Option One Mortgage Corporation

Option One Mortgage Corporation Option One Mortgage Corporation was a California-based mortgage lending firm founded in 1987 that grew into a nationwide originator and servicer before its acquisition and integration during the mid-2000s mortgage consolidation wave. The company operated within markets served by firms such as Countrywide Financial, Wells Fargo, Bank of America, GMAC Mortgage, and Washington Mutual, competing for retail and wholesale mortgage production across regions including California, Florida, New York (state), Texas, and Illinois.

History

Option One emerged in the late 1980s amid structural shifts led by institutions like Freddie Mac, Fannie Mae, Federal Home Loan Mortgage Corporation, Lehman Brothers, and Bear Stearns. During the 1990s expansion, Option One paralleled strategies used by Homestead Savings Bank, IndyMac, Countrywide Financial Corporation, Washington Mutual, Inc., and Sears Roebuck and Co. affiliates to scale retail branches, correspondent channels, and broker networks. By the early 2000s the firm operated alongside originators such as Peoples Mortgage Company, Ameriquest Mortgage, New Century Financial Corporation, and Wells Fargo Home Mortgage. Corporate maneuvers in the 2000s placed Option One within the consolidation trend dominated by JPMorgan Chase, Citigroup, Goldman Sachs, and Morgan Stanley.

Business operations

Option One’s operations included retail lending, wholesale lending, loan servicing, and correspondent relationships similar to those of Ocwen Financial Corporation, PHH Corporation, Ally Financial, and Flagstar Bank. The firm originated adjustable-rate mortgages comparable to products marketed by Countrywide Financial, IndyMac, Ameriquest, and Novastar Financial, and offered fixed-rate loans competing with Bank of America Home Loans, Chase Home Finance, HSBC Bank USA, and SunTrust Banks. Servicing platforms handled portfolios akin to those of Select Portfolio Servicing, Wells Fargo Home Mortgage, and Saxon Mortgage Services, with secondary market sales interfaces to Fannie Mae, Freddie Mac, Deutsche Bank, and Citigroup Global Markets. Option One’s credit underwriting practices resembled contemporaneous approaches employed by New Century Financial Corporation, First Franklin Financial Corporation, and Countrywide Home Loans.

Financial performance and acquisitions

In the early 2000s Option One experienced growth in loan originations reflecting trends tracked by Moody's Investors Service, Standard & Poor's, Fitch Ratings, and S&P Global. The company’s portfolio movements paralleled securitization activities of Bear Stearns, Lehman Brothers Holdings, Merrill Lynch, and Goldman Sachs, which packaged mortgages into mortgage-backed security structures alongside issuers like Bank of America Merrill Lynch. Acquisition interest and asset purchases during the 2000s mirrored transactions involving IndyMac Bancorp, New Century Financial, Ameriquest, and Countrywide Financial Corporation. Ultimately, strategic decisions by parent companies and purchasers such as HSBC Holdings, Deutsche Bank AG, and Aurora Loan Services influenced Option One’s disposition during the 2007–2008 market retraction.

Legal issues and controversies

Option One became associated with litigation and consumer complaints similar to disputes involving Countrywide Financial, Ameriquest Mortgage Company, IndyMac, and New Century Financial Corporation. Allegations included loan origination irregularities akin to claims against First Franklin Financial Corporation, servicing disputes comparable to actions involving Ocwen Financial Corporation and PHH Corporation, and foreclosure practices scrutinized in cases alongside Wells Fargo, JPMorgan Chase, and Bank of America. Litigation paths frequently intersected with plaintiffs represented as in suits against Securities and Exchange Commission, U.S. Department of Justice, California Department of Corporations, and state attorneys general such as California Attorney General and New York Attorney General.

Regulatory actions and settlements

Regulatory scrutiny of companies in Option One’s sector involved actions and settlements reminiscent of enforcement brought by Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, Federal Reserve Board, and Consumer Financial Protection Bureau. Settlements and consent orders in the mortgage industry during the 2000s involved counterparties such as Countrywide Financial, IndyMac, Ameriquest, Washington Mutual, and New Century Financial Corporation, and affected practices overseen by Federal Housing Finance Agency and Department of Housing and Urban Development. Multistate investigations coordinated by coalitions including offices like the Massachusetts Attorney General, New Jersey Attorney General, Pennsylvania Attorney General, and Texas Attorney General produced remedies addressing loan servicing, mortgage origination disclosures, and foreclosure procedures, setting precedents that influenced post-2007 restructurings in which Option One and peers took part.

Category:Mortgage lenders of the United States Category:Companies based in Irvine, California