Ticor Shuffles Board at Loan Insurance Unit

Ticor restructured the board of its ailing mortgage insurance underwriting subsidiary Thursday, ousting all outside directors and cutting the 15-person board to five members.

The reshuffling comes amid speculation by sources within the insurance industry that the unit, Ticor Mortgage Insurance, soon may be declared insolvent and taken over by California insurance regulators. Ticor denied the rumors.

Three Ticor officials remain on the subsidiary’s board, and two other Ticor executives were added to it. Continuing as directors are Winston V. Morrow, Ticor president and chief executive; William J. Fitzpatrick, Ticor Mortgage chairman and chief executive, and Rocco C. Siciliano, chairman of Ticor’s executive committee.

Newly elected as directors of the mortgage unit Thursday were Leonard T. Wood, executive vice president and chief financial officer of Ticor, and Kurt G. Pahl, Ticor vice president and treasurer.

Ticor Mortgage faces a potential loss of $166 million in connection with delinquent payments on loans that it insured for Equity Programs Investment, known as EPIC.

EPIC, a real estate syndicate in Falls Church, Va., defaulted in August on payments of $1.4 billion in mortgages and mortgage-backed securities. The default triggered a run on deposits at EPIC’s parent, Community Savings & Loan Assn. of Bethesda, Md.

In September, Maryland took control of the day-to-day operations at the thrift, and most of EPIC’s limited partnerships filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code. The partnerships were marketed as tax shelters.

Morrow denied rumors that state officials soon might take over the ailing unit, saying that state Insurance Commissioner Bruce A. Bunner was in his office on Wednesday “and everything was amiable.”

Taken off the board Thursday were three Ticor Mortgage executives: Gary W. Bradford, president and chief operating officer, and Robert Cohen and Thomas A. Kennedy, both executive vice presidents. All three will retain their positions at the mortgage subsidiary. Also, John C. H. Hooff Jr., another executive vice president at Ticor Mortgage, was removed from the board and will also be leaving the company, Morrow said.

The outside executives who were removed are: James A. Coles, vice chairman of First Federal Savings of Arkansas in Little Rock; Dennis D. Hill, partner in Hill, Wynne, Troop & Meisinger in Los Angeles, and James C. Johnson, president of Loyola Federal Savings & Loan Assn. in Baltimore.

Also removed were Anita Miller, chairman of Amerifederal Savings Bank in New York; Paul J. O’Brien, senior vice president and realty adviser for Security Pacific National Bank in Newport Beach; Robert F. Seaton, president and chief executive of Cardinal Federal Savings & Loan Assn. in Cleveland; Christopher J. Sumner, president of Western Savings & Loan Co. in Salt Lake City, and Richard C. Van Dusen, partner in Dickinson, Wright, Moon, Van Dusen & Freeman in Detroit.

Morrow said the reshuffling was undertaken because Ticor Mortgage’s troubles prevent it from accepting new business and so the larger board was no longer needed. In addition, he said, “several of (Ticor Mortgage’s) directors are associated with institutions which own mortgages or mortgage-backed securities issued by EPIC. It appeared that, depending on future developments, (the mortgage unit’s) interest could be adverse to the interests of some of these institutions.”

Morrow said he was referring to Sumner and Van Dusen, who he said have strong ties to the Federal National Mortgage Insurance Co., one of the nation’s largest buyers and sellers of mortgage-backed securities. In September, Fannie Mae said it would no longer buy mortgages insured by Ticor. Van Dusen is a director of Fannie Mae, but Morrow was not sure of Sumner’s exact connection.