Rumor Mill Has Washington Mutual Talking to Suitors

Is Washington Mutual, Seattle, the nation's largest thrift - and third-largest mortgage servicer - on the auction block?

Last week the company declined to comment, but investment banking officials told this newspaper that rumors were once again circulating that WaMu was talking to the London-based HSBC Holdings which already has substantial mortgage assets in the U.S. WaMu serviced $772 billion of mortgages at the end of last year.

A spokeswoman for HSBC said the company has a policy of not commenting on rumors and speculation. (WaMu's spokeswoman said the same thing.)

It is not known how solid these latest rumors are, but WaMu's share price has traded near its 52-week high in recent weeks.

A few years ago, HSBC bought Household International, Prospect Heights, Ill., one of the largest residential subprime lenders/servicers in the U.S. HSBC is a cash-rich company that would like to further increase its presence in the U.S. market.

In the fourth quarter, WaMu ranked third among all residential lenders, HSBC 19th. In the subprime niche, WaMu ranked fourth while HSBC/Household ranked 10th.

WaMu has a market cap of about $36 billion. Over the past year, Citigroup as well as European-based banks have been mentioned as possible suitors.

Meanwhile, in other merger news, Ampro Mortgage Corp., Dallas, is on the verge of being sold.

The company, which is owned by industry veteran William Starkey Sr., funded about $1.9 billion in loans last year. It has eight wholesale offices and is licensed to do business in 47 states and the District of Columbia.

The Stratmor Group is Ampro's investment banker.

Assurance Partners Bank, Carmel, Ind., a thrift, has completed its sale to Federal City Bancorp, Washington. FCB is controlled by former Fannie Mae executive Stuart McFarland.

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