Private Equity Buys Former CUNA Mutual Mortgage Operation

MT. LAUREL, N.J. – In the latest round of credit union takeovers, PHH Corp. announced yesterday it has agreed to be acquired by GE Capital for $1.8 billion, then to sell the company’s vast mortgage portfolio to private equity fund The Blackstone Group. The PHH mortgage assets include those acquired in November 2005 from CUNA Mutual comprised of 100,000 residential mortgages and a $12 billion servicing portfolio. The unusual deal comes a year after PHH was spun off from Cendant Corp., a deal which has left its financial records a mess and prevented the company from filing its quarterly and annual financial statements with regulators and investors. PHH Mortgage is the nation’s 11th largest mortgage bank, with a servicing portfolio of around $150 billion. The deal for the CUNA Mutual mortgage assets comes amidst a reshuffling of the credit union outsourcers, with recent takeovers of Open Solutions, Digital Insight, John H. Harland Co., and the pending acquisition of Corillian Corp.