TORONTO — FMF Capital Group Ltd., a lender of mortgages to higher-risk borrowers in the United States, has decided to wind down its business because of the “severe” deterioration in the U.S. market.
The Toronto-listed company announced late Friday it has decided to conduct an orderly wind-down of the business of its main U.S. operating unit, FMF Capital LLC.
“This decision by the company was made as a result of the continuing rapid and severe deterioration of the U.S. nonprime mortgage industry and other factors affecting its overall non-prime mortgage business,” FMF said.
The company had tried to sell the business as part of a strategic review but its “efforts did not result in any viable alternative.” FMF said.
Earlier this week, the Toronto Stock Exchange said FMF Capital will be delisted in early April for failing to meet listing requirements of Canada's major stock exchange.
Last month, FMF Capital reported an October-December net loss of $23.6-million (U.S.) after a $22.6-million writeoff of intangible assets and goodwill. The company deferred distributions as it tried to deal with financial woes linked to the battered U.S. housing market.
FMF did its business in the troubled U.S. non-prime mortgage market and kept its accounts in U.S. dollars, but was floated as an income trust on the TSX in March, 2005, at $10 (Canadian) per unit.
The company plunged to penny-stock status eight months later as it eliminated its payout to investors.
