Annaly Capital launches mortgage origination subsidiary
Annaly Capital Management (NLY) today announced the formation of Shannon Funding, a subsidiary that intends to provide warehouse financing and other services to residential mortgage originators in the U.S. "Now more than ever, new mortgage origination activity is dominated by the handful of large money center banks with ready access to capital," said Michael Farrell, CEO of Annaly. "Small- and medium-sized mortgage companies with good credit cultures and successful track records are challenged to source warehouse funding in this environment. Shannon plans to provide funding to these smaller participants in order to help them generate well-underwritten mortgage product," he said. "As opportunities present themselves in the future, Shannon will expand its strategy and operations into additional markets." Bruce Watterson, former managing director at LPS Capital Markets, a division of Lender Processing Services (LPS), will lead Shannon, which will formally launch in the first quarter. Annaly is a Maryland-based real estate investment trust. Under tax provisions and REIT status, the majority of earning must be funneled into real estate investments. In July, the REIT marketed more than $1 billion in stock in order to invest in mortgage-backed securities and to repay corporate expenses related to expansion. Write to Jacob Gaffney.