BANKING : Plaza Mortgage Reports Drop in Loan Demand; Sale to Fleet Up for Vote
As if the sagging mortgage banking business weren’t enough to drag down Plaza Home Mortgage Corp., the savings and loan company also had to contend in January with the rains, Southern California’s slow economic recovery and Orange County’s bankruptcy, all of which stifled loan demand for the month.
The monthly numbers tell the story: Plaza funded $116 million in loans in January, down 79% from $561 million in the first month of last year. Its pipeline of loans in process totaled $436 million, a 55% decrease from $961 million a year earlier.
In addition, mortgage applications from borrowers through the Santa Ana company’s 42 loan offices in 13 states fell 64% to $296 million last month from $818 million a year earlier.
“Some other mortgage bankers faced similar percentage declines,” Plaza spokeswoman Pam Albo said.
For shareholders, though, Plaza’s performance might not matter much longer. They are scheduled to vote Tuesday on selling the company to Fleet National Bank in Providence, R.I., for a price that so far is estimated at $87.9 million, or $7.625 a share.
The sale price had been $120 million, but the company was forced to reduce it after posting a larger than expected third-quarter loss of $11.6 million, which increased its red ink for the first nine months to $21.5 million. The company hasn’t released its annual results yet.
