Temporary End For Accredited?
With its proposed acquisition by Lone Star Fund V (U.S.) LP in doubt, Accredited Home Lenders Holding Co. here is undergoing a restructuring program that shuts down its U.S. mortgage originations operations for the time being.
The announcement came one day after Accredited agreed to trade $1 billion of loans under a 90-day purchase agreement with an unnamed investor at an advance rate comparable to the advance rates it receives from its warehouse lenders.
The initial settlement of an approximately $500 million pool occurred on Aug. 17. Accredited at its discretion can repurchase of all the traded loans through mid-November 2007 at a premium to the advance rate.
"If the market improves to a rational level, our intention is to repurchase these quality loans by mid-November and sell or securitize them," said Accredited chairman and chief executive James Konrath.
The company said the moves do not affect its Canadian mortgage originations business or its U.S. loan servicing platform. Accredited services $8.4 billion.
It still has $1.6 billion in warehouse lines for U.S. mortgage originations and C$150 million ($142.2 million) for Canadian originations.
Accredited said this restructuring, plus the $1 billion loan trade will allow it survive off of securitization cash flows, servicing income and other income until it can resume loan origination operations. (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com/