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Next round of mortgage bank closings...First Horizon and Franklin

Hate to be the bearer of bad news, but it looks like First Horizon Mortgage and First Franklin, owned by Merrill Lynch, are going to pull the plugs on their respective companies this week. My processor just was informed that First Horizon is not taking new files, and recent posts by First Franklin rep's basically say the same thing. The sub-prime crisis will continue to take down some pretty big names in our industry, so don't be surprised if you see some other pretty big names close their doors as well.

*** I have been informed that First Horizon is discontinuing accepting sub-prime files, and they are also reducing the number of branch offices. I was not so politely told that this was happening, which was not something my Account Executive mentioned. Personally I think the account executives of these wholesale companies would save themselves allot of trouble by communicating better with their broker companies.

**** This pattern of reducing programs, and closing branch offices has been a regular pattern for company's that are troubled. So though the first blog maybe incorrect, First Horizon is facing the same challenges of every other lender in this market.

Posted by Karl Christen Credit Restoration Specialist on 10/29/2007 11:36 AM

Comments (6)

first horizon, first franklin, mortgage closure, utah, banks, wholesale lenders

6 Comments on Next round of mortgage bank closings...First Horizon and Franklin

OCT

2007

Karl, we will see lots more pull from the market as it becomes less profitable. This is a sign of the USA's short term goals and bottom line mentality. What a mess we have on our hands.

Bank of America is also pulling the plug on the Wholesale market.

The refusal of First Horizon to accept new loan application is limited to the sub-prime market for obvious reasons. There is also a move to reduce relationships with Brokers whose licenses have expired. Finally, some of the branch offices are being closed down and in that instance then they will not accept new loan applications but refer the borrower to another branch.

Incomplete information is often the root of un-necessary panic and only serves to fuel the rumor mill. Perhaps more research on your part is warranted.

Incomplete communication by these lenders is also a reason why some brokers panic. So you can go lecture someone who cares.

Hi Karl,

I thought that First Horizon shucked their sub-prime sector months ago? It was called "First Connect" I believe. Maybe they still had it going in some states. We also just got an email from our AE after their regional meeting saying how wonderful things were...yes they were "trimming the fat" so to speak, but they were really well suited to make it through the not-so-fun-times.

First Franklin doesn't surprise me. I am so tired of hearing the sub-prime shtick. Many of them are trying to resurrect themselves as "fannie/freddy" lenders...we already have enough of them! Stay away!

OCT

2007

Look for them to shut down quietly before the end of the year. They will cease operations by the end of the year. Right now they are a still a billion dollar hot potato that no one wants to be responsible for. Stan was the only reason these guys were still open. Now that he is gone, the next executive can look like a champion when he gets rid of them.

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