Franklin Credit Management Corporation today announced that its wholly-owned origination subsidiary, Tribeca Lending, has entered into a definitive agreement with The New York Mortgage Company, LLC to acquire its wholesale mortgage origination operation, which includes offers of employment to approximately 60 sales and processing personnel located in Bridgewater, New Jersey. The sale of its wholesale platform will complete the disposition of most of New York Mortgage's lending assets. The company had announced February 7 that it would sell its retail operations to IndyMac Bank for $13.4 million, citing "significant challenges" in the mortgage industry. "We are pleased to announce that Richard Payne, who is currently responsible for New York Mortgage Company's wholesale lending division, will become the new President of our Tribeca origination subsidiary," stated Gordon Jardin, CEO of Franklin Credit Management Corporation.
"The addition of New York Mortgage Company's experienced wholesale lending organization will enable us to build on our Liberty Loan origination model for borrowers with serious financial difficulties, as the Bridgewater team has extensive experience in all types of mortgage origination products. A doubling in the size of our experienced origination sales force will allow Tribeca to quickly and efficiently target a broader range of brokers and customers for our Liberty Loan production." "The addition of Dick Payne and his operations chief, Joseph Gorton, along with their quality processes and cohesive wholesale team, will allow us to further expand our Liberty lending business," commented Tom Axon, chairman of Franklin Credit Management Corporation. Tribeca will pay approximately $485,000 for the associated fixed assets and intellectual property and will assume the lease obligation for the Bridgewater office facility. In addition, Tribeca will take over NYMC's existing pipeline of Alt-A loans upon closing of the transaction. Thereafter, Tribeca will pay NYMC 50 basis points for each loan in the acquired pipeline that is subsequently closed by Tribeca, an amount that is estimated to total $150,000 to $200,000. Tribeca will not purchase any closed loans or other assets from NYMC, nor assume any liabilities other than the Bridgewater lease. "Dick Payne and his team will review and evaluate the potential for operating synergies upon completion of this transaction, and we believe our new scale can improve and expand Tribeca's Liberty loan production volumes and accelerate recurring revenue growth," commented Paul Colasono, Franklin'sCFO. "They will also review processes and procedures in order to eliminate any possible areas of overlap and boost operating efficiencies." The transaction is anticipated to close in about one week, Franklin Credit said. For more information, visit http://www.franklincredit.com.
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