Lone Star units snag Bear Stearns mortgage company
By Al Yoon
NEW YORK, May 30 (Reuters) - A unit and an affiliate of private equity firm Lone Star Funds are buying assets from Bear Stearns's BSC.N mortgage company following the sale of the ill-fated investment bank, according to a Lone Star spokesman.
The purchase of "certain operating assets" of Bear Stearns Residential Mortgage Corp. by the Lone Star groups comes just seven months after the Dallas-based company completed a $296 million purchase of Accredited Home Lenders Holding Co., once a big originator of subprime home loans.
Bear Stearns, one of the top lenders of risky mortgages that also sold the loans to investors as asset-backed securities, is slated to be sold on Friday to JPMorgan Chase & Co. (JPM.N) for about $10 a share. The sale is the result of a rushed negotiation in March overseen by the Federal Reserve and the U.S. Treasury.
"A Lone Star Funds' subsidiary and a Lone Star Funds' affiliate have acquired certain operating assets and rights to certain operating assets of Bear Stearns Residential Mortgage Corp., respectively," Ed Trissel, a Lone Star spokesperson, said in an e-mailed statement. He declined further comment.
The Bear Stearns mortgage operation specialized in below-prime wholesale and correspondent lending, which includes originating mortgages through brokers and companies that fund loans on behalf of another lender. The business of making and securitizing such loans seized up last year as loose underwriting standards and falling home prices resulted in soaring delinquencies and a global credit crunch.
With fresh capital from Lone Star, Accredited resumed lending in November at a fraction of the pace it achieved during the housing boom.
Lone Star's purchase was first reported on Web site HousingWire.com on Friday.
