The mortgage banking remnants of a bank that failed during the depths of the financial crisis have been scooped up by one of the nation’s biggest lenders.
In late 2009, the
Office of Thrift Supervision seized and closed down AmTrust Bank. The Cleveland-based financial institution was a big wholesale lender.
The Federal Deposit Insurance Corp., which was appointed conservator of AmTrust by the OTS,
accepted a bid by New York Community Bank to acquire the failed bank.
On Tuesday,
the Waterbury, New York-based parent of financial institution, New York Community Bancorp, disclosed an agreement to sell the mortgage banking business, which it inherited through AmTrust.
The buyer in the transaction, Freedom Mortgage Corp., will pick up both the origination and servicing platforms.
Freedom previously reported nearly $9 billion in first-quarter 2017 originations and ranked as the seventh-biggest home lender during all of 2016.
In addition, Freedom will acquire mortgage servicing rights on around $21.0 billion in agency loans. Freedom reported a total servicing portfolio of $105 billion as of March 31.
A statement from Mount Laurel, New Jersey-based Freedom indicated that it is buying around $500 million in selected mortgage assets from the bank.
The bank’s notice indicated that Freedom, which had a staff of
4,885 employees as of the first-quarter 2017, is expected to retain some employees who work in Cleveland.
“I am delighted to have the opportunity to add the quality assets, platform and select employees which are part of New York Community Bank to our Freedom family,” Freedom Mortgage Chief Executive Officer Stanley C. Middleman said in the statement. “I think there will be a great future for both firms as a result of this transaction.”
New York Community Bancorp additionally revealed that it has received FDIC approval to sell the majority of its single-family assets to an affiliate of Cerberus Capital Management LP. The carrying value of the assets is $1.9 billion.
Bank of America Merrill Lynch is acting as the exclusive financial advisor to the bank.
Both transactions are expected to close in the third quarter.
