Three financial firms were acquired during the past week, while regulators shut down a Minnesota bank. Other recent mortgage-related corporate activity included the appointment of a former regulator to a senior executive position at a reverse lender, another investor class action and a dividend declaration by a subprime real estate investment trust.
Dennis Thomas was named to a senior management post at 1st Reverse Financial Services LLC. Thomas previously worked at the Federal Home Loan Bank of Chicago, the Office of Thrift Supervision and the Internal Revenue Service, an announcement Thursday said.
Illinois-based 1st Reverse was acquired by WSFS Financial Corp. in April.
Beleaguered Thornburg Mortgage Inc. said Monday that it delayed the release of its first-quarter earnings report by another 10 days. The REIT blamed the delay on the complex valuation of a March senior subordinated secured note transaction.
Thornburg also said it received a warnings from the New York Stock Exchange that the price of its shares, which today were trading at $0.76, must be brought above $1.00 per share for 30 consecutive trading days before Nov. 29 to avoid delisting. The Santa Fe, N.M.-based jumbo lender plans to cure this through a reverse stock split.
A class action lawsuit was filed in U.S. District Court, Central District of California, against Downey Financial Corp. and some of its officers and directors on behalf of investors who purchased shares of the company between Oct. 16, 2006, and March 14, 2008, the law firm of Schiffrin Barroway Topaz & Kessler LLP announced yesterday.
The defendants are accused of violating the Securities Exchange Act of 1934 because Downey hid or misrepresented material adverse facts. Among the alleged omissions were that the option adjustable-rate mortgage portfolio included a significant share of subprime loans, very high-risk loans had been acquired and that its option-ARM portfolio was materially impaired. In addition, Downey allegedly improperly accounted for mortgage-backed securities and other highly leveraged loans, maintained inadequate reserves and lacked adequate internal and financial controls.
Schiffrin Barroway noted that shares of Downey, which had traded as high as $74.85 during the class period, fell to $18.82 on March 17, 2008, when it reported 13-month operational data.
The Office of the Comptroller of the Currency said Friday it shut down First Integrity Bank, N.A., in Staples, Minn. First Integrity, which was founded in 1919 and chartered as a national bank in 1998, had around $53 million in assets.
“The OCC acted after finding that the bank had experienced substantial dissipation of assets and earnings due to unsafe and unsound practices,” the statement said. “The OCC also found that the bank had incurred losses that have depleted all or substantially all of its capital, and there is no reasonable prospect that the bank will become adequately capitalized without federal assistance.”
First International Bank and Trust will assume all of First Integrity’s deposits and acquire $36 million in assets for a $2 million premium, the Federal Deposit Insurance Corporation said in a separate announcement Friday. First Integrity is reportedly the fourth FDIC-insured bank to fail this year.
Accredited Mortgage Loan REIT Trust, a subsidiary of Accredited Home Lenders Holding Co., announced its board of directors’ pricing committee approved an $0.609375 cash dividend on its perpetual cumulative preferred shares.
Affiliates of Accredited parent Loan Star Funds have acquired some operating assets and the rights to certain operating assets of Bear Stearns Residential Mortgage Corp., Lone Star spokesman Ed Trissel confirmed to MortgageDaily.com.
The Lone Star purchase was done just prior to the acquisition of The Bear Stearns Companies Inc. by JPMorgan Chase & Co. on Friday, which JPMorgan announced Saturday. That deal was brokered by the Federal Reserve earlier this year in an emergency rescue plan that included $30 billion in Fed financing in response to a run on capital at Bear by institutional investors.
U.S. Bank, N.A., completed its acquisition of Mellon 1st Business Bank in California from Bank of New York Mellon Corp., U.S. Bancorp announced Monday. The deal included $1.1 billion in loans.
MetLife Bank, N.A., announced it completed the acquisition of EverBank Reverse Mortgage LLC of Bloomfield, N.J., from EverBank Financial Corp.
“With this acquisition, MetLife Bank now has a greatly expanded team of trained reverse mortgage specialists as well as industry-leading technology to support this business,” MetLife President Donna DeMaio said in the press release.