Friedman Billings Ramsey to Shut Mortgage Unit
Friedman Billings Ramsey is closing down its mortgage bond unit, which handles the underwriting of mortgage-related asset-backed securities, as part of its restructuring plans.
Some of the affected employees will be relocated elsewhere within the company, according to a spokeswoman. The firm did not comment on how many staff will be moved or when this will take effect.
Friedman Billings is reorganizing itself as part of the deal struck with private equity firm Crestview Partners which took a $100 million stake in the firm in June. The deal entailed a restructuring of the firm into two different lines: a mortgage-backed securities business which encompasses the mortgage bond unit, and a capital markets subsidiary that will be structured as a real estate investment trust or REIT.
Co-founder Emmanuel Friedman abruptly resigned last year amid the Securities and Exchange Commission investigation into the firm's dealings with a hedge fund manager who was indicted earlier this month on five counts of securities fraud.
Russell Ramsey, who also co-founded the firm, previously departed, leaving chair and chief executive Eric Billings as the sole remaining co-founder.
In 2001, FBR restructured itself from being an investment bank into a real estate investment trust, or REIT, to provide a tax boost to its mortgage-backed securities business. Earlier this year, FBR sold nearly its entire MBS portfolio for around $7 billion.