Magazine article Mortgage Banking

WAMU Purchases Homeside Lending. (Business Alert)

Magazine article Mortgage Banking

WAMU Purchases Homeside Lending. (Business Alert)

Article excerpt

WASHINGTON MUTUAL INC., SEATTLE, signed a definitive agreement to acquire the stock of the parent company of HomeSide Lending Inc., the U.S. mortgage unit of the National Australia Bank Limited, for an estimated $1.3 billion in cash. Washington Mutual will also assume $735 million of HomeSide's outstanding medium-term notes and certain other liabilities as part of the transaction.

The transaction is expected to be completed early in the fourth quarter of 2002, subject to customary closing conditions. It includes HomeSide's 1.4 million customer relationships nationwide; its mortgage servicing portfolio, projected to be approximately $131 billion at closing; and related hedges and other assets and liabilities. The transaction is expected to be modestly accretive to Washington Mutual's earnings per share in 2002.

Based on current interest rates, the purchase price attributable to the acquired mortgage servicing rights (MSRs) is estimated to be $1.3 billion at closing. The ultimate MSR purchase price will be based on interest rates at the time of closing. Washington Mutual expects to sell most of the excess servicing acquired in the transaction, which will reduce its financial exposure while maintaining customer relationships. …

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