Citi acquires ACC Capital wholesale unit |
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Fri, 31 Aug 2007 22:22
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NEW YORK (AP) - Citigroup Inc., the nation's largest financial institution, on Friday agreed to buy the wholesale mortgage origination and servicing assets from ACC Capital Holdings.The acquisition of AMC Mortgage Services -- which includes servicing rights for $45 billion worth of loans -- is expected to close Sept. 1. Terms of the deal were not disclosed.Citigroup's markets and banking division had already agreed to provide working capital to ACC Capital, which operates Ameriquest Mortgage. As part of that capital infusion, Citi had an option to acquire the assets and become the company's primary warehouse lender.'Exercising our option to acquire the assets from ACH's wholesale origination and servicing business allows Citi to secure valuable and scalable platforms in a market undergoing significant change,' said Jeffrey Perlowitz, head of global securitized markets in Citi's fixed income, in a statement.Orange, Calif.-based ACC Capital has been caught by a wave of delinquencies and defaults that have swept through the subprime mortgage market. Last year, the company shuttered its Ameriquest mortgage branch offices in a plan to consolidate its operations into call centers.In 2007, ACC Capital signed a pact with Citigroup to obtain working capital and access to credit. As part of that deal, Citi had the option to purchase the AMC Mortgage Services business -- as well as Argent Mortgage.Citigroup shares rose 65 cents to close at $46.88.Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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