May 18, 2009 (FinancialWire) — Municipal Mortgage & Equity, LLC (OTC: MMAB) (Current Market Cap: US$14.64 Mil.) has closed on the sale of its agency lending operations to Oak Grove Commercial Mortgage LLC, a new company formed by Mud Duck Equities LLC.

Under the two part transaction, the company received a $15 million bridge loan from Oak Grove and agreed to sell its agency loan operations in a deal in which Municipal would receive $23.5 million in a combination of cash and forgiveness of the loan and three series of preferred interests in Oak Grove with a combined liquidation preference of $47 million.

The preferred interests are subject to reduction in some instances, including reduction of up to $30 million to the extent Oak Grove is required to make loan loss sharing payments to Fannie Mae and other government sponsored agencies with regard to loans that had been sold to those agencies by the company.

The business sold consists of underwriting, originating and servicing affordable housing and market rate multifamily apartment project loans that are sold to or insured or guaranteed by the government sponsored entities Fannie Mae and Freddie Mac and by HUD/FHA.

Baltimore-based Municipal Mortgage & Equity and its subsidiaries arrange debt and equity financing for developers and owners of real estate projects.

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