Acquired Mortgage Companies Increase as Failures Decline

Mortgage-related company failures have fallen as the number of acquisitions has grown, according to data tracked at http://www.mortgagegraveyard.com/, a journal of failed, ailing and acquired lenders.

During the second quarter, 16 companies or operating units were shut down, according to the Mortgage Graveyard, which is maintained by http://www.mortgagedaily.com/. The number of failed companies was down one- third from the first quarter.

Among high-profile second-quarter closings were Wilmington Finance Inc., Washington Mutual Inc.'s broker unit and Chase Wholesale's subprime and home-equity businesses. In addition, Mortgages Ltd. filed for bankruptcy.

Approximately 3,800 jobs were impacted by second-quarter closings, down from around 5,800 during the first quarter.

'The rate of failures tumbled from the astonishing pace set in 2007,' MortgageDaily.com Publisher Sam Garcia said. 'What we're mostly seeing now is further wholesale lending consolidation.'

At the same time, the number of mortgage-related companies that were acquired rose 17 percent to 14 in the second quarter. High-profile deals included the acquisition of Option One Mortgage Corp.'s servicing business by an affiliate of W.L. Ross & Co. LLC and the purchase of Bear Stearns Residential Mortgage by an affiliate of Lone Star Funds.

Companies tracked generally included those that employed at least 50 people.

Year Failed Acquired
Companies Companies
2008 2nd quarter 16 14
2008 1st quarter (revised) 24 12
2008 year-to-date July 11 45 29
2007 full-year (revised) 150 43

By state, the number of failures fell the most in California and rose the most in Minnesota. At the same time, California saw more second-quarter acquisitions than any other state.

2008 Most Active States

State Q2 Q1 Q2 Q1
Failures Failures Acquisitions Acquisitions
California 0 5 3 1
Florida 1 3 0 0
Kentucky 0 0 0 2
Maryland 2 1 0 0
Minnesota 2 0 1 2
New York 2 1 0 0
Virginia 0 4 0 1
Wisconsin 0 2 1 0

The acquisition of Countywide Financial Corp. and failure of IndyMac Bancorp occurred in the third quarter.

A complete report of all failed companies is available at: http://www.mortgagedaily.com/MortgageGraveyard.asp?spcode=pr

About MortgageDaily.com

Founded in 1998, MortgageDaily.com is a dominant online news source for the mortgage industry. Around one million mortgage business news pages are viewed monthly at MortgageDaily.com and its affiliate publications.

CONTACT:
Sam Garcia
mtgsam@aol.com
214.521.1300
3811-700 Turtle Creek Blvd.
Dallas, TX 75219

Source: MortgageDaily.com

CONTACT: Sam Garcia of MortgageDaily.com, +1-214-521-1300,
mtgsam@aol.com