Community Savings to Sell Realty Units: Maryland S&L Will Divest Subsidiaries to Qualify for Federal Deposit Insurance
LeGesse, David, American Banker
NEW YORK -- Community Savings & Loan Association, one of Maryland's privately insured thrifts, said Wednesday that it is selling its Epic real estate companies to meet a regulatory condition for federal deposit insurance.
But there is "no truth" to rumors that either Community or Epic is facing financial trouble, said James Deerin, Community's senior vice president and general counsel.
Rumors had spread among Wall Street traders that a Maryland-based thrift would default on a major deal in mortgage securities. "We also had been hearing rumors here for a couple of days that we were in trouble," said Mr. Deerin.
He said the source probably traces back to Community's efforts to sell its Epic group, which specializes in mortgage banking and the syndication of single-family homes. Epic, based in Church Falls, Va., actually started syndicating homes about eight years before acquiring Community, a Bethesda-based thrift, in 1982, Mr. Deerin said. A 1983 reorganization placed the Epic companies as subsidiaries of the thrift.
Now the Federal Home Loan Bank Board has informed Community that "institutions with significant real estate syndication operations will not be readily accepted into the federal depository system," Mr. Deerin said.
That word came last week during the final examination of Community by the Federal Savings and Loan Insurance Corp. …