MOUNT LAUREL, N.J. – PHH Corp., which operates the largest mortgage bank for credit unions, announced yesterday, New Year’s Day, it has terminated an agreement to be acquired by GE Capital after private equity firm the Blackstone Group failed to raise financing for the purchase of PHH’s mortgage business from GE.
Under the proposed deal, GE was to pay $1.8 billion for PHH and GE was supposed to retain PHH’s vehicle fleet company, with Blackstone acquiring the mortgage operations, along with its credit union portfolio.
PHH, which has had a long-term business with credit unions, became the largest third-party provider of mortgage loans through credit unions when it acquired CUNA Mutual Group’s mortgage business in 2005. That consisted of 250,000 residential mortgages valued at $13 billion and relationships with more than 2,000 credit unions.
PHH said yesterday it is requesting a $50 million break-up fee from Blackstone because of the failure to close the deal.
