Aames Mortgage was founded in 1954, and specializes in loans to borrowers with poor credit. They are a wholly owned subsidiary of Aames Investment Corp. Aames operates from ninety offices across the United States, four traditional broker offices, and two National Loan Centers, through affiliations with sites on the Internet. They originate both on the retail and wholesale level. The company holds a portfolio of loans, mainly adjustable rate/hybrid loans, and sells the fixed-rate loans to third parties. The mission of the company is to provide loans to the underserved market of credit-challenged borrowers.
Loans Offered by Aames Mortgage
- Fixed rate mortgage
- Adjustable rate mortgage
- Refinance products
- Home equity loans
- Home improvement loans
- Debt consolidation
In the first quarter of 2006, Aames generated $1.6 billion in loans, up 15% from a year ago. Retail loans were up 44% over the first quarter 2005, and accounted for 48% of the loans originated this quarter.
Aames also announced in its first quarter report that it is negotiation for merger or sale with another financial institution; it is very probable that this transaction will be completed in the second quarter of 2006. Credit Suisse has been retained as financial advisor for this transaction. The company has been reorganizing for more efficiency, closing two wholesale offices and focusing on the retail segment of its business. It has been selling loans with higher risk factors, and retaining those that promise a more steady return.
The wholesale price on riskier loans is decreasing as interest rates rise; clearing these loans from its portfolio puts Aames in a better position to maneuver the changing market. Aames is also trimming its costs of generating loans, by moving out of the wholesale business and tightening its credit worthiness guidelines.
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