|While recent corporate activity in the mortgage sector included at least one merger, investor lawsuits overshadowed the latest news. Meanwhile, IndyMac could see some big write downs of its held-for-sale inventory this quarter.
Among executive appointments, Bank of Commerce Holdings announced the termination of its employment contract with former President & CEO Michael C. Mayer.
The bank’s “board has determined that it is best to terminate its relationship,” the Redding, Calif.-based company’s chairman said in the statement.
Glancy Binkow & Goldberg LLP announced it is representing investors who acquired shares of American Home Mortgage Investment Corp. between April 26, 2006, and July 30, 2007, in a class action lawsuit against the bankrupt lender.
“Plaintiff claims that defendants’ material omissions and dissemination of materially false and misleading statements concerning the company’s financial performance and prospects caused American Home Mortgage’s stock price to become artificially inflated, inflicting damages on investors,” the law firm wrote.
Lockridge Grindal Nauen PLLP is also suing American Home, according to another press release. Buyer’s of the Melville, N.Y.-based company’s shares between July 26, 2006, and July 27, 2007, are the target of that firm.
Klayman & Toskes P.A. said it filed a $1 million lawsuit before the National Association of Securities Dealers against Brookstreet Securities Corp. because the company allegedly misrepresented risky collateralized mortgage obligations as “safe investments.” The law firm said it is also representing investors of Bear Stearns’ High-Grade Structured Credit Strategies and High-Grade Structured Credit Strategies Enhanced Leverage Funds in a similar lawsuit.
Other firms to face recent investor lawsuits include Luminent Mortgage Capital Inc., Thornburg Mortgage Inc. and Countrywide Financial Corp.
IndyMac Bancorp Inc.’s Baa3 issuer ratings could be downgraded, Moody’s Investors Service announced Monday. The bank financial strength rating and the bank deposits rating of its thrift subsidiary, IndyMac Bank F.S.B., was also placed under review for possible downgrade.
A review of the Pasadena, Calif.-based lender “will focus on potential charges in the held-for-sale portfolio and possible alterations to its current product and channel strategy,” Moody’s explained. Write-downs on IndyMac’s inventory are expected to be large in the third quarter, and a significant decline origination volumes will likely weigh on its profitability for the next few quarters.
NVR Mortgage Finance Inc. obtained a 1-year extension on a $125 million warehouse line with a consortium of banks including Comerica Bank, National City Bank, Washington Mutual Bank F.A. and U.S. Bank National Association, according to a recent SEC filing. The agreement was modified to exclude second liens, home-equity loans, Alt-A mortgages and subprime loans from eligible financing.
Lone Star Fund V said in an SEC filing that it has extended its tender offer for Accredited Home Lenders Holding Co. until 12:00 midnight on Sept. 12, 2007, though Accredited still has not reportedly met the terms of the agreement.
First National Bancshares Inc. and Carolina National Corp. announced a stock and cash merger agreement. The deal between the two South Carolina companies is expected to close in the first quarter 2008 and will reportedly create the ninth largest financial institution headquartered in South Carolina.
“This transaction is a key strategic move to accelerate our growth from our existing loan production office,” First National President and CEO Jerry L. Calvert said in the statement.
Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of MortgageDaily.com.
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