Abode Mortgage has found a “Toronto-based financial institution” to possibly purchase the company.
Abode closed its doors November 30 when it ran into problems funding its mortgages. (See Abode Mortgage…)
In a press release today, the company said:
- “It has signed a non-binding Letter of Intent with a prospective purchaser…”
- If the deal is closed, Abode will receive:
- “Payment to AMC to satisfy immediate working capital requirements”
- “Payments to the Company on or before closing to pay out the Company’s secured creditor and to cover Company expenses.”
- “Further payments to the Company over the next 3 years based on a percentage of AMC’s cumulative pre-tax profits.”
- The transaction hinges on:
- “The parties signing a binding share sale agreement”
- “The proposed purchaser being satisfied with AMC’s Approved Lender status with mortgage default insurers”
- “Obtaining Company shareholder and board approval”
- ”Obtaining TSX Venture Exchange approval”
- ”Arriving at a satisfactory wind down arrangement with AMC’s financier.”
Abode’s stock last traded at one cent on the TSX Venture exchange.
We’ll report additional details as they become available.
Brokers:
Does the situation with Abode where some have not been compensated for closed deals make you think twice about sending deals to small non-balance sheet lenders?
We have heard a lot about lenders becoming more selective about the brokers they choose to deal with. Does it work the other way around?
Even Xceed for a while didn’t look like it was going to make it.
jim,
just so long as you know that when you put your customer on that big banks balance sheet, their goal is to keep it from you forever. You lose they win. …ps..have you heard about the liquidity crisis around the globe. ?? abode got caught up in it. get educated and see what the big banks did to brokers in austrialia , once the monolines exited the market.
Hopefully abode solves its problems and comes back to the market to continue to support the broker industry. its these monoline lenders who are soley dedicated to brokers only. hopefully the professionals can support them, even when times get tough.
I am all for supporting monoline lenders, but let me tell you that my company and Employees lost over 12K just before Christmas and that was not very pleasant! I will support some monoline lenders, but the more established ones for sure.
If you keep a database and farm your database like everyone should, you will retain your clients loyalty and the bank won’t have a leg or rates to stand on.
Monoline lenders need better rates and products if they want to compete. Pleading to brokers for business is pathetic and won’t cut it.