Banks Forge Ahead

Standard and Poor’s recently said that U.S. Bancorp is among the six financial holding companies placed on its CreditWatch with positive implications. The news followed recognition of U.S. Bancorp as the fourth-safest financial holding company in the nation, based on a collective analysis of debt ratings.

The others reportedly are the five major national financial institutions, Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co., U.S. Bancorp and Wells Fargo & Co.

While the sale of Option One Mortgage Corp. is still being determined, Moody’s announced that such a move may impact the company’s servicing stability assessment and overall servicer quality ratings as a primary servicer of subprime loans and as a special servicer.

The “rating assessment will focus on the financial capability of a new ownership structure as well as the overall impact on servicing operations and performance,” Moody’s said.

Fannie Mae agreed to pay $2.6 million to Franklin D. Raines, the former chief executive who exited the company in December 2004 following an accounting scandal.

The agreement serves as a partial settlement of arbitrator proceedings Raines initiated against the company in which he claimed that Fannie improperly purported to waive the requirement in his employment contract that he provide six months’ notice before retiring. The arbitrator ruled that the effective date for Raines’ retirement should have been June 22, 2005, six months later than Fannie had determined.

ECC Capital Corp. reported a third quarter loss of $53.9 million. The Irvine, Calif.-based company, which will sell its subprime wholesale mortgage unit to Bear Stearns Residential Mortgage Corp. by yearend, said the quarter loss was mainly due to a $42.6 million loss in the mortgage banking segment, which primarily reflected continued poor sales execution.

In Wellesley, Mass., several CENTURY 21 offices announced the formation of CENTURY 21 Commonwealth, which provides mortgages among other services.

In an update announcement, Saxon Capital Inc. said its pending acquisition by Morgan Stanley Mortgage Capital Inc. is expected to be completed in early December and that it does not expect to pay a final dividend due to a loss it will incur for real estate investment trust taxable income purposes.

Sky Financial Group Inc. announced it completed acquiring Wells River Bancorp Inc. and subsidiary Perpetual Savings Bank on Wednesday. As part of the transaction, Wells’ subsidiary Perpetual Savings Bank will merge with and change its brand to Sky Bank in early December.

Sterling Financial Corp. received regulatory approval from the Federal Deposit Insurance Corp. to acquire FirstBank NW Corp. in deal scheduled to close Nov. 30., according to a press release.

TD Bank Financial Group, which currently owns about 57 percent of the outstanding shares of common stock of TD Banknorth Inc., will acquire the remainder in a deal in which the aggregate consideration payable is expected to be approximately $3.2 billion, according to a press release Monday.

Bank of America Corp. Monday announced it agreed to acquire U.S. Trust Corp. from Charles Schwab Corp. in $3.3 billion cash deal expected close March 31, 2007. With the acquisition, BoA said it will become the top financial services company managing private wealth in the nation.