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Mortgage Brokers Wanted

Recent mergers, acquisitions and corporate activity

May 11, 2007


photo of Coco Salazar
As lending executives were shuffled and mortgage bankers were acquired, one company exited mortgage lending altogether while another expanded funding capabilities in anticipation of mortgage broker acquisitions.

Luminent Mortgage Capital Inc. announced it promoted S. Trezevant Moore Jr. to chief executive officer, succeeding founder Gail P. Seneca who will remain on the board of directors. Moore had served as Luminent’s president and chief operating officer since March 2005.

Mortgage lender Family Lending Services Inc. has changed its name to Standard Pacific Mortgage Inc. to “create a stronger link” with its parent company, Standard Pacific Homes, according to an announcement.

Fitch Ratings reported it downgraded Irwin Home Equity Corp.’s residential primary servicer ratings for home equity and high loan-to-value products to RPS2- from RPS2. The downgrade reflects parent Irwin Financial Corp.’s “profitability pressures, particularly given the challenges faced by the industry.”

Alesco Financial Inc. recorded an unrealized loss of $65.6 million on the mortgage-backed securities included in certain of its real estate collateralized debt obligations. The specialty finance real estate investment trust said the unrealized losses primarily resulted from interest rate volatility and general market conditions, rather than deterioration in the creditworthiness of the underlying debt securities issuers.

The law firm of Kahn Gauthier Swick LLC announced that it commenced an investigation to determine whether Fremont General Corp. violated federal securities laws by issuing a series of materially false and misleading statements during the period March 16, 2006 through Feb. 28, 2007.

Citizens Bank reported it successfully completed a merger integration with Republic Bank, which combined to form Citizens Republic Bancorp. A new advertising campaign and Web site are among the integrated efforts.

Franklin Bank Corp. announced Thursday it completed a deal to acquire Texas-based The First National Bank of Bryan.

Shareholders of MGIC Investment Corp. and Radian Group Inc. have approved the companies’ merger. MGIC is expected to complete the acquisition late in the third quarter or early in the fourth quarter.

In Lorain, Ohio, LNB Bancorp Inc. today said it completed acquiring Hudson, Ohio-based Morgan Bancorp Inc. in a $24.2 million cash-and-stock transaction.

Avelo Mortgage LLC, which acquired Senderra Funding LLC on Feb. 28, expects to merge Senderra into its operations on May 31, according to a letter forwarded by Avelo to Due to Senderra’s name recognition amongst mortgage originators, Avelo said it will do business as Senderra Funding for the purpose of originating loans.

The ratings of American International Group Inc. will not be affected from reported discussions with the Office of Thrift Supervision to assist nonprime residential borrowers serviced by subsidiary Wilmington Finance, Fitch reported. The company is looking to apply underwriting criteria developed in consideration of regulatory guidance for the loans, which were originated through AIG Federal Savings Bank

The incremental costs, booked at American General, are currently estimated to be approximately $128 million pre-tax.

AIG Financial Products Corp. announced that it has taken a “significant” minority equity stake in The REX Group, a group of home finance companies, including Real Estate Equity Exchange Inc. and Odin Investment Management LLC. AIG said its goal with Rex is to make U.S. residential real estate equity an important new asset class.

First Horizon Home Loans bought Republic Mortgage LLC, a retail and prime-focused lender based in Las Vegas, a press release stated. Terms of the deal were not disclosed. Republic, which underwrites and funds loans in-house, is reportedly Nevada’s largest employee-owned mortgage company, with $1 billion in 2006 loan originations. Republic’s four branches will become First Horizon Home Loans offices on June 1.

Prospect Mortgage Company LLC will acquire the retail operations of Opteum Financial Services LLC, according to a press release. The deal, expected to close during the second quarter, will cost Prospect $5 million.

Opteum Inc., which announced last month it would shutter its wholesale and correspondent operations and subsequently reported the sale of its $5 billion servicing portfolio, announced a first quarter net loss of $78.1 million.

“Looking forward, we intend to focus our full energies on restoring the profitability of our portfolio of residential mortgage-backed securities that consists entirely of Fannie Mae, Freddie Mac and Ginnie Mae agency securities,” the parent said.

MBI Financial Inc. said it acquired $16 million in new or increased warehouse lines from four financial institutions that will allow it to fund over $32 million in new mortgage loans.

“The additional funding commitments also improve our ability to consolidate regional mortgage brokerage companies as we will be able to fund loan volume generated by brokers we acquire,” MBI said in a written statement. “The volatility in the mortgage marketplace created by subprime weakness is generating highly attractive opportunities for MBI.”

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