|Another investment banking firm is negotiating the acquisition of a subprime wholesale lender.
Credit Suisse is in discussions to purchase stock or assets of ResMAE Financial Corp., including its ResMAE Mortgage Corp. subsidiary, according to Credit Suisse.
The bank signed an option agreement on January 16 giving it the exclusive right to purchase 100% of outstanding shares or “certain agreed upon assets” of the parent company. The option expires on Feb. 9.
Brea, Cal.-based ResMAE is a wholesale mortgage company specializing in originating and servicing subprime mortgages.
In October 2003, ResMAE received an equity investment of $25 million from TH Lee Putnam Ventures, an affiliate of buyout firm Thomas H. Lee Partners and money manager Putnam Investments. If Credit Suisse purchases only assets from ResMAE — that investment would not be affected, according to a Credit Suisse spokesman.
But if Credit Suisse purchases all of ResMAE’s outstanding shares it would have to negotiate with Putnam Ventures, the spokesman said.
At the time of Putnam Ventures’ investment, ResMAE co-founder Ed Resendez said ResMAE may opt to go public or sell the company in three to five years.
ResMAE, which is licensed or qualified to conduct business in all 50 states, claims to have funded some $16 billion in loans since its founding in January 2003. It has seven regional processing centers in California, Florida, Hawaii, Illinois, New Jersey and Texas.
Last November, it became one of the few lenders to add a 50/30 loan product to its loan products, which already included a 40/30 loan.
Jerry DeMuth is an award winning journalist who has been reporting for four decades.
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