Resource Bancshares Mortgage Reports $10 Million 1Q Loss
COLUMBIA, S.C. - Resource Bancshares Mortgage Group lost $10 million, or 53 cents a share, in the first quarter after earning $11 million, or 50 cents a share, in the year-earlier period.It said most of the loss resulted from a $7.7 million writedown of residual securities the company retained from its securitizations of subprime loans. Excluding that charge, it lost $3.5 million, or 19 cents a share.
In a press release, chief financial officer Steven F. Herbert said the company is trying to securitize or sell its residuals and that it would use the proceeds to buy back its own stock. Initial feedback from potential residuals buyers led the company to believe that it would have to mark them down to avoid taking a loss on the sale, Mr. Herbert said.
Resource shares were trading Wednesday at $4.0625, 35% of its book value.
Struggling Contimortgage Sells $120 Million of Subprime Loans
NEW YORK - Carlton Advisory Services Inc. said it brokered the sale of $120 million of subprime whole loans for Contimortgage, a unit of ailing Contifinancial Corp.Carlton would not identify the buyer. Contifinancial averted bankruptcy last month when its banks gave it an extension until June 10 to repay more than $300 million. But the company said in a statement that it expects it will eventually have to file for Chapter 11.
Amresco Mortgage Unit Goes Independent in $22M Buyback
ST. PETERSBURG, Fla. - Mortgage Investors Corp. has split off from Amresco Inc., which bought it less than two years ago.Dallas-based Amresco sold the small mortgage bank back to its original shareholders and paid them $22 million. It also paid Mortgage Investors $3 million.
The move relieves Amresco from having to pay the original Mortgage Investors shareholders $86.1 million in Amresco stock and $9.2 million in cash, as called for in the August 1998 acquisition agreement.
Because Amresco's shares have plummeted since the acquisition, following through on the original agreement would have forced it to turn over majority ownership of itself to Mortgage Investors.
PNC to Process Loan Applications For Prudential Insurance Division
PITTSBURGH - PNC Financial Services Corp. said it has been hired by Prudential Bank to process home equity loan applications for Prudential Insurance Co. of America.Applications taken through the Prudential unit's Web site and call center will automatically be sent to PNC. PNC will also service Prudential Bank's $400 million portfolio of home equity loans.