential, Texas-based manufacturer Temple-Inland, that it would reposition mortgage origination activities to reduce costs and earnings volatility in the slowing refinance environment.