Federal savings institution regulators on Friday announced another in a series of large rescue packages, providing $557 million in aid to a Michigan home-building company to acquire four insolvent Texas savings and loans.
Bank Board Chairman M. Danny Wall said the Federal Savings and Loan Insurance Corp., which insures deposits in the nation's 3,000 S&Ls, will provide $312 million in promissory notes and $245 million in additional cash assistance and guarantees over the next 10 years.Pulte Diversified Companies Inc., the acquiring company, is putting up $45 million for an 80 percent stake in the four thrift associations, all in the Houston area, and for a fifth institution, which was not identified.
Wall said the details on acquisition of the fifth institution would be released in a few days. He said several technical, but not serious, snags had developed in wrapping up the deal.
Pulte is investing $22 million for the four associations named Friday and $23 million for the fifth.
Officials declined to say how much government assistance would be injected into the fifth institution, but bank board member Roger Martin noted that the transactions were "parallel," possibly indicating that as much as another $500 million would be required.
Pulte, based in Bloomfield, Mich., a Detroit suburb, is a group of companies with $3 billion in assets. It has home-building, mortgage financing and home insurance operations in Arizona, California, Colorado, Florida, Georgia, Illinois, Maryland, Michigan, North Carolina, Texas and Virginia.
This transaction represents its first venture into the savings industry.
Wall said Pulte's new S&Ls will be permitted to lend to and invest in other Pulte subsidiary projects.
Stuart Root, FSLIC director, said interaffiliate transactions would be strictly controlled and monitored.
Many thrift institutions in Texas got into trouble in the first place through real estate construction and development loans and by directly investing in those projects. Real estate values in the region were dependent on the health of the once-booming but now moribund oil industry.