Brea-based subprime mortgage lender ResMae Mortgage Corp. on Monday said another bidder, Citadel Investment Group LLC, beat out Credit Suisse Group with a $180 million bid for the company.
Citadel offered $20 million for ResMae’s lending operations and 98.5 cents on the dollar for the company’s $160 million in loans, according to a Bloomberg story.
“Citadel stepped up and gave us a firm bid,” Ron Greenspan, a financial adviser for ResMae’s creditors, told Bloomberg.
The deal is subject to bankruptcy approval, which was expected later on Monday.
In February, ResMae said it filed for bankruptcy protection and planned to accept an offer from Switzerland’s Credit Suisse of $19.1 million for the lending operations and 98 cents on the dollar for the $160 million loan portfolio. Credit Suisse also had a number of conditions with its bid.
Citadel challenged Credit Suisse’s bid last week.
In its bankruptcy filing, ResMae said, the market for subprime mortgages, which are made to borrowers with imperfect credit, “has recently been crippled and a number of companies stopped originating loans as U.S. housing sales have slowed and defaults by borrowers have risen.”
The move marks a dramatic turn for ResMae.
Jack Mayesh, Ed Resendez and Bill Komperda started ResMae in 2003. They previously ran Long Beach Financial Corp., a former unit of Orange-based ACC Capital Corp. that went public in 1997 and was bought in 1999 by Washington Mutual Inc., which still runs the operation from Anaheim.
ResMae grew quickly during the mortgage boom, raising more than $100 million in financing by 2005.
Investors include leverage buyout firm Texas Pacific Group, hedge fund TPG-Axon Capital Management LP, TH Lee Putnam Ventures and money manager Putnam Investments.
Two years ago, ResMae leased a 130,000-square-foot office building at Newport Beach-based Olen Properties Corp.’s Olen Pointe Brea.
