Preparing to complete its exit from the mortgage origination business, Hamilton Financial Services Corp. has struck a deal to sell its two remaining wholesale production offices.
The San Francisco-based company, which has shed 32 branches nationwide since January, said Monday that it is selling two California offices to New America Financial, a Dallas-based mortgage banker.
Terms of the deal were not disclosed.
Hamilton said it will now focus on servicing and subservicing home mortgages. It services $1.2 billion of home mortgages, and handles servicing functions for $1 billion of loans owned by other companies.
Hamilton is the latest in a string of mortgage lenders to quit the business this year. In particular, midsize companies like Amsouth Mortgage Co. and Wachovia Mortgage Co. have been exiting, citing an inability to operate as efficiently as large originators.
While Hamilton is shifting its focus to servicing, it will keep a hand in the origination business through a subsidiary, said Richard Ransom, vice president. The unit, Hamilton Carter Smith & Co., makes loans of lesser credit quality, known as B and C loans.
Mr. Ransom said Hamilton's rivals were able to underprice it on mortgages with the highest credit quality.
"It is extremely difficult for small to medium sized independent mortgage bankers to compete with the large players on the origination side," he said. In addition, he asserted, "we got an attractive offer for the branches and the pipeline."
The sale comes after a group of investors pressed Hamilton to consider a sale. In August, the group, which represents 5.88% of shareholders, told the Securities and Exchange Commission and Hamilton's board that it was dissatisfied with the company's performance and believed a sale would provide the most value to shareholders.
