TURMOIL IN SUBPRIME LENDING DERAILS PACIFICAMERICA DEAL.Byline: Michael Nol Bloomberg News Fremont General Corp., an insurance and financing company, said it ended its agreement to buy PacificAmerica Money Center Inc., a mortgage banker Mortgage Banker A company, individual or institution that originates, sells and services mortgage loans. Notes: Don't confuse a mortgage banker with a mortgage broker. , amid a slump Slump A temporary fall in performance, often describing consistently falling security prices for several weeks or months. in the mortgage lending market. Santa Monica-based Fremont General agreed last month to pay $55 million in cash and stock for Woodland Hills-based PacificAmerica. Talks were scuttled as PacificAmerica's business of lending to home buyers with troubled credit deteriorated in recent weeks, the companies said. PacificAmerica lends money, then bundles the loans together and sells them for a profit. That business dried up in recent weeks as global economic turmoil discouraged dis·cour·age tr.v. dis·cour·aged, dis·cour·ag·ing, dis·cour·ag·es 1. To deprive of confidence, hope, or spirit. 2. To hamper by discouraging; deter. 3. investors from buying the loans. ``The market for subprime mortgages is fairly illiquid Illiquid An asset or security that cannot be converted into cash very quickly (or near prevailing market prices). Notes: A house is a good example of an illiquid asset. See also: Cash, Liquidity Illiquid In the context of finance. at this point,'' said Wayne R. Bailey, Fremont's chief financial officer. ``We felt it was best to call off the acquisition.'' Meanwhile, PacificAmerica's share price has plummeted. The company's stock has fallen 96 percent in the past 12 months, and PacificAmerica had a market value of $5.4 million on the stock market. The shares fell $1.0625 to $1.0625 Monday. ``The recent turmoil in the subprime lending  This article or section may deal primarily with the U.S. and may not present a worldwide view. industry makes it difficult to predict whether any transactions are likely to be completed,'' PacificAmerica said in a statement.
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