O.C. Mortgage Company Will Be Acquired

Leading home-equity lender Aames Financial Corp. said Monday it will acquire One Stop Mortgage Inc., a rapidly growing Costa Mesa firm specializing in riskier mortgages, in a deal worth about $129 million.

One Stop will become a subsidiary of Los Angeles-based Aames as part of the transaction, another sign of continuing consolidation in the “nonbank” lending industry.

A major player in the growing field of lending to borrowers with blemished credit ratings, Aames has 600 employees and operates 48 loan offices in 16 states.

Privately held One Stop, which was founded last year by Neil Kornswiet and his wife, Debra, specializes in originating or acquiring from real estate brokers those home equity loans given to riskier customers. It has about 250 employees in 25 offices.

“Acquiring One Stop gives us dramatic entry into a sector of the market that so far Aames has not been involved with--this business of purchasing loans from small and mid-sized brokers,” said Gary K. Judis, Aames’ chairman and chief executive officer.

There won’t be any layoffs, said Judis, who predicted that One Stop would grow and continue to hire. One Stop will remain in Orange County, he said.

Neil Kornswiet, 39, will remain president and chief executive officer of One Stop, and will become a member of the Aames board of directors. Debra Kornswiet will remain a director of One Stop.

“This is a wonderful fit,” Kornswiet said. “Aames will be able to increase its market penetration by purchasing and originating loans from small brokers throughout the United States--something One Stop does well.”

Aames will acquire One Stop for about 2.3 million shares in the tax-free transaction. Aames said One Stop shareholders and employees will receive a combination of about 1.65 million common shares and options for an additional 375,300 common shares.

In addition, Aames said it will issue about 675,000 shares to Lehman Brothers, which owns an 25% interest in One Stop.

The deal was announced after the market closed. Aames had closed Monday at $47.75 a share, down 25 cents, in trading on the New York Stock Exchange.

One Stop’s loan originations during the three months ending in July totaled approximately $126 million. Aames reported about $300 million of loan originations for the same time.

The deal is expected to close next month.