A flurry of mergers and acquisitions made the news in the last 30 days, the biggest an agreement by Mellon Bank to buy Metmor Financial Inc. from Metropolitan Life Insurance Co. for $165 million.
And a bigger deal by another insurance company is being played out. Platoons of number crunchers have been performing due diligence on Prudential Home Mortgage Corp. in preparation for what may prove to be the biggest mortgage acquisition in history.
The giant Pru, with a $75 billion portfolio of servicing rights, could sell for as much as $1 billion, according to some estimates. But the question has arisen whether a single buyer or group would buy the entire Pru mortgage business.
Only two bidders appear to be interested in the whole pie: GE Capital Mortgage Corp. and a group led by BancBoston Mortgage Corp. Several others are expected to bid for parts of the business.
One deal that never happened finally had some closure this month. Bank of New York, convinced it could not find a buyer for its Arcs Mortgage unit in Calabasas, Calif., began to shut it down in spring of this year.
It sold its portfolio of servicing rights and managed to find takers for some of its offices and staff. On Aug. 1, it announced that the last piece of the company, its commercial mortgage unit, had been sold back to Howard Levine, the founder of Arcs.
Mr. Levine was joined in the purchase by two California real estate investors, Marshall Ezralow and Gary Leff.
The former Arcs unit has been a major national apartment lender under Fannie Mae and Freddie Mac programs. At year end 1994, Arcs was the No. 1 servicer of Fannie's DUS apartment loans, with more than $1 billion serviced.
A staff of 35 experienced employees will oversee the new operations, most of them coming from the former Arcs Mortgage Inc.
Another deal that hasn't happened is the sale of Knutson Mortgage Corp., which like several other companies put itself on the block when the refi boom collapsed. Unable to find a buyer, it appears to be setting its sights on expansion instead.
It recently hired two top executives away from GE Capital Mortgage Corp. (see related article, this page). Knutson has made strides in building its servicing portfolio amid industrywide loan contraction.
