A New York-based investment management firm that already owns multiple mortgage firms is taking a stake in two more. Several other mortgage acquisitions are in the works and bids are reportedly being made to acquire one big player.
A deal was hammered out between American International Group Inc. and Fortress Investment Group LLC for Fortress to acquire an 80 percent stake in American General Finance, an Aug. 11 press release said. The sale of the 90-year-old finance company is subject to regulatory approval. Terms of the transaction, which is expected to close in the first quarter of next year, were not disclosed.
Among American General’s current offerings are home-equity loans and home-improvement loans. Fortress Co-Chairman Wesley R. Edens call the company “an exceptional franchise with a strong management team and a leading platform,” adding that it is poised for significant growth.
Between 2005 and 2007 American General originated more than $20 billion in subprime mortgages. But it shut down 150 branches and laid off 500 people in May 2009 — leaving around 7,500 employees at the time.
In July, New York-based Fortress announced it would acquire CW Financial Services, a special servicer for commercial mortgages, from majority shareholder Otera US Holding Inc. No terms were disclosed, but Fortress did say it expected to close the merger during this quarter.
CW’s special servicing portfolio was $11.5 billion at the end of April, while it managed a total of $183.6 billion in loans and securities, according to the statement.
Fortress, a publicly traded hedge fund, owns Champion Mortgage, Nationstar Mortgage LLC and Newcastle Investment Corp. In October 2008, it enlisted Quicken Loans Inc. to refinance and modify its mortgage holdings.
Omega Mortgage Corp. is being purchased by 125-year-old Lowell Cooperative Bank, a recent news release indicated. Sudbury, Mass.-based Omega claims to be “one of the oldest privately owned mortgage companies in Massachusetts” and reports closing “thousands” of loans during its 22 years in business. Lowell reports more than $96 million in assets.
Lowell Chairman and Chief Executive Officer Richard E. Bolton Jr. said in the release that the acquisition is expected to help it expand and compliments its current mortgage menu. In addition, increased compliance requirements and mortgage industry consolidation has created an opportunity to expand market share.
Subject to regulatory approval, the Omega-Lowell deal is expected to be done this fall.
The assets of Mortgage Processing Assistance Center Inc., or MorPAC, and Advantage Mortgage Services have been purchased by CCFCU Funding LLC, according to a news release last month. MorPAC and Advantage will retain their names, while the two companies’ 15 employees will move to the new organization.
CCFCU Funding is a subsidiary of Albany, N.Y.-based CAP COM Federal Credit Union. It reportedly has received approval for a New York license and has also been approved by the U.S. Department of Housing and Urban Development.
In April, Blue Bell, Pa.-based Vision Mortgage Capital was acquired from First National Bank of Chester County by Continental Bank — an $0.5 billion institution. Vision was founded by former Mortgage Bankers Association chairman Regina M. Lowrie as a division of American Home Bank which subsequently sold the lender to First National.
This month, the Philadelphia Business Journal reported that Financial Mortgage Corp. has merged with Vision and will become Vision’s Fort Washington, Pa., office. Lowrie reportedly said the merger is part of an effort to expand its operations in Continental’s footprint.
Dow Jones Newswires recently reported that Apollo Management LP, Carlyle Group and Blackstone Group LP are among firms bidding to acquire Residential Capital LLC. GMAC reportedly began shopping the mortgage unit around March.