Home Equity Lender Latest Takeover Buyer

Large national home equity lenders, seeking economies of scale and to increase their geographic diversity, have been buying to bulk up during 1996. Most recently, IMc Mortgage Co. announced its intent to purchase Mortgage America Inc.

IMc, a Tampa-based consumer finance company, would purchase Mortgage America for 975,000 shares of common stock. Currently, those shares are valued at about $28.3 million.

Mortgage America, Bay City, Mich., originates nonconforming loans through 30 retail offices and a direct marketing network. The company's origination volume is about $25 million per month.

Mortgage America was previously a limited partner with IMc and sold loans to the larger company.

The Michigan lender was established in 1986 by the husband-and-wife team Thomas P. and Mary Reid Laporte. Mr. LaPorte would continue as president of Mortgage America under the deal.

In other deals involving purchases of smaller companies, Aames Financial, Los Angeles, purchased One Stop Mortgage, Costa Mesa, Calif. in September; Amresco Inc., Dallas, purchased Irvine, Calif.-based Quality Mortgage, (also established by a husband-and-wife team) in October; and Contifinancial, New York, purchased three smaller lenders in the past two months.

Pricing of acquisitions in the home equity industry varies depending on origination method, said analyst Len Blum of Prudential Securities, New York. Retail originination networks such as Mortgage America command a premium, he said, in part because they help a lender establish a brand-name presence.

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