A sale of Weyerhaeuser Mortgage Co. could be announced as soon as early February, sources close to the company said.
Donald E. Lange, president and chief executive of the Woodland Hills, Calif.-based mortgage bank, said several companies had expressed interest in the unit and added that some of them are not in the mortgage banking business.
Last September, Weyerhaeuser's parent, paper and forest products giant Weyerhaeuser Co., announced that it hired Goldman, Sachs & Co., New York, to explore strategic options for the mortgage unit, including a possible sale.
Mr. Lange said that one of the interested parties is a large mortgage bank, but that the other prospective buyers are companies that are not in the conventional mortgage industry right now. He added that one of the companies exited the business a few years back and now wants to reenter it.
A spokeswoman for Federal Way, Wash.-based Weyerhaeuser confirmed that there are "more than a couple" of parties that have expressed interest in the unit, but she would not put a time frame on when a sale could be announced. She added that no bidding was going on for the mortgage unit.
"A lot more is involved here than just price. Weyerhaeuser is very concerned about the impact a sale would have on employees," she said.
Mr. Lange said that given the nature of the companies expressing interest in the unit, he thinks it is unlikely Weyerhaeuser Mortgage would be dismantled unless a large mortgage bank purchased it.
Weyerhaeuser has more than 50 production offices in 15 states, but is relatively small on the servicing side. The company sold about $5 billion in servicing last year, and its portfolio is now about $4 billion.
But industry observers said that there had been increased interest in retail origination capacity because of relatively low interest rates. And Weyerhaeuser's main geographic focus is in California and other western states, markets that analysts say are attractive now.
Some observers said finance companies without a strong presence in California might be interested in Weyerhaeuser to make inroads into this market and to diversify their loan originations.
Mr. Lange said that Weyerhaeuser has a subprime lending unit but that most of the loans are A-minus and B loans, while many of the finance companies focus on lower-quality C, and even D, loans.
