IndyMac to Acquire New York Mortgage Retail Platform; Wholesale Platform Up for Grabs
New York Mortgage Trust, Inc. said Wednesday that it has entered into an agreement to sell its retail mortgage banking platform, The New York Mortgage Company, LLC, to IndyMac Bank in a deal worth approximately $13.4 million. The REIT also said it intends to sell its wholesale mortgage business under a separate agreement to another buyer, but did not provide details. At press time, it was unclear if the company's wholesale business had already been sold or if the company was actively seeking an investor. The sale of NYMT's core assets was driven by what the company called "significant challenges" in the mortgage industry. As a part of this transaction, IndyMac, the second largest independent mortgage lender and seventh largest savings and loan in the nation, will be acquiring 21 full service and 11 satellite retail mortgage banking offices located in 11 states, including all branch employees and loan officers, as well as the majority of employees at NYMC's corporate headquarters, and NYMC's pipeline of mortgage applications in process at the time of closing. This will represent IndyMac's largest growth initiative in traditional retail mortgage banking to date. IndyMac will purchase substantially all of the operating assets related to NYMC's retail mortgage banking platform, including use of The New York Mortgage Company name, and assume certain liabilities of NYMC's retail platform, including certain lease liabilities and obligations under the pipeline of loan applications. Indymac will hire a majority of NYMC employees and assume a portion of the retention and severance expenses associated with the transaction. New York Mortgage said the transaction is expected to close by March 31, 2007. "Due to the persistence of the significant challenges facing the mortgage industry, our Board of Directors has been engaged over the past several months in confidential preliminary discussions with several companies, a number of which expressed interest in acquiring some or all of our organization," said Steven Schnall, chairman and president of NYMT. "After an extensive review of our strategic and financial alternatives, it was determined that the sale of our retail and wholesale lending businesses is in the best interest of our stockholders," he said. Upon closing, Schnall will resign his executive positions with NYMT and NYMC, and will be appointed executive vice president of IndyMac Bank and CEO of The New York Mortgage Company, a division of IndyMac. Following the sale, NYMC said it will retain and liquidate its inventory of loans held for sale in the ordinary course of business. NYMT's Board of Directors, together with its management, will continue to consider strategic options for the parent REIT, including a possible sale or merger of NYMT or raising capital under a passive REIT business model. For more information, visit http://www.indymacbank.com.