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Florida Lender Cuts 75 Jobs

Florida Lender Cuts 75 JobsPreferred operating venture with Wells Fargo

February 25, 2008

By JERRY DeMUTH

A Florida-based mortgage banker is adopting a new business model and plans to eliminate 75 positions by July.

Preferred Home Mortgage Co. will lay off the administrative workers from its Tampa headquarters beginning in April and finishing in July, according to company spokesman Tom Becker.

“The layoffs will be staggered and will involve such administrative positions as accounting and human resources,” Becker told MortgageDaily.com. “Loan officers and others out in the field will still be needed and will still be working.”

He noted the move was partly the result of the company’s venture with Wells Fargo.

“Wells already has those positions in place,” he explained.

Preferred’s parent, Hollywood, Fla.-based homebuilder TOUSA Inc., filed for protection under Chapter 11 of the U.S. Bankruptcy Code on Jan. 29 in order to “fix its balance sheet,” according to the company. That filing did not affect Preferred or Alliance Insurance & Information Services and Universal Land Title Inc. — two other subsidiaries of TOUSA, which operates in 10 states.

But Preferred will now operate as an affiliate of Wells Fargo under the terms of a joint agreement.

Preferred entered into that agreement with Wells Fargo Venture LLC on Jan. 28 to form a limited liability company to be known as PHMCWF, LLC, but that will do business as Preferred Home Mortgage, according to a Feb. 19 filing with the SEC.

Wells Fargo Ventures will own 50.1 percent of PHMCWF, with the balance owned by Preferred, according to the filing. PHMCWF will then operate as an affiliate of Wells Fargo and will be managed by a committee of six, three from Preferred and three from Wells Fargo.

A revolving credit agreement with Wells Fargo Bank NA will provide for advances of up to $20 million to Preferred Home Mortgage, according to the SEC filing.

In addition to its Tampa headquarters, Preferred Home Mortgage has six other offices in Florida, three offices in Texas, and single offices in Arizona, Colorado, Maryland, Nevada, Tennessee and Virginia, a total of eight states.

It offers 15-, 20- and 30-year fixed-rate mortgages and 10/1, 7/1, 5/1 and 3/1 adjustable-rate mortgages.


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