Portland, Oregon-based Wilshire Financial Services Group Inc., a company specializing in mortgage banking, loan portfolio acquisition and servicing, announced last week that it has emerged from bankruptcy pursuant to a restructuring plan approved in April by the U.S. Bankruptcy Court for the District of Delaware.
Contributing to the company's rehabilitation is its continuing purchase and securitization of both residential and commercial mortgages.
First Bank of Beverly Hills F.S.B., the company's thrift subsidiary, has purchased approximately $100 million of residential and commercial mortgages since Jan. 1. The bank also originates commercial mortgages through its subsidiary, George Elkins Mortgage Co., a four-branch commercial mortgage loan originator headquartered in Southern California.
"We anticipate that this will be a consistent securitization," said Lawrence A. Mendelsohn, president of Wilshire Financial Services. While the timing of the issuances are not set in stone, Mendelsohn mentioned that "it would not be unrealistic if we issued on approximately a quarterly basis."
Mendelsohn also noted that the company's plan to purchase mortgages is "more of a function of the type of financing we need to do," and not just a way to make money from securitizations.
The primary focus of the company's restructuring plan was the successful exchange of its outstanding senior notes, totaling approximately $184 million, into common stock of the restructured company.
The company's subsidiaries are expected to continue their normal course of business throughout the restructuring, and have made payments to their trade creditors and lenders (other than holders of the senior notes).
During the last four years preceding the company's bankruptcy, Wilshire purchased residential mortgages and manufactured housing mortgages in the range of $30 million to $400 million.
According to Mendelsohn, the company will be purchasing and securitizing mortgages of "probably not less than $100 million" in the near future, and is currently working on various CMBS deals that will come through by the year's end.