American Home Mortgage Servicing Inc., the Coppell, Texas-based firm bought by Wilbur L. Ross Jr. in 2008, soon will be starting a correspondent mortgage origination operation, industry sources said.
Furthermore, AHMSI is not the only player looking to move into this space as a number of Wall Street firms are also looking to start correspondent production channels, one source indicated.
AHMSI is the latest iteration of the now-defunct nonconforming lender American Home Mortgage, Melville, N.Y. Ross purchased the servicing business out of the bankruptcy estate. Later, AHMSI bought the Option One servicing portfolio.
While details were not available regarding the start of the correspondent business, sources did state that the company is moving ahead in a big way.
It would make business sense for AHMSI to get into the production side of the mortgage industry as the servicing it acquired ages and runs off and thus needs to be replaced.
A possible sign that the company was looking to get into originations was the person it hired last November to run AHMSI.
David M. Applegate became president and chief executive of AHMSI, replacing David M. Friedman. Applegate's experience includes a stint as president of GMAC Mortgage and chairman of GMAC Bank from 2000 to 2007, according to an AHMSI press release. He was also co-CEO of Residential Capital Corp., the organization that General Motors folded GMAC Mortgage and Residential Funding Corp. into.
The AHMSI release pointed out that the mortgage unit's origination market share tripled when he was running the company, peaking at $100 billion, while its servicing portfolio nearly doubled to $300 billion.
In the release Applegate is quoted as saying part of his function would be "diversifying and continuing to grow our business."
Ross said in that same release, "Dave's depth and breadth of experience in the mortgage and banking industries and his commitment to customers are major assets that will further strengthen the management team after a period of strong growth in AHMSI's business."
Applegate also served as president of Radian Guaranty Inc. and immediately prior to joining AHMSI, had a consulting business.
