Victoria Mortgage, Once Eager to Grow, Shuts Down

Yet another small mortgage company bites the dust.

After a few failed attempts to grow through various channels, Victoria Mortgage Corp. has shut its doors and is liquidating its assets, according to industry sources familiar with the company.

The moves came less than a year after Jeffrey E. Stiefler was named chairman of Victoria's board of directors and announced aggressive expansion plans. Calls to Mr. Stiefler, a former president of American Express Co., and to Jay Fuller, Victoria's chief executive, were not returned.

One Wall Street dealer who worked with Victoria said he had received a memo from the lender July 15 that said the company was no longer funding loans. The memo cited increased competition and a drop in profits as reasons for exiting the business, the dealer said.

"Our intention is to grow our origination business extremely rapidly over the next three to five years," Mr. Stiefler told American Banker in March. In that interview, Mr. Stiefler said he wanted Victoria to be among the top 10 or 20 originators in its markets.

McCown DeLeeuw & Co., a San Francisco-based venture capital firm, owns 60% of Victoria. It bought Victoria Savings Bank, San Antonio, from the Resolution Trust Corp. in 1991. A year later, it bought Western Bank Mortgage Co., Irvine, Calif.

The servicing operations were merged in San Antonio, but corporate headquarters was shifted to Irvine. Calls to McCown & DeLeeuw were not returned.

Other venture capital and investment groups have been selling mortgage company assets recently. DLJ Merchant Banking last week sold First Franklin Financial Corp. to BankAmerica Corp.'s Continental Illinois Venture Corp. And Lewis Ranieri's investment firm, Hyperion Partners, is selling part of its interest in Bank United of Texas.

In 1995, Victoria originated about $600 million of residential mortgages through retail and wholesale operations in California, Colorado, Nevada, Oregon, Texas, and Washington.

A deal to sell Victoria to First Town Mortgage, Secaucus, N.J., fell apart in late 1994. It had been announced in June of that year, and it was to have created a company with a $5.1 billion servicing portfolio.

The president of First Town, Peter R. Norden, was to have run the company. Mark Posnick, chairman of Victoria at the time, said the deal collapsed after talks reached an impasse.

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