Residential Capital LLC’s chairman resigned, NovaStar Financial Inc. has averted bankruptcy for the time being, and Fieldstone Mortgage Co. may have found an acquirer that could help it emerge from bankruptcy.
ResCap Chairman Michael Rossi resigned on March 17 for medical reasons, parent GMAC LLC said in an 8-K with the Securities and Exchange Commission Friday. No replacement has been named, but James Jones will continue to serve as ResCap’s chief executive officer.
Reverse mortgage originator OmniHome Financing Inc. announced Sean Browning has been named CEO. The San Clemente, Calif.-based company claims to be the fifth largest U.S. reverse originator.
Morgan Stanley reported a $1.6 billion profit for the fiscal first quarter 2008 ended Feb. 29. Included in its income were mortgage proprietary trading net writedowns of around $1.2 billion.
NovaStar, which is currently operating with just a few dozen employees, reported in an 8-K filing with the SEC that it settled a judgment against it by American Interbanc Mortgage LLC for $2 million.
The Kansas City, Mo.-based company was sued by American Interbanc in 2002 over allegations that it falsely advertised on Bankrate.com, leading to a $46 million judgment against three companies, including NovaStar. American Interbanc subsequently filed an involuntary bankruptcy petition against NovaStar.
Last week’s settlement enables NovaStar to avoid a forced liquidation.
Fieldstone, which ended operations and filed for Chapter 11 bankruptcy protection on Nov. 23, 2007, has received court approval to extend an exclusive proposal period from March 22 to June 22 and an exclusive solicitation period from May 21 to Aug. 19. Fieldstone said in its request that, while it has been liquidating assets no longer needed for its reorganization, it has been extensively negotiating with parties are either interested in buying the assets or helping the company to reorganize using its existing lending platform.
“As of the date of this motion, the debtor has received proposals from several parties and is in the process of evaluating those proposals,” the filing said. “Each offer is predicated on an agreed upon plan of reorganization, as well as the funding necessary to carry that plan to consummation.”
The Columbia, Md.-based company cautioned that, given the current volatile environment, there is no guaranty it will successfully emerge with a reorganization plan.
Northern Star Financial Inc. announced it reached an agreement for a merger of its Northern Star Bank subsidiary and River City Mortgage, a subsidiary of River City Group. Also included in the deal is River City subsidiary RHS Title.
The merger with the residential mortgage banker, which will continue to operate as River City Mortgage as a subsidiary of the bank, is subject to regulatory approval. Terms of the deal were not disclosed.
The merger is expected to help the combined company double loan originations. Around 65 employees will join Northern Star.
