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Mortgage Chess

Mortgage Chess

Mergers, acquisitions and corporate activity

June 26, 2006

By COCO SALAZAR

photo of Coco Salazar
Remnants of the failed Waterfield Mortgage have started a new company. Meanwhile, controlling interest in a hard money lender has traded hands.

But first, in Starkville, Miss., NBC Capital Corp. said shareholders approved Tuesday its name change to Cadence Financial Corp. The name change will be effective at the close of business on June 28, but stock will continue to trade under “NBY” on the American Stock Exchange.

The change “aligns the name of our holding company and its subsidiary bank,” a NBC executive said in a written statement. “We believe the single corporate name and structure will provide marketing and operational efficiencies as we continue to grow our bank.”

The company has pending acquisitions in Sarasota, Fla., and Blairsville, Ga.

Cincinnati, Ohio-based Fifth Third Bank is planning an aggressive expansion, as it wants to increase its Central Florida network from 15 offices to nearly 70 by yearend 2008, according to the Dayton Business Journal.

As part of the expansion plan, Fifth Third, which entered the Central Florida market in 2004 through its acquisition of First National, will boost its mortgage operation staff from 23 at the beginning of the year to 60 employees by the end of July, the journal said.

The plan follows a downturn in deposits of $128 million from June 2004 to June 2005 primarily due to the lender’s creation of three affiliate banks and partly due to the First National merger. However, the Fifth Third’s business has increased noticeably since February, according to the article.

Home Loan Center announced Friday it will begin operating as Apollo Mortgage Group and enter nine new U.S. markets by yearend.

The Birmingham, Mich.-based lender, serving in 8 states with approximately 75 employees, will extend its footprint to New York, Tennessee, Texas, California, Washington, Massachusetts, Connecticut, Minnesota and Georgia. The company said its “virtually paperless loan process makes it cost effective to reach new markets.”

Apollo said it intends to hire about 20 people to service the new markets.

American Mortgage Acceptance Co. announced it formed a special committee to review CharterMac’s offer to acquire all the membership interests of ARCap Investors LLC.

American Mortgage reportedly currently owns 13.3% of the third-party membership interests that CharterMac proposes to purchase through its investment in ARCap’s common and preferred interests.

The proposal values third-party interests in ARCap at $210.3 million, not including CharterMac’s current 10.7 percent ownership interest in ARCap, the announcement said.

American Mortgage said its special committee will determine whether it should approve the transaction and sell its equity interest in ARCap.

Meanwhile, Virginia-based Harbourton Capital Group Inc. announced it has agreed to purchase all the outstanding membership interests of Molton Allen & Williams Mortgage Company LLC to merge it with and into Harbourton Mortgage Investment Corp. The transaction is expected to close in the third quarter.

“The ability of the combined companies to offer a full range of mortgage programs covering the entire credit spectrum, including conforming and non-conforming loan products through branch origination and operations facilities in California, Virginia and Alabama, will provide significant new opportunities for growth,” a Harbourton executive said in the announcement. “The full array of products will be offered to support the needs of each respective client base as soon as possible after we close.”

Harbourton Mortgage, a national Alt-B, Alt-A and subprime wholesale mortgage lender, originated $785 million in loans during the past year, according to the announcement.

Molton Allen & Williams, a privately held mortgage banker focusing on agency paper to Fannie Mae, Freddie Mac and FHA/VA, had volume of $671 million over the last 12 months, Harbourton reported.

Wachovia Corp. is divesting some of its subprime home equity servicing operation.

The company will sell a portion of mortgage servicing unit HomEq Servicing Corp. to Barclays Bank Plc for $469 million, according to the Charlotte Observer.

HomEq, the No. 7 servicer of subprime loans worth $43 billion, is what’s left of the Money Store Inc., which was struggling with profits when it was bought by First Union Corp. in 1998 and was shut down as part of a massive restructuring, the Observer said.

Wachovia reportedly told the publication that the broader approach needed to expand the subprime business wasn’t “consistent with Wachovia’s strategic direction.” Wachovia will continue servicing traditional mortgages, a growing business.

N.I.R. Group entered the “hard money” mortgage loan arena, as an affiliate acquired a 65% controlling interest of R&C Advisors LLC and R&C Investors LLC, according to an announcement.

As a result, the R&C units were renamed NIR Advisors LLC and NIR Investors LLC, the announcement said.

J. Randall Waterfield and Richard R. Waterfield, founders of Affinity Financial Corp. and grandsons of Waterfield Mortgage Co.’s founder, will join investments with Deborah Sturges to create a mortgage business, The Journal Gazette reported.

Sturges, who plans to oversee daily company operations in the new company, and the Waterfields each have an ownership stake in Waterfield Mortgage.

Earlier this year, Waterfield Mortgage closed mortgage operations centers in Colorado, Arizona, Illinois, and in Fort Wayne, Ind., resulting in about 800 layoffs company wide.

The new company will hire some of the Fort Wayne workers who lost jobs, according to the article.


Coco Salazar is an assistant editor and staff writer for MortgageDaily.com.e-mail: MortgageWriter@aol.com

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