Barclays Bank PLC announced this morning that it has entered into an agreement to purchase EquiFirst Corporation, the non-prime mortgage origination business of Regions Financial Corporation, for approximately $225 million in cash. EquiFirst is the nation's 12th largest non-prime wholesale mortgage originator, and originates its loans through over 9,000 brokers in 47 states. The company represents Barclays second recent acquisition in mortgage banking. The bank also purchased HomEq's servicing platform from Wachovia for $469 million back in November 2006. Barclays said it will combine the lending operations of EquiFirst with its mortgage servicing and capital markets capabilities to create a vertically-integrated mortgage franchise.
Barclays Capital currently has an active wholesale loan mortgage business in the US which involves the purchase and securitization of mortgages on a principal basis. Company officials said that all the loans originated by EquiFirst are expected to be securitized or sold on an ongoing basis after an average hold period of approximately 2 to 3 months. Completion of the acquisition is expected in the first half of 2007.