Magazine article American Banker

Record Mortgage Deal at Fannie Mae

Magazine article American Banker

Record Mortgage Deal at Fannie Mae

Article excerpt

NEW YORK -- Dade Savings & Loan Association of Miami, Fla., currently reorganizing under new ownership, recently sold its residential mortgage portfolio to the Federal National Mortgage Association.

Officials of Fannie Mae call the $794 million deal the largest cash transaction in the secondary mortgage market.

"At least we've never heard of a larger single cash transaction," said Rick Betchley, a Fannie Mae senior vice president. Some swap transactions, where a lender exchanges its loans for mortgage-backed securities, have exceeded $1 billion.

The Westport Co., a Connecticut-based real estate investment firm, last October bought Dade Savings and set out to restructure the thrift's operations.

"Their first major project was to almost completely liquidate our mortgage portfolio," said Joel Ware, Dade Savings vice chairman.

The thrift's new owners see great potential in Florida's growing housing markets, but more of the thrift's assets were tied up in 30-year, fixed-rate mortgages. The new owners sought to convert those loans into cash that can be lent again as adjustable-rate mortgages, he said.

For that process, the new owners imported Walter Blass and named him president of Dade Mortgage Corp., a subsidiary of Dade Savings. With an extensive background in mortgage finance, including a stint at Fannie Mae, Mr. Blass negotiated the sale with several bidders before settling on his former employer, Mr. …

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