Finova Group Inc. said its commercial mortgage division is quitting the securitization business and will instead act as an origination arm for J.P. Morgan & Co.
The Phoenix finance company was the eighteenth-largest securitizer of real estate loans in the first nine months of the year, contributing $632 million of collateral to bond issues, according to the industry newsletter Commercial Mortgage Alert. But under its new arrangement with J.P. Morgan, Finova Realty Capital will only originate and close loans. Morgan will fund the loans, warehouse them on its balance sheet, and securitize them with other loans the banking company itself has originated. It has securitized $1.7 billion this year, making it the No. 7 contributor of loans to commercial mortgage-backed deals.