Shearson Is Said to Wind Down Attempt to Sell Mortgage Unit
Shearson Lehman Brothers Inc. may soon throw in the towel on efforts to sell its large mortgage company.
The Wall Street firm held preliminary discussions in the spring with several potential buyers, including BankAmerica Corp. and the mortgage unit of General Electric Capital Corp. wants and is no longer in active discussions with those companies. One unidentified buyer is still in the picture, but chances of a deal are considered slim, well-placed sources said.
Nation's Ninth-Largest Servicer
A Shearson spokesman declined to comment.
Shearson Lehman Mortgage Co., Irvine, Calif., services about $18 billion of mortgages, funneling monthly payments from homeowners to holders of mortgage-backed securities. It is the nation's ninth-largest mortgage servicing company.
Suspension of the sale effort underscores the difficulties of marketing large mortgage banking companies while the Resolution Trust Corp. has a heavy supply of companies for sale.
Declining interest rates also are a concern to potential buyers because borrowers are making early repayments of the mortgages that are serviced.
The Shearson unit would have been one of the largest mortgage companies ever to change hands.
Shearson Lehman Brothers, which has considered selling the unit at least once previously, is trying to bolster its capital position through asset sales.
Security Pacific Deal Cooled BankAmerica Interest
BankAmerica apparently dropped out of the bidding after it agreed last summer to buy Security Pacific Corp.
GE Capital, which owns a large servicing facility in St. Louis, was said to be studying the Shearson unit thoroughly as recently as August. A GE spokesman could not be reached for comment this week.