Friedman, Billings, Ramsey Group Inc., Arlington, Va., has agreed to acquire nonprime lender First NLC Financial Services, Deerfield Beach, Fla., in a deal valued at $88 million.FBR will pay for First NLC through both cash and stock. First NLC was reacquired by company management in 1999 in conjunction with Sun Capital Partners, Boca Raton, Fla., from IMC Mortgage Co., then of Tampa, Fla. First NLC will become part of FBR's principal investment group, but operate as a wholly owned subsidiary with its current management in charge. FBR is looking to expand the type of mortgage assets it holds in its real estate investment trust portfolio, and plans to portfolio a significant portion of First NLC's production. FBR says it expects average return on equity from nonprime mortgages of 25%-30% over the life of the asset, and thus it intends to allocate between one quarter and one half of its REIT portfolio to these loans in the short term.

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