Servicing Start-Up

Residential Credit Solutions Inc., a Fort Worth start-up, has purchased the Los Angeles servicing platform of Aames Investment Corp. and the servicing rights on $700 million of loans from Accredited Home Lenders Holding Co., which bought Aames last year.Residential Credit did not say how much it paid for the platform, which has 79 employees. It announced Wednesday that it had raised $125 million from Equifin Capital Partners and Och-Ziff Capital Management.

The Texas firm plans to invest in and service mortgages that have underwriting and documentation issues, perform poorly, or have special servicing requirements.

"The weakened underwriting standards of residential mortgage originators, in combination with the cooling off of the housing market, makes this an attractive time to build the company," Dennis G. Stowe, the chief executive of Residential Credit, said in a press release.

Until 2004, Mr. Stowe was the president and chief operating officer at Saxon Capital Inc. (which Morgan Stanley recently bought). Residential Credit's chief administrative officer, Mark Rogers, was an executive vice president at Saxon's lending unit, and its chief financial officer, Robert Harry, has been the CFO at Walter Mortgage Co., Transamerica Mortgage Co., and Portfolio Acceptance Corp.


Winter Purchase

Terwin Holdings LLC, a privately held New York securitizer that does business as Winter Group, has expanded its mortgage due-diligence service offerings by buying Hanover Capital Mortgage Holdings Inc.'s due-diligence business for $1.2 million.Hanover Capital in Edison, N.J., announced the sale on Wednesday. It closed Jan. 12.

Terwin, which was founded by Richard Winter and other veterans of Donaldson, Lufkin & Jenrette and Credit Suisse, said the purchase would complement its due-diligence operation in Denver.


Ghost Marketing

Jackson Hewitt Tax Service Inc. appears to be targeting a younger demographic for its Money Now loan, if a recent television commercial featuring the title character from the forthcoming film "Ghost Rider" is any indication.In the ad, Marvel Comics' hell-sent, motorcycle-riding avenger applies for the loan. An unfazed Jackson Hewitt representative must extinguish the W-2 he gets from the Ghost Rider's smoldering fingers, but it would not necessarily have mattered if the slip of paper had burned to ash — W-2s are not required to get the loan until Jan. 26. (The movie starring Nicholas Cage is scheduled for release next month.)

Refund anticipation loans (which require W-2s) and pay stub loans (which do not) have become increasingly important in the tax preparation business. Jackson Hewitt in Parsippany, N.J., used the pay stub product to lure hundreds of thousands of customers away from its Kansas City, Mo., rival H&R Block Inc. during last year's tax season.

In November, H&R Block introduced an Instant Money Advance Loan that it says is less expensive than Jackson Hewitt's product. Last week, Mark Ernst, H&R Block's chief executive, chairman, and president, said he expects to gain one to three million customers this tax season with a co-branded MasterCard called "Emerald Card." Customers can get their advance loan in debit card form using the Emerald Card.

Jackson Hewitt, which has sponsored the National Association for Stock Car Racing and featured Tarzan in an earlier ad, spends heavily on marketing. It requires franchisees, which run about 90% of its 6,000 stores, to contribute 6% of revenues (in addition to a 15% royalty cut) to the advertising effort.

In the fiscal year that ended April 30, Jackson Hewitt spent $41 million, or nearly one-quarter of its total expenses and almost 15% of its revenues, on marketing and advertising.


Comings and Goings

LoanCity, a national wholesale lender in San Jose, said Wednesday that it has named John C. Giagiari Jr. its chief operating officer and Jeff Minch its national sales manager.Mr. Giagiari was the director of subprime lending at the defunct Meritage Mortgage, which NetBank Inc. unsuccessfully tried to sell last year. (Late last year the Alpharetta, Ga., banking company agreed to transfer Meritage's salespeople and other employees to Lime Financial Services of Lake Oswego, Ore.)

Before joining Meritage, Mr. Giagiari ran wholesale lending in northern California for First Franklin Financial Corp. (which National City Corp. recently sold to Merrill Lynch & Co.)

Mr. Minch was named the national sales manager at Meritage in 2004 and held strategy and operational posts at First Franklin. In 1998 he founded OneHarbor, a financial planning service that National City bought in 2001.

Kenneth Duberstein, a Republican lobbyist who was President Reagan's chief of staff in 1988 and 1989, is to leave the board of Fannie Mae on Feb. 15, the government-sponsored enterprise said.

In a filing to the Securities and Exchange Commission on Friday, Fannie said Mr. Duberstein had agreed to stay on the board until the company completed its restatement of results through mid-2004, which was filed last month.



"A couple of subprime companies you saw exit the business in the last few weeks saw their equity completely exhausted when required to [buy] back loans from Wall Street that didn't perform to their expectations. You may very well see other firms that will happen to."— Doug Duncan, the Mortgage Bankers Association's chief economist, on a conference call Monday.

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