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Mortgage Web Sites Among Recent Mergers

Mortgage Web Sites Among Recent MergersMortgage-related merger and acquisition activity

February 11, 2005

By COCO SALAZAR

Recent merger activity includes deals from New York to California.

The Federal Reserve Board announced Friday that it approved the proposal by Webster Financial Corp. to acquire Eastern Wisconsin Bancshares and its subsidiary depository institution, State Bank of Howards Grove.

The Waterbury, Conn.-headquartered acquirer, which will still rank as the No. 48 largest U.S. depository organization, proposed to merge State Bank into Webster Bank after consummation of the transaction and operate it until selling it to another financial institution, the Fed reported.

Webster Bank, which originated $105 million in mortgages in 2003, has several branches in the Northeast, while State Bank operates one full-service branch and one loan production office in Wisconsin, the Fed said.

On Tuesday, however, Webster announced it signed a purchase and assumption agreement to sell the two branch offices of State Bank. While it would divest the branches, it intended to keep State Bank’s health savings account deposits and loans.

The divestiture transaction requires regulatory approvals and is subject to the anticipated completion of Webster’s acquisition of Eastern in this quarter, the announcement said.

In Los Angeles, e-commerce site operator CarsDirect recently announced its acquisition of several mortgage Web sites from Myers Internet Inc.

Myers, based in San Jose, Calif., says it hosts 40% of all mortgage originator sites. The company originated the first online mortgage in 1992 and created the first online loan application in 1994, according to chief executive Warren Myer.

CarsDirect took under its arm Myers’ mortgage lead technology platform and its consumer brands, BestRate.com and LoanApp.com.

“For the past 10 years we have been the clear market leader in the mortgage Web hosting business and we will now focus on our core Web hosting business for the mortgage and real estate categories,” Myer said.

CarsDirect said the additions will accelerate the growth of its mortgage business and complement its two current consumer-facing mortgage sites, LoanStore.com and CheckInterestRates.com.

“The Myers mortgage lead technology platform and its premier consumer websites enable CarsDirect to more rapidly acquire consumer traffic, mortgage customers and top tier banking partners,” said CarsDirect chief executive Bob Brisco in a written statement.

In the recent acquisition of Hudson River Bank & Trust, First Niagra Bank also acquired the minority ownership in Homestead Funding Corp., of Albany, N.Y., according to an announcement.

Homestead continues to operate in the state of New York under the name “First Niagra Mortgage,” which became effective Jan. 14, 2004, the announcement said.

Homestead will reportedly provide services to the markets served by First Niagra’s 68 branches in Eastern New York and will also operate the $300 million a year-plus mortgage origination operations of Hudson River Mortgage. The loan origination staff of Hudson River and First Niagara will join Homestead.

The relationship will add more products to Homestead’s line, which include second mortgage, VA, FHA, no-income verification and alternative lending options.

“This association will help our company grow revenues with the name recognition of a major banking institution,” said Homestead president and majority stockholder Michael Rutherford in a written statement.


Coco Salazar is an assistant editor and staff writer for MortgageDaily.com.email: s3celeste@aol.com

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