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Banks Shake It Up

Banks Shake It Up

Recent corporate activity in real estate finance

September 12, 2006



photo of Coco Salazar
Bank deals dominated that latest spate of mortgage-related mergers, acquisitions and other corporate activity.

Chase said it will open 12 Michigan branches in Meijer and Kroger stores by year’s end to create the state’s largest branch banking network — with 280 locations.

Exchange of Missouri Bank entered into an agreement with the Federal Reserve Bank of Kansas City and the Missouri Division of Finance and consented to comply with certain rules of the Federal Insurance Deposit Insurance Act in order to restore and maintain the financial soundness of Exchange, according to a copy of the written agreement.

Among the steps Exchange agreed to take are to submit within 60 days a written plan to strengthen board oversight of management and operations; a written plan to strengthen its credit administration policies and practices; and a tracking system to monitor documentation and credit information deficiencies and take all steps necessary to correct documentation and credit information deficiencies, including obtaining accurate and current financial statements and evaluations/appraisals.

The Federal Reserve Board said it approved for First National Bank Group Inc. to buy up to 9.9 percent of the voting shares of Southside Bancshares Inc.

Meanwhile, the Fed announced the termination of enforcement actions against Oklahoma-based Community State Bank and West Virginia-based Bank of Gassaway.

The termination ends the written agreement Community engaged in October 2004 to consent to the FDIA by submitting, among other things, to take the steps necessary to appoint a qualified senior lending officer with responsibility for its credit functions.

The action with Bank of Gassaway involves a similar agreement executed in October 2003, in which it was required to submit revised written loan policies and procedures that address the deficiencies the Fed found, including “underwriting standards for retail loans that require employment and income verification, the acquisition of current credit reports and such other financial data as may be necessary to establish a borrower’s ability to repay the loan, and the retention of underwriting documentation in each credit file.”

On Thursday, United One Resources said its acquisition of National Credit Reports Inc. will ensure the lasting legacy of two premier mortgage credit reporting organizations under one united brand.

HF Financial Corp. announced it will purchase from Great Western Bank the rights to service mortgages held by the South Dakota Housing Development Authority and Fannie Mae, and that it will sell four branches to Great Western by early November.

The purchase of the additional servicing business pushes the value of assets of HF subsidiary, Home Federal Bank, to more than $1.9 billion and makes it the largest servicer of SDHDA loans, HF said.

Three former mortgage industry executives who worked at Global Mortgage, Union One Mortgage and Genworth Financial recently announced the launch of their nationwide contract loan processing center Option1 Processing, which is headquartered Cornelius, N.C.

In Richmond, Va., LandAmerica Financial Group Inc. announced it completed the $248.3 million stock-and-cash purchase of Capital Title Group Inc., which is expected to strengthen LandAmerica’s presence in the West and Southwest and add scale to its lender services.

The mortgage banking division of American Sterling Bank recently purchased the wholesale and retail unit of Universal Savings Bank, which together expect to originate more than $1.5 million in mortgages during its first year, according to the Kansas City Business Journal.

Savings Institute Bank & Trust Co. has signed an agreement to buy Connecticut-based Fairfield Financial Mortgage Group Inc., which has a staff of about 100 and originated more than $386.1 million in the past year, SI Financial Group Inc. announced.

Upon completion of the transaction, expected next quarter, Fairfield will operate as a federally-chartered bank with the name of SI Mortgage Group Inc. and be able to expand its origination states from 14 to all 50.

Harbourton Capital Group Inc. said it completed acquiring all the outstanding membership interests of Molton, Allen & Williams Mortgage Company LLC and merged the assets into subsidiary, Harbourton Mortgage Investment Corp.

The merged company will offer a full range of mortgage programs covering the “entire credit spectrum,” as Harbourton Mortgage, which generated volume of $722 million over the past year, is a national Alt-B, Alt-A, and subprime wholesale lender, and Molton, which had annual production of $610 million, is a privately held mortgage banker focused on agency paper to Fannie Mae, Freddie Mac and FHA/VA, according to the announcement.

Coco Salazar is an assistant editor and staff writer for


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