GreenPoint Financial Corp. said Monday it would expand its specialized lending activity by buying BankAmerica Corp.'s manufactured-housing business for about $700 million.
BankAmerica Housing Services, comprising 45 offices and 1,500 employees, is the second-largest manufactured-home lender in the nation, behind Green Tree Financial Corp.
GreenPoint has agreed to buy BankAmerica's $10 billion servicing portfolio and another $800 million of loans expected to be originated before the deal closes.
John Wheeler, head of BankAmerica Housing Services, would continue to run the unit.
The deal, expected to close in the third quarter, would be financed with a $575 million offering of GreenPoint common stock.
Manufactured-housing lending is similar to GreenPoint's no-documentation mortgage business, said Thomas S. Johnson, chief executive officer of GreenPoint.
The no-documentation operation and the manufactured-housing unit are both leading, national market players with "solid growth prospects," and both have "premium pricing and prepayment speeds slower than conventional mortgages," he said.
GreenPoint, the leading no-documentation lender, originated $2.9 billion such mortgages in 1997.
Analysts applauded GreenPoint's strategy.
"They're definitely building a very interesting national consumer/specialty finance origination network," said Chad Yonker, analyst with Fox-Pitt, Kelton in New York. "They're trying to create something that has a better value than a traditional thrift organization."
The manufactured-housing unit, which BankAmerica acquired through its Security Pacific Corp. purchase in 1992, has been on the block since October.
BankAmerica was hoping for a higher price, Mr. Yonker said, but the interest rate environment brought down the price because a high percentage of the loans the unit originates have adjustable rates.
Such loans are "potentially more vulnerable to prepayments," he said.
NationsBank, which said Monday it would merge with BankAmerica, has been beefing up its manufactured-housing business.
In February, John Brink, head of NationsBank's mobile-home unit, said he was hoping to build the unit into a "force for other lenders to contend with."
But the former Green Tree chief executive said he preferred to build the unit himself rather than buy one.