Hamilton Financial Corp., San Francisco, has announced it will subservice $750 million of residential mortgages for two originators.
As part of the agreement, future loan originations by these two companies will also be subserviced by Hamilton.
President William Rast has said Hamilton plans to become a large subservicer, using its servicing center in Scottsbluff, Neb. Earlier this year, Hamilton had made a deal to subservice $120 million of residential mortgage loans.
The latest deal could take some of the pressure off Hamilton's management. Some shareholders have been saying the company should consider putting itself back on the selling block.
One group, which owns 5.88% of the company, said in a filing with the Securities and Exchange Commission in August that it was dissatisfied with the company's performance and believed a sale would bring "maximum value" to shareholders.
Hamilton took itself off the auction block in March after a futile five- month search for a buyer that was precipitated by a widespread slump in wholesale lending, its primary business. When the plan to sell was announced, Hamilton also said it had suffered $11.25 million in losses for 1994.
In January of this year, Hamilton announced it was laying off 120 employees to consolidate and reduce costs. At the time, its 18 wholesale production centers were consolidated into eight. It closed its national correspondent division in Minneapolis and its retail loan origination branches in Virginia, Maryland, and Idaho.
Mr. Rast said the consolidation would allow Hamilton to optimize its production capabilities and achieve greater operating efficiencies.
Earlier this year, David Piper, Hamilton's vice president in charge of subservicing, said that Hamilton was seeing an increase in interest from California servicers because of the high cost of servicing loans there. To save money on servicing costs, the company moved its servicing site to Nebraska, receiving a grant from the state, .
Hamilton currently services $2.25 billion of loans, of which $1 billion is subservicing.
