Shake-Up at Accredited in Wake of Bear Res Acquisition
Lone Star Funds is shaking things up in its mortgage business after its acquisition of Bear Stearns Residential Mortgage Corporation late last week; Friday, the private equity group announced that Accredited Home Lenders, Inc. CEO Jim Moran had stepped down and would be replaced by former Bear Res CEO Jeff Walton. Moran had served as interim CEO since February of this year. Various sources close to the company suggested to Housing Wire that other key executives from Accredited's management exited this week as well, along with Moran; a Lone Star press representative did not immediately respond to a request for comment on Friday. "Jeff is a highly experienced and proven executive with the right qualities to lead Accredited during the current market environment as we move forward," said Len Allen, Lone Star Funds' senior managing director of U.S. operations. Incorrect rumors had been flying earlier in the week that Lone Star had shut down Accredited completely, fueled mostly by Internet message board posts by account executives who had received notice that they were being laid off. Lone Star spokesman Ed Trissel confirmed to key members of the press that Accredited had consolidated its operations centers, closing offices in Orange, California, Beaverton, Oregon, St. Petersburg, Florida, and Woodcliff Lake, New Jersey, according to a report at Reuters Thursday afternoon. In a statement, Trissel said that the company had decided to consolidate "in order to maintain Accredited's financial position in the marketplace and improve the company's long-term prospects by realizing efficiencies." Questions remain, however, as to Accredited's future, and Lone Star's plans to integrate across two platforms with similar operations. A memo sent by Bear Res to its employees announcing the sale to Lone Star last week noted that the private equity firm intended to set up a separate entity, LSF5 Mortgage Operations, LLC, which would "operate as an independent origination and servicing business for its own account." Lone Star indicated in the memo that it would only temporarily use Accredited's existing channels to fund and service mortgages, until the permits were complete for LSF5. The memo did not specify the future of Accredited per se, but Walton's quick ascension to the helm at Accredited has fueled speculation among industry insiders that the San Diego-based lender's days may be numbered. A source close to the former Bear Res told Housing Wire Friday that while predicting the demise of Accredited was "premature speculation," Lone Star executives "certainly" had a plan on how to best integrate the two mortgage businesses.