Lennar Corp. late Wednesday purchased $3.05 billion of troubled loans from the Federal Deposit Insurance Corp. (FDIC) through a "structured transaction" deal.
By creating limited liability corporations, Lennar is splitting the ownership stake in the loans 40/60 with the government taking the latter share.
Overall, the Miami-based homebuilder is buying two pools of notes (5,500 mortgages) including distressed residential and commercial real estate assets. The packages were culled from 22 failed banks.
In total, Lennar is putting up just $243 million in cash to acquire its stake with the FDIC providing 0% non-recourse financing of $627 million. Lennar said its subsidiary, Rialto Capital Advisors, would handle "the day-to-day management and workout of the portfolios."
In other news on FDIC-related sales, BOK Financial has purchased $4.1 billion in residential servicing rights from the now defunct Charter Bank of Albuquerque and is open to purchasing even more receivables, said the bank's mortgage chief.
No purchase price was disclosed. Ben Cowan, president of BOK Mortgage, Tulsa, noted that prior to the FDIC seizing control of Charter Bank a few weeks ago, his company already had a 'purchase and sale' agreement inked.
"We had a deal in place and then the FDIC came in," Cowan said. Eventually, the FDIC, after reviewing the sale, let BOK proceed with the purchase. He noted that the portfolio consists of mostly Fannie Mae, Freddie Mac and Ginnie Mae servicing rights. "It's a great opportunity," he said. "It's very clean stuff."
He said the company is open to buying additional pools of servicing rights. In this package it bought the receivables only and will not take title to Charter Bank's servicing platform. Beale Bank of Texas bought most of the Albuquerque bank's assets.
The new rights portfolio boosts BOK Mortgage's total residential servicing balance to $11.5 billion, a gain of 46%. Mountain View Financial brokered the deal.