Some Firms Saved by Mergers
Mergers have picked up steam as several mortgage companies -- including a real estate investment trust -- teeter on the brink of insolvency. Some of the mergers are forcing changes at the top of the executive ranks. Meanwhile, losses continue to pound financial firms -- forcing regulator actions at some.
Dick Kovacevich will stay on as chairman of Wells Fargo & Co. even though he has reached the company's mandatory retirement age of 65, a recent statement said.
The interim move was made at the request of Chief Executive Officer John Stumpf to ease the integration of Wachovia Corp. when Wells acquires it next month.
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Volatile Banking Sector Reshapes
As capital continued to be wiped out and dozens of small banks were hit with regulatory orders, some financial institutions have been approved to participate in the government's capital purchase plan. One mortgage company is shedding its real estate investment trust status, another is shutting down its commercial operations and a third will be acquired by a bank.
Banks Face Mergers, Regulatory Orders
A new real estate investment trust is being launched, an order was issued against a bank officer accused of mortgage fraud and Fannie Mae and Freddie Mac faced grand jury subpoenas and securities regulatory inquiries. Meanwhile, dozens of other banks faced a host of regulatory orders and a growing number of institutions face mergers.
Struggling to Survive
More financial institutions revealed their exposure to investments in the government sponsored enterprises -- with two warning that their capital standing would be impaired. The collapse in value of some Fannie Mae securities have prompted a class action against several investment bankers tied to the offering. Impac Mortgage Holdings reported a significantly lower first-half loss.
More Thornburg Warnings
Thornburg Mortgage Inc. paints a bleak picture of the current state of the mortgage market and its own ability to continue as a going concern. The jumbo lender has stopped originating new business, faced massive downgrades on its mortgage-backed securities and been hit with ongoing margin calls.
Losses, Lawsuits and Solvency
With earnings season in full force, losses continued to mount, more lawsuits were filed and executive appointments were announced. Meanwhile, other firms are acquiring or investing in mortgage-related companies as solvency is becoming a growing issue. A REIT has expanded its servicing capabilities with a recent asset acquisition.
GSEs Overshadow Mortgage Sector
As the mortgage sector grapples with stormy financial markets, all eyes are on Fannie Mae and Freddie Mac -- which saw their shares traded at their lowest levels in more than 15 years. Meanwhile, two real estate investment trusts disclosed financial information.
REIT & Exec Shakeups
Two mortgage real estate investment trusts are teetering in the brink of insolvency, the president of a nonprime lender has been ousted and IndyMac is facing its fifth investor lawsuit since last month. But another REIT is optimistic after restructuring a repurchase agreement, while a servicing operation has successfully traded hands.
Acquisition, Collapse & Regulatory Actions
A California credit union collapsed and an Ohio bank expanded its mortgage operations with the acquisition of another bank. Dozens of other financial institutions are dealing with a host of legal and regulatory actions, while a hard-money wholesale lender is streamlining operations with the help of a third party. Three real estate invstement trusts also made announcements.
