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Lenders Long For Liquidity

Lenders Long For Liquidity

Recent mergers, acquisitions and corporate activity

September 7, 2007

By COCO SALAZAR

 

photo of Coco Salazar
As one mortgage merger squeezed through the pipeline, banks and lenders were preoccupied with liquidity and profits.

IndyMac Bancorp Inc. announced it is expecting third quarter earnings in a range of break even to a loss of $0.50 per share because illiquidity in the secondary markets. While it anticipates this quarter will likely represent a trough in earnings, it may reduce quarterly dividend payout to $0.25 per share until the market improves.

New York Mortgage Trust Inc. announced that trading of its common stock on the NYSE will be suspended because its market capitalization has fallen below the minimum $25 million threshold for at least 30 days. The company has filed an application to list its common stock on another national securities exchange.

New York Mortgage, which has sold its wholesale and retail origination operations, also noted that it has settled about three-quarters of all repurchase requests outstanding as of Aug. 6, when it reported second quarter results. The company reported a new $100 million six-month term repurchase agreement that will allow it to finance a portion of its $337 million Agency MBS portfolio.

Meanwhile, CTX Mortgage Company LLC boosted a mortgage warehouse facility agreement with JPMorgan Chase Bank to $450 million from $200 million, parent Centex Corp. said in a filing today with the Securities Exchange Commission. The new and increased facility, which funds conforming, FHA/VA-eligible or prime jumbo loans being sold to third parties, includes an “accordion feature” that extends CTX’s borrowing capacity by an additional $550 million under certain circumstances.

Centex said market liquidity has made it difficult to sell to its previous main lender, Harwood Street Funding I LLC.

Delta Financial Corp. said it priced a $900 million mortgage-backed securitization at materially less favorable terms than in past quarters, “reflecting the highly illiquid market conditions where virtually no mortgage-related securitizations are being consummated or sold.”

Anworth Mortgage Asset Corp. today announced it recently sold $692 million in face amount of its MBS holdings that resulted in a realized loss of about $21 million. About $9.5 million of the loss was from the sale of $55 million of AAA-rated Non-Agency MBS, and the rest was through $637 million of Agency MBS that as of the end of the second quarter had a carrying value reflecting an unrealized $13 million loss.

“In recent weeks, liquidity and credit concerns surrounding the subprime mortgage and commercial paper markets have continued to grow and have resulted in banks and other lenders becoming more cautious in providing repurchase agreement lending relative to both Agency MBS and AAA-rated MBS,” Anworth noted in the announcement.

Oxford Funding, however, continues to benefit from the current environment, as it announced it secured funding to purchase a multimillion-dollar portfolio of performing real estate-backed loans from a national lender. The Houston, Texas-based company indicated the deal was in line with its strategy of purchasing portfolios at a significant discount and then rehabilitating or restructuring the loans with the intention of reselling or keeping the loans to generate higher profits over the long term.

But mortgage market troubles are to blame for the dissolution of a previously announced merger deal.

MGIC Investment Corp. and Radian Group Inc. called off their pending merger, citing they mutually agreed “that current market conditions have made combining the companies significantly more challenging,” according to a joint announcement Wednesday. The companies will remain independent and withdraw all outstanding litigation between them.

Allied Home Mortgage Capital Corp. announced it added two new branches to its network, one in Atlanta, Ga., and the other in Akron, Ohio. The Texas-based company says it is the largest privately held mortgage banker/broker in the country and funded over $10 billion last year.

The Office of the Comptroller of the Currency recently approved several merger and de novo applications. These included approvals for Citibank N.A., Las Vegas, Nev., to acquire The BISYS Group Inc.; the establishment of a new national bank named Empire National Bank in Islandia, N.Y., and a de novo branch in Shirley, N.Y.; and establishment of a new national trust bank through the merging of Goldman Sachs Trust Co. N.A., New York, N.Y., into The Goldman Sachs Trust Co. N.A. in Wilmington, Dela.

Cooperative Bank announced it completed merging Bank of Jefferson into its operations last week. The action included a name change to Cooperative Bank and expansion into South Carolina.

RBC Centura Banks Inc. has agreed to acquire Alabama National BanCorporation for $1.6 billion in stock and cash. The Royal Bank of Canada subsidiary said the purchase, expected to close early next year, will strengthen its footprint in the Southeast by adding over 100 branches and eight mortgage offices to its network in Alabama and Atlanta, and in new markets in Florida.

Plano, Texas-based ViewPoint Bank announced it completed acquiring substantially all the assets and loan origination business of Dallas-based Bankers Financial Mortgage Group Ltd. The Sept. 1 purchase translated into a gain of 10 mortgage origination offices and 40 loan officers.


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


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