CWM Mortgage Holdings, one of the nation's largest mortgage conduits, is seeking to shape its own identity.
CWM, which stands for Countrywide Mortgage, was founded by Countrywide Credit Industries, the nation's second-largest mortgage lender.
In June, at CWM's annual meeting, shareholders will vote on changing its name to INMC Mortgage Holdings Inc. CWM, which is based in Pasadena, Calif., owns Independent National Mortgage Corp., known as Indy Mac.
If the name change is approved, the stock's ticker symbol would change from CWM to NDE.
Indy Mac buys and securitizes jumbo and other nonconforming loans such as subprime mortgages. These loans cannot be bought by Fannie Mae and Freddie Mac, which also package mortgages into securities.
Michael W. Perry, CWM's president and chief operating officer, said CWM agreed earlier this year to buy the company that manages it-Countrywide Asset Management Corp., a subsidiary of Countrywide Credit Industries. He said a new name for CWM made sense because it would put Indy Mac in the spotlight.
If the purchase is approved by shareholders, CWM will issue about 3.6 million shares to Countrywide, which would become CWM's largest shareholder, holding about 10% of the equity. On the basis of current stock prices, the shares would be worth about $71 million.
This amount would have to be accounted for as a one-time loss because the Securities and Exchange Commission said CWM should account for the acquisition as the settlement of a contract, Mr. Perry said. The company had originally planned to use purchase accounting, amortizing the cost of issuing the shares over several years.
Mr. Perry said the charge will occur in the quarter that the transaction closes. The deal would not affect CWM's dividend payments. CWM is a real estate investment trust and is required to pay most of its net income as dividends to shareholders in exchange for exemption from taxes on its earnings.
E. Gareth Plank, an analyst with UBS Securities, said CWM's close affiliation with Countrywide has been a mixed blessing. He said that CWM's relationship with Fannie Mae and Freddie Mac was helped. But some Countrywide competitors have been reluctant to do business with CWM, he added. "CWM sometimes gets put in the penalty box," Mr. Plank said.
CWM would continue to share several of its top executives with Countrywide.
Indy Mac also operates a manufactured housing division. CWM has two other subsidiaries, Construction Lending Corporation of America, an originator of construction loans for builders and consumers, and Warehouse Lending Corporation of America, a provider of short-term financing to originators.
