First Town Mortgage Corp., Secaucus, N.J., has bought HomeSouth Mortgage Corp., Atlanta. HomeSouth originated $250 million of loans last year.
First Town, a large lender on the Eastern Seaboard, already has three offices in the Atlanta area. The HomeSouth deal will give it seven more throughout Georgia.
"It's a natural joining of forces," said Peter R. Norden, president of First Town. "The combined company becomes the third-largest home mortgage provider in the Atlanta metropolitan region. Our goal is to be No. 1 within 12 months."
First Town recently acquired a wholesale mortgage company in Houston and says it remains acquisition-minded.
HomeSouth is headed by the husband-and-wife team of James Matthews, chief executive officer, and Vicki Matthews, president. They have more than 20 years of management experience in the mortgage industry. The couple founded HomeSouth eight years ago.Two mortgage banking companies in Atlanta were acquired last week by corporations outside Georgia.
HomeSouth was the second Atlanta mortgage company to be sold last week. The largest lender in the city, HomeBanc Mortgage Corp., was bought earlier in the week by First Tennessee Bank, Memphis, which has been an active acquirer in recent years. HomeBanc originated $600 million of residential loans last year.
Ken Glass, president of the group for First Tennessee that oversees the company's mortgage business, said, "Our goal is to provide a centralization of back room services for HomeBanc, such as loan servicing and accounting, while leaving local management intact to concentrate on increasing production."
Patrick S. Flood, a HomeBanc principal who is staying on as president of the unit, said, "The mortgage banking industry is clearly in transition. In order for HomeBanc to continue to grow, we felt that an affiliation with a large national concern was in our best interest."
None of the companies disclosed a purchase price.