Two mortgage banking firms with multibillion-dollar loan servicing portfolios appear to be seeking buyers.
Privately held Medallion Mortgage Co. a San Jose, Calif.-based mortgage bank with a $5 billion servicing portfolio, is said to be marketing itself, according to two sources.
Another source characterized the situation as fluid, with a sale not the only possibility.
And Leader Mortgage Co., Cleveland, has been on the block for about two months, according to company president James L. Hook, but has found interest lukewarm.
The marketing of the two companies illustrates the continuing stream of mortgage banking assets coming onto the market. The response to the Leader offering also shows that the prices being offered seem to have dropped.
Medallion has enjoyed rapid growth in recent years, increasing its servicing portfolio by more than 300% since June 1992. However, one source said that the company, like many others in the industry, has been hit by this year's decline in originations.
Walter E. Muir, Medallion's president, could not be reached. Asked about reports that the company is for sale, Peter G. Hills, the chief financial officer replied, "I don't know anything about that." He added, however, that "there have been a lot of rumors going around."
Leader Mortgage got a number of bids, according to Mr. Hooks, but "they were basically to buy the servicing and shut the place down."
Since the objective of the sale was to keep the company as a going concern, he now believes that if no workable offers are received "in a month's time." the process will be ended. "In all candor, it doesn't appear that there will be a sale," said Mr. Hooks.
Indeed, the company was attracted to the idea of a sale at least in part by some of the handsome prices that mortgage assets were fetching earlier this year, he said.
"We thought that maybe we would be a natural fit for a bank that needed a mortgage company."
About half of Leader's stock is owned by the company's chairman, Alvin A. Siegal, and the remainder by an employee stock ownership plan.