FMF Capital Group Ltd. said late Friday the the subprime lender will conduct what it called “an orderly wind-down” of FMF Capital LLC, its primary operating subsidiary. The company said in a press statement that its decision was the result of the “continuing rapid and severe deterioration of the U.S. nonprime mortgage industry,” as well as other factors affecting its overall nonprime mortgage business. FMF said it had previously retained a financial advisor to explore all potential strategic alternatives, including a potential sale of the business, which did not result in any viable alternative other than closing its doors. FMF Capital Group was a residential mortgage lending company that originated and funded primarily subprime mortgage loans in the United States and sold those mortgage loans to institutional loan purchasers. During the fiscal year ended March 31, 2006, FMF Capital Group originated its mortgage loans through a network of more than 4,400 independent mortgage brokers, in 39 of the 50 United States and in the District of Columbia.
The company had been trading on the Toronto Stock Exchange in spite of its U.S.-based business, but had its listing pulled earlier last week for failing to meet the listing requirements of Canada’s largest exchange. Last month, FMF Capital reported an quarterly net loss of $23.6 million, after a $22.6 million writeoff of intangible assets and goodwill. The company said on February 13 that it had deferred distributions as U.S. housing markets quickly eroded net interest margins at the subprime lender. FMF officials were not available for comment, and the company’s website had become unavailable by the time HW published its report.
