Weyerhaeuser Mortgage Co. says its parent hopes to sell it to someone who will keep the unit operating, not just take the servicing portfolio and close down the origination effort. But a consultant says such a sale would be difficult to pull off.
For their part, officials at the mortgage banking subsidiary of paper and forest products giant Weyerhaeuser Co. are eager to dispel rumors that the unit has already been sold.
"We run into builders and Realtors, and they say, 'What are you doing here? We thought you guys were gone,'" said Patti Jucha, Weyerhaeuser Mortgage's vice president and director of marketing.
The Woodland Hills, Calif.-based company even issued a press release last week to allay customers' fears and dispel any rumors about its demise. Ms. Jucha said the rumors were so rampant that the company had to take action.
Still, Weyerhaeuser Mortgage is not denying it may be sold, and its Tacoma, Wash.-based parent company has toyed with the idea on and off for the last several years. Last month, Weyerhaeuser announced that it had hired Goldman, Sachs & Co. to explore buyer interest in the unit.
Christine Clifford, vice president of Wholesale Access, a Columbia, Md.- based research and consulting firm, said potential purchasers would be more interested in Weyerhaeuser Mortgage's servicing portfolio than its origination capabilities.
"The value is in the loans they have, not the people," Ms. Clifford said.
Weyerhaeuser Mortgage had a $4.4 billion servicing portfolio as of June 30 and originated $1.7 billion in mortgage loans in the first half . The company has sold about $5 billion in servicing so far this year.
Ms. Clifford said a mortgage company on the East Coast seeking to bolster its West Coast business could keep Weyerhaeuser Mortgage's operations running. But she noted that a company of its size is usually broken up following a takeover.
But Ms. Jucha insisted that "the intent is to sell the company as an entity that doesn't get pulled apart. Weyerhaeuser Co. has made that commitment to the mortgage company."
She added that the unit would benefit from being sold to a financial services company because there would be more synergies; mortgage lending and forest products are not related businesses, she noted.
Ms. Clifford said the mortgage company's press release could be a sign that Weyerhaeuser Co. is looking for more bidders to drive up the unit's price.
Weyerhaeuser Co. is just starting to accept bids, Ms. Jucha said. A spokeswoman at the parent company said a decision to sell the mortgage unit will be made once the bids have been evaluated.
Still, Ms. Jucha noted, Weyerhaeuser Mortgage is in the midst of restructuring its wholesale business and will open a new operations center in Memphis soon.