Compiled by Alisha Gomez
TOP STORIES
Orange-based ACC Capital Holdings Corp. is cutting more jobs. The parent of subprime lender Ameriquest Mortgage Co. didn’t disclose how many job cuts it was planning. Published reports put the number as high as half of the company’s 6,000 workers. ACC is consolidating Ameriquest call centers and its wholesale loan offices, which fund loans from independent brokers. ACC blamed a “very challenging” market for loans made to borrowers with imperfect credit. Last spring, ACC closed 229 branch offices and laid off 3,800 workers nationwide in a bid to streamline operations. Last month, ACC struck a financing deal with Citigroup that could lead to the acquisition of wholesale arm Argent Mortgage and AMC Mortgage Services, which services mortgages.
Shares of New Century Financial Corp. were booted from the New York Stock Exchange and now trade on Pink Sheets. The move is another sign of how far the subprime mortgage lender has fallen, trading a prestigious NYSE listing for a lowly place on Pink Sheets, where listed companies don’t need to file with the Securities and Exchange Commission or meet other requirements. Meanwhile, Maguire Properties Inc. said last week that the potential loss of New Century as a tenant would not be a major blow to the Los Angeles-based office landlord. Maguire is making contingency plans to re-lease space at its Park Place campus in Irvine at higher rates than the now troubled New Century is paying. In September, New Century is due to take 190,000 square feet of space at 3161 Michelson, the $240 million office tower Maguire is building just off the San Diego (I-405) Freeway and Jamboree Road (see story page 1).
Santa Monica-based Fremont General Corp. said last week it’s lined up a $1 billion expanded credit line with Credit Suisse AG for its shuttered Brea-based subprime mortgage business, Fremont Investment & Loan. The financing, along with word of a sale of mortgages to investors by San Diego’s Accredited Home Lenders Holding Co., gave a boost to beaten-down subprime lenders on Wall Street. The financing will allow Fremont “to exit the subprime residential loan origination business in an orderly and disciplined way,” the company said. Fremont, the third-biggest provider of subprime loans through brokers, closed its subprime business earlier this month. It put employees at the Brea-based unit on paid leave while it searches for a buyer.
Irvine-based subprime lender People’s Choice Financial Corp. has withdrawn plans for a $193 million public offering, the latest casualty of the tough market for Orange County’s mortgage sector. “Various business and market reasons” were behind pulling the filing, the company said in a letter to the SEC. Another subprime lender, Orange-based Master Financial Inc., stopped funding loans brought to it by brokers. The company, formed in 1981, said it stopped accepting applications for loans from brokers and is no longer funding loans in its current pipeline. The decision was “due to the rapid change and instability in mortgage industry.”
Irvine-based Broadcom Corp., looking to distance itself from a stinging options backdating scandal, named Eric Brandt its chief financial officer. Brandt, 44, has been chief executive of Aliso Viejo-based Avanir Pharmaceuticals since 2005. Prior to that, he was chief financial officer of Irvine’s Allergan Inc. He will be in place by the end of the month, taking over for acting CFO Bruce Kiddoo, who will resume duties as vice president and corporate controller. Kiddoo stepped in for Bill Ruehle, who retired last year when questions were first raised about how Broadcom granted stock options. Broadcom said in January that it would revise financial statements for 1998 to 2005 with charges of $2.2 billion to stock option grants that weren’t properly accounted for. Meanwhile, the company was near a settlement with rival chipmaker Qualcomm Inc., just days before trial was set to start in San Diego. The two have been locked in several disputes over chips used in cellular phones.
Ford Motor Co. has sold a majority, $848 million stake in Aston Martin, which has its U.S. headquarters in Irvine. The British automaker will be run by a group of investors, including racing mogul David Richards, car collector John Sinders and Kuwaiti firms Investment Dar and Adeem Investment Co. Ford is keeping a $77 million stake in the company. The deal values Aston Martin at $925 million, down from earlier projections of $1.2 billion.
ECONOMIC INDICATORS
The median price of an Orange County home rose by $20,000 from January to February but dropped marginally from a year ago. The median price of a home sold here was $620,000 in February, compared to $622,250 a year earlier. The 0.4% drop is the first year-over-year decline here in nearly a decade, according to La Jolla-based DataQuick Information Systems, a unit of Canada’s MacDonald Dettwiler and Associates. Prices now stand 3.6% below the county’s record high, set in June. Sales continued to slow. There were 2,449 homes sold here in February, down 2% from January and a 16% drop from a year earlier. New home sales are down about 36% from a year earlier.
