Lehman’s old mortgage lending business is back, and expanding its underwriting of mortgages once again.
Aurora Loan Services, now owned by Aurora Bank FSB, is hiring and will grow its lending despite its troubled past.
Bloomberg: Aurora, which ranked as the top Wall Street-owned lender with $98 billion of originations in 2004 and 2005, announced plans to end most lending in January 2008. During the bankruptcy, Lehman has been lending to Aurora Bank, as well as contributing assets to the unit and buying its loans, to avert a regulatory seizure and protect its stake.
Aurora ranked as the 14th-largest servicer as of June 30, handling billing and collections on about $93 billion of loans, according to industry newsletter Inside Mortgage Finance. Aurora has been granting new mortgages to its servicing customers, one of the people said.
This could actually be a good move. The company will be focusing on government-backed mortgages that are less risky than its past work, and due to a lack of sufficient competition in the space, could make a lot of money doing so.
“For the ones that are left, there’s opportunity,” Steve Jacobson, chief executive officer of Madison, Wisconsin-based Fairway Independent Mortgage Corp., said in an interview. His originations soared 67 per cent from a year earlier to $2.6 billion in the first nine months of 2009.
This is another example of how Lehman wasn’t “lost”. The people are still around, as is much of the infrastucture. Many complete business units remain intact, even if they aren’t under the same umbrella anymore. If they can be profitable, then they’ll be back in some form or another.