Troubled Beverly Hills Savings & Loan Sells Its Wholesale Mortgage Division

Beverly Hills Savings & Loan has sold about half of its mortgage banking operation to a Carson firm for an undisclosed price. The S&L; closed down the operation last week.

American City Mortgage Corp. said it acquired the wholesale mortgage division, which funded about $150 million in loans each year made by other mortgage companies.

The division operated out of the troubled S&L;’s headquarters in Mission Viejo.

American City hired three of the mortgage banking unit’s 40 employees and expects to hire three to six more S&L; employees who will work out of its headquarters. Other mortgage division employees have been laid off.

Patrick Theodora Jr., American City’s executive vice president, said the firm did not want the S&L;’s seven-office retail mortgage banking division, which made loans directly to borrowers.

Beverly Hills Savings, declared insolvent and seized by federal regulators in April, 1985, now has the largest deficit among the nation’s 400 insolvent thrifts. It had $582 million in red ink at the end of June, according to regulatory figures.

The S&L;, managed by a team that regulators hired temporarily from First Nationwide Savings, has been selling both good and bad assets to reduce its size. It could not find a buyer soon enough to avoid closing down its mortgage operation, which had started losing money in the last few months.

American City has been financing about $200 million in loans a year, mostly in direct loans to homeowners, Theodora said. With the purchase of Beverly Hills Savings’ wholesale operation, the company intends to double its efforts to sell loans through other mortgage firms, he said. He expects the combined operation to fund $500 million in loans a year.

Theodora said he still is negotiating with Beverly Hills Savings for other pieces of the S&L;’s business, but he would not disclose what operations he is seeking.