Magazine article American Banker

Maryland S&L Admits Some Loans in Arrears

Magazine article American Banker

Maryland S&L Admits Some Loans in Arrears

Article excerpt

NEW YORK -- An offical at Community Savings & Loan Association, one of Maryland's privately insured thrifts, acknowledged Friday that one of its subsidiaries -- Epic Mortgage Corp. -- has had to report delinquencies on "a number" of mortgages that it services.

But he denied that the subsidiary is delinquent on payments for some $1 billion in mortgage-backed securities. The mortgages affected are part of the financing for limited partnership in Community's real estate syndication subsidiary.

"It's a serious situation, but everybody's, trying to blow it up into something bigger than it is," said Leonard Meltz, Community executive vice president.

Epic has more than $1 billion in outstanding loans that it services as part of the financing for the limited partnerships, he said. That fact apparently led to wire reports on Friday morning that said Community or Epic was delinquent on some $1 billion in mortgage-backed securities.

"But it is not across-the-board delinquencies," Mr. Meltz said.

He blamed the mortgage delinquencies on the ultimatum two weeks ago from regulators that Community sell the entire group of Epic real estate companies as a requirement to get federal deposit insurance. Community is one of the privately insured thrifts in Maryland that must qualify for federal insurance by the end of this year or face liquidation by the state, which took over the private insurance fund after it suffered depositor runs at several institutions in April.

The cash flow problems for Epic's limited partnerships present no apparent threat to Community itself, said William LeCompte, deputy director of the Maryland division of savings and loan associations. Mr. Meltz did say that Community was trying to emphasize that point in order to avoid a renewal of depositor jitters in Maryland.

Epic is involved in the purchase and syndication of single-family residences throughout the United States. …

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