Irvine mortgage lender ECC Capital Corp. on Wednesday said it $26 million sale to Bear Stearns Cos. has hit some snags.
The company said in early October it planned to sell its subprime loan business to Bear Stearns, expecting the deal to close by year end. The deal’s now set to close in early 2007.
“Certain required administrative matters have taken longer than anticipated to resolve,” said Shabi Asghar, ECC president and co-chief executive, in a statement.
Under the deal, ECC’s subprime business is set to become part of Bear Stearns Residential Mortgage Corp.
Investors, who are set to get a sizable dividend from the sale, likely see it as the best option amid a slowdown in mortgages.
ECC, which counted a recent market value of about $116 million, also said it expects to post an operating loss in the fourth quarter.
Subprime loans are made to borrowers with imperfect credit and have been the bulk of ECC’s business.
ECC Capital expects fourth-quarter loans to top $1.2 billion, which Bear Stearns is set to take on in the buy.
