A new joint venture promises to help subprime mortgage bankers unload defaulted loans. Meanwhile, a Texas-based fund prepares to close on its acquisition of a subprime lender as class action attorneys file litigation against two other lenders.
Before that, Network Mortgage Services announced it named Kevin C. Lane President, replacing James R. Blodgett, who will remain as chairman and chief executive officer.
Countrywide Financial Corp. appointed President and Chief Operating Officer David Sambol to its board of directors. The Calabasas, Calif.-based lender credited him as “a driving force behind Countrywide’s long-term growth over the years” and instrumental in building the company’s principal mortgage originations and servicing operation.
Schiffrin Barroway Topaz & Kessler LLP said it filed a class action lawsuit against Impac Mortgage Holdings Inc. on behalf of investors who bought Impac securities from May 10, 2006, through August 15, 2007. The lender is being accused of failing to disclose or misrepresenting material adverse facts about its financial condition.
E*TRADE Financial Corp. also faces a class action lawsuit for allegedly issuing materially false and misleading statements about its business. Coughlin Stoia Geller Rudman & Robbins LLP announced the lawsuit is on behalf of purchasers of E*TRADE common stock between Dec. 14, 2006, and September 25, 2007.
The Federal Reserve yesterday announced it terminated a February 2004 cease and desist order against Cowboy State Bancorp Inc. As part of the order, Cowboy had agreed to address deficiencies at the bank in order to restore and maintain financial soundness, including submitting a plan to maintain effective control and supervision of major activities such as the credit risk management program, including loan underwriting, documentation, grading, and administration.
Security Bank Corp. warned it expects loan loss charges of as much as $20 million during the rest of 2007. Citing mortgages secured by Atlanta-area properties, the Macon, Ga.-based company said the weak residential market prompted the charge.
German-based Deutsche Bank said Wednesday it expects to write down a reported $3.1 billion in losses for the third quarter, or a $2.2 billion-euro charge for leveraged loans and loan commitments, structured credit products, and residential mortgage-backed securities. The anticipated charges come after Deutsche’s warning last month that “turbulent” market conditions during August impacted its mark-to-market valuations in the leveraged loan and trading books, though it was not exposed to further deterioration in U.S. subprime mortgages across its books.
Capstead Mortgage Corp. said it generated net proceeds of approximately $105.5 million through the closing Tuesday of its pubic offering of 11.5 million common shares, including the full exercise of a 1.5 million share over-allotment option granted to the underwriters. Among other things, the proceeds will be used to finance purchases of additional adjustable-rate mortgage RMBS guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae.
MFA Mortgage Investments Inc. plans a public offering of 5.5 million common shares to raise money to acquire additional high quality MBS, and other things such as repayment of repurchase agreements.
Dalton Investments LLC announced it formed a joint venture with Beach Front Property Management Inc. to restructure defaulted loans it buys from mortgage servicing companies at significant discounts, with the goal of turning them into profitable investments while allowing borrowers more affordable payments.
The “subprime market is just beginning to unwind and we expect defaults and foreclosures to skyrocket over the next six to 12 months,” the two companies noted.
TD Bank Financial Group announced it will purchase New Jersey-based Commerce Bancorp Inc. in an $8.5 billion deal consisting of 75 percent stock and the rest cash. The acquisition, expected to close by April, will reportedly double the Canadian bank’s scale of U.S. banking business and make it the seventh largest bank in North America, based on branch locations.
First Defiance Financial Corp. plans to extend its current Ohio and Indiana footprint into the southeastern Michigan market through the acquisition of Pavilion Bancorp Inc. The $55.7 million deal is expected to close late in the first quarter 2008.
Lone Star Fund V L.P. said that its tender offer for the common stock of Accredited Home Lenders Holding Co. is on track to close by the scheduled expiration on Oct. 5 at midnight, assuming that more than half of Accredited’s outstanding shares have been tendered by the deadline. If less than half are tendered, Loan Star can terminate the tender offer or extend it up to 10 business days more.
