PHH Deal in Trouble

MOUNT LAUREL, N.J. – Private Equity fund the Blackstone Group continues to have trouble raising financing for its part of the PHH Corp. takeover, lending doubt the acquisition of the largest mortgage bank for credit unions will be completed. Wall Street sources said Blackstone still has not resolved a funding shortfall in its plans to buy PHH’s mortgage business, after GE Capital buys the whole company, endangering the deal. PHH Mortgage includes the remnants of CUNA Mutual Mortgage and its $12 billion servicing portfolio, which it acquired in 2005. PHH shareholders approved the $31.50-a-share GE deal last month, but the deal hinges on GE being able to sell the mortgage business. Terms of the deal call for GE to keep PHH’s fleet management operations.