Two nonconventional mortgage companies continued their acquisition strategies with more deals this month.
Contifinancial Corp. will purchase 100% of the equity of Crystal Mortgage Co., a mortgage broker, and its subsidiary Lenders M.D. Inc., a mortgage bank. Terms of the deal were not disclosed.
IMC Mortgage Corp., a Tampa-based subprime mortgage lender, announced that it has purchased mortgage originator Alternative Capital Inc. for an undisclosed amount of stock.
Large specialty finance companies such as IMC, Contifinancial, and First Plus Financial Corp. have been buying up small affiliated brokers and retail shops at a rapid clip this year.
Contifinancial has been especially active, purchasing all or part of the equity of about 10 companies in the past 12 months.
Conti's new purchase would expand its presence in the Midwest. Crystal Mortgage and Lenders M.D. originate a combined total of about $14.5 million in conforming and subprime loans per month through 14 offices in Ohio, Kentucky, and Michigan. For the next 12 months, originations are projected at $200 million.
"Crystal's ability to market directly to the consumer is an important strategic addition to our channels of loan origination," said Robert A. Major, president and chief executive of Contimortgage, Contifinancial's origination arm.
Crystal and Lenders, both based in Amherst, Ohio, were founded by David J. Moore, no relation to Contifinancial's chief executive James Moore. David Moore will continue to serve as president of both of the companies he founded.
The acquisition is expected to close in the current fiscal quarter.
The Alternative Capital purchase represents the eighth acquisition this year for Tampa-based IMC Mortgage.
Dallas-based Alternative Capital originates nonconforming loans through broker and retail outlets in Dallas and in Irvine, Calif. The company originates about $9 million in loans per month.
Founders Michael S. Petree and John R. Sisson will continue as president and vice president of Alternative for the next five years.
Alternative has had a strategic alliance with IMC since September 1996. In 1997, IMC purchased 75% of the loans Alternative generated. Many companies have pursued the same strategy, buying loans from a company first, then choosing to buy the whole shop. u
