WMC Mortgage has hired Carl F. Geuther, formerly of Great Western Financial Corp., as its chief financial officer
Mr. Geuther, who came to Great Western in 1987 and was CFO when it was bought by Washington Mutual Inc. in July, started with WMC two weeks ago, said WMC chief executive officer Scott A. McAfee.
WMC Mortgage, formerly known as Weyerhaeuser Mortgage Co., is rapidly growing its subprime lending division, WMC Equity Services.
Mr. McAfee said Mr. Geuther will help WMC to avoid some of the financial difficulties that have plagued other subprime lenders. "In the subprime business, with all the people getting in trouble with accounting, it is terrific to have someone of Carl's ability," Mr. McAfee said.
Several subprime auto lenders have reported accounting snafus this year and on the subprime mortgage side, Aames Financial has had problems as well.
Mr. Geuther has subprime experience. He was chief financial officer of Aristar Inc., a consumer finance company that Great Western acquired in 1983.
Jonathan Gray, a Sanford C. Bernstein analyst who followed Great Western until it was acquired earlier this year by Washington Mutual, praised Mr. Geuther's analytical skills and his straightforwardness. "He would be quite harsh on his own company's performance. He would make no excuses," Mr. Gray said.
The hiring of a veteran chief financial officer could also help WMC in its transition from private firm to public company. Mr. McAfee said the company does not need an equity infusion right now. But he did not rule out a public offering, saying that sometime in the next year the company could need additional capital to finance growth in the subprime division.
WMC is stressing the subprime business more since Weyerhaeuser Co. sold the company earlier this year to WMC Acquisition Corp. The partnership was formed by Apollo Partners, a firm run by renowned financier Leon Black, and Spring Mountain Escrow, a company that Mr. McAfee also runs.
Stephen M. Wright, president of WMC Equity Services, said his division is on track to originate $2 billion in subprime mortgages this year, mostly from wholesale channels. Mr. Wright WMC Equity Services aims to originate $3 billion in 1998, with more of the total coming from retail production. WMC would like to buy companies that originate between $2 and $5 million a month, Mr. Wright said.
"We're looking for companies that want to grow but can't because of capital restraints," he said.
Mr. Wright said two companies have responded to an advertisement in trade publications in which WMC is seeking small retail companies to acquire.
