Washington Mutual Inc. announced late Tuesday that it has agreed to purchase the operating assets of HomeSide Lending Inc., the U.S. mortgage unit of National Australia Bank Ltd.
In the deal, Washington Mutual will acquire $1.9 billion in HomeSide's assets, including $1.8 billion in prime residential mortgage loans, servicing technology, and the Jacksonville, Fla., lender's wholesale, correspondent, and consumer direct origination channels. The deal also includes servicing sites in Jacksonville and San Antonio, Texas.
NAB will retain HomeSide's servicing portfolio, but Wamu has agreed to subservice the loans, which total $187.4 billion, representing 2 million customers. Though the exact terms of the deal were not disclosed, Washington Mutual said it will pay a $25 million premium over the agreed value of the acquired assets.
The deal could end a painful chapter for both HomeSide and NAB, which bought the U.S. mortgage company over three years ago for $1.23 billion. In two incidents this year, NAB wrote down over $2 billion in HomeSide's assets, for about $400 million in July and then or a whopping $1.75 billion in early September. Three of HomeSide's top executives resigned in the wake of the write downs. Since that time NAB has been exploring a sale of HomeSide, several sources said.
The deal is expected to close during the first quarter of next year, a spokesman said. Morgan Stanley and Heller Ehrman White & McAuliffe LLP represented Washington Mutual. The National Australia Bank was represented by Cohane Rafferty, Merrill Lynch and Sullivan & Cromwell.
