It has been a busy week for North American Mortgage Co.
On Wednesday, the company announced that its insurance subsidiary, North American Mortgage Insurance Services, plans to purchase most of the assets of Lomas Insurance Services.
A day earlier, the company confirmed that it would enter subprime lending - the so-called B and C market - making loans to people with subpar credit histories.
The moves are part of a strategy to become less dependent on its bread- and-butter business: originating and servicing lower-margin conforming loans.
Terrance G. Hodel, president and chief operating officer of North American Mortgage, said the acquisition of Lomas Insurance will help North American gain revenue, because the company can cross-sell its insurance products to homebuyers seeking mortgages.
He added that North American already has insurance offices in or adjacent to many of their mortgage branches.
"We need to get more income out of individual loans, since the margin on the loan itself is going down," Mr. Hodel said.
Lomas was part of Lomas Mortgage USA, the erstwhile mortgage banking giant that emerged from bankruptcy earlier this month. As part of its reorganization, the company - now called Nomas Corp. - said it was close to a deal for the sale of its insurance subsidiary.
The sale still must be approved by the Bankruptcy Court in Wilmington, Del.
Lomas Insurance sells personal insurance products and services more than 50,000 policies for more than 40,000 customers throughout the United States.
Mr. Hodel said the acquisition would more than double the number of policies North American already services for other insurance companies. But, he added, North American's growing insurance division is meant to complement, not replace, its mortgage operations.
"Insurance is not going to be our new push," he said. "We are still in the mortgage business."