Gleacher & Co. Inc. said it's selling its mortgage branch, ClearPoint Funding Inc., to Ocwen Financial Corp., Reuters reported.
The sale comes at a time when the company was having trouble finding a buyer after many tries. Beginning in 2010, they tried to improve ClearPoint revenue stream.
Founder, Eric Gleacher, retired from his post as chairman in January. He started the company in 1990 and was a long-time merger and acquisitions dealer. In 1978, he created the Lehman Brothers department and between 1985 to1990 he led the mergers and acquisitions at Morgan Stanley.
In 2010, Gleacher bought ClearPoint to profit from the downfall and return of subprime originators during and after the market crises, said Mark Pappas, overseer of Gleacher's securities said in an interview with Bloomberg.
Last year, ClearPoint failed to pay its lenders and were forced to delay annual reports for holders. They were eventually given waivers under revised agreements and obligations to creditors, Bloomberg reported.
Bloomberg added the default may have arisen from companies withdrawing from playing major aggregator roles in the mortgage industry.
As a result, Gleacher had to file warehouse lines with the Securities and Exchange Commission, SEC. Warehouse lines financed lenders like Clearpoint until they became sold, according to Bloomberg.
In the SEC filing last year, Gleacher said that "in recent months, ClearPoint has experienced liquidity constraints" and it "resulted principally from the rapid expansion of ClearPoint's business coupled with an unanticipated slowdown in loan purchases by one of ClearPoint's principal loan purchasers."
ClearPoint's revenue last year stood at $46. Million in 2011 with a loss of $3.7 million, according to Bloomberg interview with Gleacher's Chief Executive Officer Thomas Hughes.
ClearPoint Funding Inc.'s sale price has not yet been disclosed, but Gleacher reported to Reuters the deal will end the first quarter.
