NetBank Explores Mortgage Options

The online banking company, which is based out of Atlanta, contracted a third party to market the platform, and to assist any potential buyers. The proposal will free up more than $20 million in risk-based capital which is currently allocated to its servicing asset. The freed capital would be invested in other business initiatives that are believed to be a step in increasing returns and better servicing shareholders. A net loss was recorded for 2005, with more than $180,000 cited in the mortgage area.

Initial projections showed a growth in the servicing asset to more than $25 billion for 2005, a number that has been hampered by cooling mortgage trends. Prevailing business conditions make the goal, in effect, unobtainable, and NetBank is now looking to sell its resources for their mortgage branch of service. The field of mortgages seems to no longer be a good use of capital for the company, causing the proposal of selling not only their mortgage service, but all of the portfolio mortgages that are currently being held by NetBank.