Momentum builds during Weyerhaeuser Mortgage Co.'s transition to new owners

Business Wire, April 14, 1997

WOODLAND HILLS, Calif.--(BUSINESS WIRE)--April 14, 1997--

--Monthly sales records set; unit will be renamed WMC Mortgage--

The sale of Weyerhaeuser Mortgage Co. to WMC Acquisition Co., a joint venture of Apollo Advisors L.P. and Spring Mountain Escrow Inc., is slated to close April 30.

The closing will mark the start of a new era for one of the nation's largest mortgage lenders, which is being renamed WMC Mortgage.

Apollo Advisors is a group of investment partners who control a portfolio in excess of $5 billion and own such companies as Ralph's Supermarkets, Samsonite, Culligan, Converse and Florsheim. Spring Mountain Escrow is California's largest independent escrow company.

Scott McAfee, president and CEO of The Spring Mountain Group (which includes Spring Mountain Escrow), regards WMC Mortgage as a "great company with an established franchise that has the ability to dominate its niche markets."

"Anticipation among our employees and customers has been steadily building since the sale was announced in February," said Tom Grainger, a Weyerhaeuser Mortgage Co. executive responsible for spearheading the transition. "We definitely have momentum going into the sale," said Grainger, noting that the company has continued to post new monthly sales records.

"As we've moved through the transition phase, our employees and customers have discovered that there's going to be an improvement which will be additive to both," said Grainger. "The new owners bring valuable skills, contacts, new products and investors, as well as a concept of integrating a number of services within one company and one sales force."

Through WMC Acquisition Co., Grainger said the company now has a premier escrow company, adding to its established mortgage and insurance services.

Grainger added that the new mortgage products already brought on stream by WMC Acquisition Co., even prior to the conclusion of the sale, clearly demonstrate the new owners' level of commitment to the business.

"Bundling real estate closing services will enable us to establish new relationships and opportunities for the mortgage company," said John Flynn, president of Weyerhaeuser Insurance Services. He believes that "one source" closing will make the process much more convenient and time-saving for builders and their home-buying customers.

"The seamless delivery of closing services will 'shave several days and hundreds of dollars in interest' from the closing process. And, since WMC will control all the closing services, 'surprises' for builders can be eliminated," said Flynn.

WMC Mortgage should be able to capitalize on the potential in both the "A" and "sub-prime" markets, said McAfee, emphasizing that the challenge is to successfully meld asset-based and value-based products together. He said that there are tremendous opportunities to help highly qualified homeowners who have been unable to move up because of declining home values or equity. "We'll introduce creative new products to capture this key market segment."

Equity Services, the sub-prime division of the company, has continued to boom through the transition period, setting new records every month. The division will continue to expand and is planning a geographic expansion by opening more satellite offices around the United States within six months.

Already among the nation's top five providers of sub-prime financing, and the third fastest growing subprime lender in the United States in 1996 at nearly $500 million in fundings, Equity Services expects to double its volume this year, said the division's president, Stephen M. Wright.

Through WMC Acquisition Co., Wright said Equity Services will become involved in securitization -- the bundling and sale of loans to the investment community. "Securitization will enable us to provide better service and rates for customers and generate considerable additional income," said Wright.

The prime credit mortgage business will continue to be an integral part of the WMC Mortgage product line for realtors and builders, stated Grainger. "This segment of the business is growing and setting new records for applications every week. In fact, application levels are as high right now as they were during the refinancing bonanza in 1993."

Grainger said WMC Mortgage was profitable in 1996 even though it made significant investments in both people and offices, and the recently completed restructuring of its consumer business is just one of the steps being taken to enhance continuing profitability.

Even though the company's name and ownership is changing, Grainger said its focus remains the same: to find a loan for every consumer.

WMC Mortgage offers a broad variety of residential loan programs designed to satisfy a wide range of consumer needs, and Grainger expects the additional resources of the new owners to enable the company to expand its product line even more.

With loan originations in 1996 exceeding $3 billion, WMC Mortgage is one of the nation's 50 largest single-family home loan lenders overall. The company has served the needs of builders, borrowers, realtors and mortgage brokers for 44 years, and it has 1,500 employees in more than 60 branch offices nationwide.