Mortgage Daily

Published On: May 9, 2006
Movers & Shakers

Mortgage mergers, acquisitions and corporate activity

May 9, 2006


photo of Coco Salazar
As Wachovia Corp. agreed to acquire Golden West Financial and Countrywide Financial Corp. defended the compensation of its founder, Fannie Mae said it will consolidate $28.5 billion in assets and liabilities.

But first, TopLine Federal Credit Union announced Thursday it hired Mary Wetterlin as general manager to develop and implement a new first mortgage division at its Maple Grove, Minnesota, headquarters. The 13-year mortgage banking veteran, who will head development of operations in the Twin Cities area, previously managed at CTX Mortgage Co., Countrywide Home Loans and Custom Mortgage and Funding.

Residential Capital Corp. is looking for a new chief financial officer to replace Davee Olson, who recently accepted to lead the company’s warehouse lending business, which is also the nation’s largest, according to an announcement Thursday.

Olson, who joined GMAC-RFC in 1987 and became CFO of ResCap in 2004, “played a key role in acquiring the warehouse lending business for GMAC-RFC more than 15 years ago and has always maintained strong ties to the business,” ResCap CEO Bruce Paradis said in the announcement.

Meanwhile, D. Keith Johnson, former president and chief executive of Washington Mutual’s subprime lending arm, Long Beach Mortgage, joined Clayton Holdings Inc. as the new president and chief operating officer, according to a recent press release.

At Long Beach, Johnson managed more than 2,500 employees and grew volume from approximately $600 million to over $3 billion per month, the statement said. He joined WaMu in 2001, after its acquisition of Bank United, as executive vice president and chief operating officer of the commercial group. His several roles at Bank United included CFO of the mortgage division.

Premium Capital Funding said Wednesday it changed its name to Topdot Mortgage. The Jericho, N.Y.-based national mortgage bank reportedly originates over $2.5 billion in residential and commercial mortgages annually.

Specialty insurer Assurant Inc. recently acquired Safeco Financial Institution Solutions Inc., the fourth largest provider of creditor-placed homeowners insurance and direct tracking services for mortgage lenders and servicers. Assurant said it will immediately begin to integrate Safeco into its specialty property business segment.

Western Alliance Bancorporation said it completed merging Nevada First Bank and Bank of Nevada with its flagship bank, BankWest of Nevada.

Combining the three Nevada banks creates a “formidable banking franchise capable of serving the diverse businesses in the fastest-growing state in the nation from Las Vegas and Henderson to the important Reno market,” Western Alliance said.

To reflect the bank’s larger geographic presence, BankWest of Nevada has adopted the name Bank of Nevada, which now has 13 offices, rather than five, and expects to add three more by year end, according to the announcement.

First Banks Inc. completed the $19.2 million acquisition of First Independent National Bank, the two companies jointly announced.

First Independent, which operated two banking offices in Plano, Texas, and was in the process of opening a de novo branch banking office in Dallas that should be operational by June, will be merged with and into First Bank, a Missouri state chartered bank on May 16, the companies said.

“First Independent’s attractive banking franchise complements First Banks’ footprint in the highly desirable and rapidly growing Dallas metropolitan market,” First Banks said.

In 2005, Countrywide CEO Angelo Mozilo was paid a salary of $2.7 million salary, $19.6 million in bonuses, stock option awards with an estimated value of $18.4 million and over $700,000 worth of perks, including $40,282 for country club memberships, $29,750 for tax and investment advice and $230,452 for personal use of company aircraft, according to a proxy statement filed with the Securities and Exchange Commission.

In total, the executive of the Calabasas, Calif.-based lender took home $160 million in pay stock-option profit, of which $119 million was the profit on previously granted stock options Mozilo exercised in 2005. The annual total, equal to 6% of Countrywide’s 2005 net income, keeps him among the state’s highest-paid executives, according to The LA Times.

Last year, Forbes magazine ranked Mozilo as the top-paid CEO within the mortgage and diversified financial services industry and the ninth-highest paid among America’s 500 biggest companies.

Nell Minow, cofounder of the Corporate Library, which tracks pay and corporate governance issues, said Mozilo’s compensation was “a mountain of pay for a molehill of performance,” the Times reported.

Brandon Rees, assistant director of the American Federation of Labor and Congress of Industrial Organizations, said the compensation is “an all too typical an example of what’s wrong in CEO pay,” adding that “use of super pensions, excessive perks, on top of astounding amounts of cash compensation is just not justified.”

Countrywide reportedly defended Mozilo’s pay, saying the company’s earnings growth “success supports the board’s belief that it has implemented an effective pay-for-performance approach that has benefited the company’s stockholders and helped position Countrywide for continued growth and success.”

In a major mortgage merger announced Monday, Wachovia has agreed to acquire Golden West, a combination that extends Wachovia’s banking franchise within reach of 55 percent of the U.S. population.

Marion O. Sandler, Golden West chairman and chief executive officer said Wachovia is the “perfect partner” to deliver the additional banking products loyal customers have been asking for.

Chief Executive Herb Sandler said the company’s sale to Wachovia should not be seen as a sign of budding problems in the mortgage industry, according to Dow Jones Newswires.

“That’s a bunch of garbage,” he reportedly said. “I’ve never heard something so irrelevant in my life.

“We’ve always been aware that being a monoline has extraordinary positives and extraordinary negatives. We’ve always been aware there’s this inherent weakness in our strategy.”

Fannie Mae will again miss its filing deadline, according to a FORM 12b-25 filing with the Securities and Exchange Commission.

The Federal National Mortgage Association, as it is formally known, said it found more accounting errors, and will be required by its regulator, the Office of Federal Housing Enterprise Oversight, “to consolidate approximately $28.5 billion of both incremental assets and incremental liabilities as of December 31, 2005.”

The filing said the $28.5 billion relates to about $25.5 billion in outstanding mortgage-backed securities and $3.0 billion in third-party securitizations in which the Washington, D.C.-based company invested.

Coco Salazar is an assistant editor and staff writer for

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