Gleacher & Co. said it is closing its MBS and rates, and credit product businesses effective immediately. It will remain in the investment banking business.

In the same announcement, Gleacher said it is preliminary discussions with an unnamed party about a merger or acquisition.

In February, Gleacher sold its Clearpoint wholesale mortgage production business to Homeward Residential, a subsidiary of Ocwen Financial Corp.

The primary reason for the sale was that Clearpoint failed to get Fannie Mae, Freddie Mac and/or Ginnie Mae seller approvals negating the reasoning for Gleacher to have owned it in the first place, which was to generate mortgage-backed securities to sell to its investors.

Still, based on statements in its 4Q12 earnings release, it looked like Gleacher was going to remain in the MBS business.

The company noted continuing operations reported a loss of $11.5 million for the quarter. Restructuring impacted all areas of Gleacher in 2012.

At that time CEO sThomas Hughes said, “While the revenue decline in MBS and rates has been natural in the face of all of our restructuring efforts in that business, we are not satisfied with those results. However, we recruited outstanding talent in this business unit, we believe our ability to serve customers in this product segment is strong, and once we have fully integrated our Rangemark capabilities with sales and trading, our customer interface will be even more compelling. We are pleased with our performance in investment banking and credit products. Our real estate finance team now ranks No. 1 in M&A transactions executed for REITs, and our credit products business grew its market share throughout 2012.”

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