View more on these topics

US braces for a correction

Dutch bank ABN Amro Holding NV is contemplating selling its once celebrated US mortgage division.

A spokesman for ABN Amro Mortgage – the nation’s largest wholesale lender a few years ago – declined to discuss the matter, citing a company policy not to comment on “rumours and speculation.” (Wholesale lenders originate loans through independent brokers).

If ABN Amro Mortgage is indeed up for sale it would not be alone. With residential production volumes waning and home sales down dramatically in the US, the industry is bracing itself for a correction that could result in several hundred lenders leaving the business, either through mergers and acquisitions or failure.

Last week, H&R Block, a tax preparation company, revealed it might sell California-based Option One Mortgage, the sixth largest sub-prime lender in the US.

And in another deal, New York Mortgage Trust, has hired Miami-based Milestone Advisors as an adviser and is engaged in merger talks with an undisclosed buyer.

Among residential funders, NYMT ranks 70th in the US.

ABN Amro Mortgage ranks 17th among residential originators and eighth among servicers.

At the end of June it had $219bn in servicing rights (receivables) on its books.

In 2002 it funded $90bn through the wholesale channel, ranking first in the industry. Over the past two years its wholesale volume has fallen dramatically.

It also has relied heavily on conventional product, which has lost significant market share to non-traditional loans such as alt-A, payment option adjustable rate mortgages and interest-only mortgages.

Even though ABN’s wholesale unit (which is called InterFirst) is a shadow of its former self, one adviser noted that the company has been aggressively bidding on bulk servicing portfolios (mortgage receivables) the past few months, an activity that might seem strange for a company exiting the business.

As reported, the Dutch bank is in the throes of restructuring its operations and recently unveiled mixed Q3 results. However, its North America division reported an 8% increase in profits, helped in part by higher mortgage revenues.

A few years ago rumours surfaced that ABN Amro Mortgage was for sale but nothing ever came of it.


RICS comments on BBA mortgage figures

Milan Khatri, chief economist at the Royal Institution of Chartered Surveyors welcomes the findings by the British Banker’s Association into the housing market.He says: “The British Bankers’ Association figures show that underlying mortgage activity remains strong with few indications that higher interest rates are biting. These figures confirm reports from RICS members that housing demand […]

Keep up with European developments

Attention is turning to the European dimension of mortgage regulation and the FSA has unveiled a new section on its website dedicated to this subject, says Bill Warren

Skipton relaunches fixed rates

Skipton has relaunched its range of two-year, three-year, five-year, seven-year and 10 year fixed rate mortgages.On this product, borrowers could make initial monthly payments of only £592 on a £100,000 repayment mortgage. Colin Dale, head of lending at Skipton, says: “No matter what the Bank of England’s base rate is doing, the majority of borrowers […]

RICS calls for online energy service

The Royal Institution of Chartered Surveyors is calling on the government to launch a web service that will enable home owners to be more energy efficient.During last week’s Select Committee’s meeting on climate change, RICS approached the government about creating a service for consumers that will provide recommendations on energy efficiency.RICS is also calling for […]

Health - thumbnail

Fit for Work: guidance for employers published

On Friday, the Department for Work and Pensions published its guidance for employers on using the new Fit for Work (FfW) service to help ill employees return to the workplace. It also includes more details on the tax exemption for medical interventions that commenced on 1 January 2015.


News and expert analysis straight to your inbox

Sign up