Abode Mortgage Holdings is selling its mortgage business to a Vancouver-based private investment firm, a move that comes after the company's financier withdrew from its existing funding agreement.
"We are confident that this business will have a bright future once it has been adequately and more appropriately capitalized," said Abode CEO Mike Linehan in a statement. "While we are disappointed that this recapitalization could not occur within the framework of continued ownership by the Company, we are confident that the agreement reached today represents the best option available under the circumstances."
Linehan added that more information on the transaction will be released upon removal of sale conditions and there are arrangements for interim funding and mortgage loan purchases. The new owners of the company will pay Abode up to $3.5 million in annual cash installments for the mortgage business, the statement said.
The Vancouver-based Abode launched its residential mortgage lending services in February 2007, working through the broker channel and offering high ratio prime mortgages. It expanded services into Atlantic Canada in July.