BEWARE - Mortgage Lenders STOP BUSINESS with no warning

By
Mortgage and Lending with HOPE Lending LLC

Has this happened to you? 

~ You're working with a borrower and have an approval, maybe even have completed their signing and then the loan doesn't fund. 

~ Or you have a file submitted and the account rep falls off the face of the earth.

~ I just recently had an approval on a VA Loan to find out now the product no longer is offered!

In this business time is of the essence.  We also have a responsibility to conduct our due dilligence when choosing a lender for our borrowers.

A very helpful website that I use to check on lenders and their ability to stay in business is The Mortgage Lender Implode Meter.

Mortgage Implode

As of March 3, 2008 they report 232 major U.S. lending operations have "imploded" since late 2006.  They include current News and a Discussion Forum

The most useful tool of this website is the Ailing/Watch List Lenders(tm):

17. American Equity Mortgage, Inc.
16. CTX Mortgage Company (Retail)
15. Chase Home Equity (Wholesale)
14. First Horizon Home Loans
13. Gateway Funding
12. BankUnited (Wholesale)
11. Casa Blanca Mortgage/Shearson
10. Bear Stearns Mortgage
9. Chevy Chase Bank - Wholesale
8. Washington Mutual
7. IndyMac Bancorp
6. MortgageIT
5. Sallie Mae
4. Meridias Capital
3. Doral Financial Corp.
2. Evergreen Investment+Carnation Bank
1. Residential Capital, LLC*

I would suggest this site for anyone interested in direct Mortgage News relating to the risk of the lender either not being in business to fund your loan or dropping the product available.

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Rainer
30,522
Charles Tharp
Prudential California Realty - Fontana, CA
Inland Empire, Real Estate & Short Sale Specialist
I actually had 4 casualties like this. All were refinances (back in my loan officer days) with the same lender and the lender went belly up without any notice. In fact one of my clients called to tell me before the bank rep did. I lost all four deals and about $20k in commissions.
Mar 03, 2008 07:15 AM #1
Rainmaker
78,932
Randy "Lazarus" McAtee
Lazarus Realty - Fresno, CA
Owner/Broker, Lazarus Realty, Fresno California
Huge shake up going on but it looks like things might be settling down a little - only time will tell.
Mar 03, 2008 07:16 AM #2
Rainer
29,675
Steven Odierno
Mahwah, NJ
NJ Mortgage & Marketing Professional

Hi Leslie - I have been through what you described more times than I can recall.  In 2006, my little company closed 423 loans.  91% of the lenders with whom we arranged those loans are no longer in business.   

Mar 03, 2008 08:58 AM #3
Rainmaker
1,073,964
Gary White~Grand Rapids Home Selling Pro Call: 616-821-9375
Flexit Realty "Flexible Home Selling Solutions" - Grand Rapids, MI
Real Estate Services You can Trust!
Hi Melissa, this is great information on lender watch....I have had it only happen once where they closed later the same day as a loan funding packet arrived....of course the loan ended up not funding....big mess.  Nice post.
Mar 03, 2008 09:02 AM #4
Rainer
33,856
Melissa Olson
HOPE Lending LLC - Bellevue, WA
HOPE Lending LLC

Charles - are you still working as a loan officer?  Thanks for sharing.

Randy - do you mean settling down because we have less activity?

Steven - sounds like you made it through ok.  By the way, I am "Melissa".  :)

Hi Gary!  Hope this website is helpful to you in the future then.  Thank you for sharing.

Mar 05, 2008 11:33 AM #5
Ambassador
749,660
Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

Melissa... that does stink, but hence why I like working for a banker.  We underwrite, close, and fund our own loans. And then we wait for the investor to buy it off our warehouse line. If that happened to us, with a particular program, we would just turn around and send a closed package to another investor.

In regards to the current lenders on the fence, I know Mortgage IT and Indy Mac have been on that list for a while.

jeff belonger
Mar 05, 2008 02:38 PM #6
Rainer
33,856
Melissa Olson
HOPE Lending LLC - Bellevue, WA
HOPE Lending LLC
Oh Jeff - YOU are the smart one.  I bet nobody pulls the plug on your machine and takes your wine away.  lol  Glad you guys are able to keep selling them.  I just watched National City pull the plug here last week.  I used to use Mortgage IT and IndyMac and am staying away from them because of this list and the news.  Good stuff. 
Mar 05, 2008 04:29 PM #7
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Melissa Olson

HOPE Lending LLC
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