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Corporate Real Estate Finance

Corporate Real Estate Finance

Mortgage mergers, acquisitions and corporate activity

April 25, 2006

By COCO SALAZAR

photo of Coco Salazar
The latest mortgage business transactions have Freddie Mac untangling itself from past problems, a scratch-and-dent operation getting funded and an online mortgage lender launching.

But first, the Federal Reserve announced Thursday it approved the merger of Integrity Financial Corp. into FNB Corp., which will change its name to FNB United Corp.

Washington Mutual Inc. announced Sunday it will acquire Commercial Capital Bancorp Inc. to enhance its commercial and retail banking business in a deal valued at about $983 million expected to close next quarter.

HouseValues Inc., a provider of real estate information and services, announced that Wachovia Mortgage Corp. recently chose The Loan Page as its provider of online lead generation and management services.

The Loan Page matches mortgage prospects with four lenders that are appropriate for their profile, credit history and product situation, according to the announcement.

Better-than-expected progress in its mortgage business, through the Loan Page, as well as continued strong demand for its real estate marketing services, prompted Kirkland, Wash.-based HouseValues to raise its first quarter revenue outlook, according to a separate announcement.

Meanwhile, SN Capital Markets reportedly acquired substantially all the assets of Matrix Bancorp Trading Inc., resulting in a newly-formed limited liability company.

With the infusion of capital and new credit facilities, SN Capital said it will take principal positions in a wider array of products ranging from newly-originated residential loans to “scratch and dent” and non-performing assets. It will also add an Alt-A correspondent flow program in conjunction with Amherst Funding Group, Austin, Texas, as well as a multi-family and commercial acquisition group, and increase mortgage-backed securities trading.

Atlanta, Ga.-based ebank Financial Services Inc. recently announced it agreed with Madison Mortgage Corp. to establish ebank Mortgage LLC.

The new Internet-based mortgage lending operation plans to start originating first and second mortgage loans and home equity credit lines in all 50 states around June 1, eBank said.

ebank Mortgage, 51 percent owned by ebank and 49% owned by Madison will give opportunity to leverage ebank’s Internet banking technology and federal charter by combining it with Madison’s processing and servicing infrastructure “to become a highly competitive mortgage lender across the entire country,” the announcement said.

On Thursday, the Ohio Attorney General’s office announced the tentative agreement in which Freddie Mac would pay $410 million to settle a class-action securities lawsuit initiated by two Ohio pension systems.

The suit reportedly alleged Freddie misrepresented its financial condition during that period.

Freddie noted the suit was filed following its restatement of financial results for the years 2000 through 2002 and said it estimates the settlement will reduce first quarter 2005 net income by approximately $220 million after tax, including the application of expected insurance proceeds.

Also last week, Freddie said it agreed to pay a civil penalty of $3.8 million under a voluntary settlement with the Federal Election Commission to end the investigation of political fundraising activities by former company executives in 2003 and prior periods.

The commission’s investigation allegedly found that Freddie violated federal law by using corporate resources to collect or forward political donations to federal candidates.

It had not been unusual to see Freddie or secondary cousin Fannie Mae announcing with a local U.S. legislator that hundreds of millions or billions of dollars in mortgage money in the respective districts would be financed by the government-sponsored housing enterprises.

From October 2000 through May 2003, Freddie officials hosted 70 campaign fundraisers and raised approximately $1.7 million for federal candidates, according to the conciliation agreement document. The commission concluded Freddie indirectly reimbursed hired political consultants for work preparing invitation lists, supervising fundraising dinners and tracking donation amounts generated by the events.

The settlements enable “this management team to resolve past issues so that we can focus squarely on meeting our important housing mission, running the business well and serving the needs of our customers,” Freddie Chairman and CEO Richard F. Syron said in an announcement.


Coco Salazar is an assistant editor and staff writer for MortgageDaily.com.e-mail: MortgageWriter@aol.com

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