Realtors: be aware than pre-approval letters you may have received previously from mortgage brokers may not be worth the paper they're written on, as the wholesale lender who may have approved the scenario is likely no longer in business or tightening its guidelines. Prepare your buyers to have to come up with higher down payments, especially if their credit is shaky. The conventional wisdom is that the freefall we saw in wholesale mortgage stocks last week was isolated to subprime and would likely not reverberate throughout the capital markets. I think that assessment is wrong and this meltdown will have serious repercussions in our industry. There are now over 50 lenders in serious trouble or out of business, and nearly all the remaining lenders are or will be tightening their credit guidelines, making it much harder for consumers, even ones with good credit to purchase or refinance homes.
Accredited Home. Panic selling; analysts are fearful about liquidity and have downgraded rating from "hold" to "sell"; $100 million drop in annual net income expected; missed earnings filing deadline with the SEC.
Acoustic Home Loans. A harbinger of the broader meltdown, Acoustic Home Loans ceased accepting new loan submissions last year; buybacks were a major factor in collapse, according to BusinessWeek.
Aegis Funding. Subprime unit has closed and a consolidated operation is reportedly handling prime, slimmed down subprime and expanded Alt-A offerings.
Alliance Home Funding. Closed. Parent has folded mortgage brokerage into bank and "taken pre-tax charge of $680000 and an after-tax charge of $449000 to wind down the Alliance Home Funding operation," according to fourth-quarter earning statement.
Ameriquest. Parent ACC Holdings had to beg Mass. Gov. Deval Patrick, former director, to help get them a life-sustaining line of credit from Citigroup to avoid shutting down. They've shut most of their offices, laid off 3,800 people, and have settled with 30 state attorney generals for $325 million over predatory lending practices.
Ameritrust Mortgage Company. Shutdown, according to email to brokers: "Effective Monday, March 05, 2007 the subprime wholesale division of Ameritrust Mortgage Company is no longer in operation. Due to market conditions, our warehouse provider, Washington Mutual, ceased funding for subprime loans."
Argent. Owned by ACC Holdings but may be acquired by Citigroup as part of a deal for working capital and a credit line for ACC if it falters.
Axis Mortgage & Investments. Parent Biltmore Bank of Arizona closed this wholesale subsidiary in November 2006 due to "current lending environment and current conditions of the real estate market."
Bay Capital/Clear Choice Financial. Press release on January 12, 2007: "Clear Choice has...announced that it is insolvent and in default on numerous obligations…. officially closed the mortgage lending offices of its wholly owned subsidiary, Bay Capital"
Central Pacific Mortgage. Shuttered its door because it was apparently unable to make February's last payroll, mostly due to rising buyback costs.
Coast Financial Holdings. Distressed because of developers unable to complete construction has put $110 million in loans in jeopardy for loans for 480+ homeowners.
Coastal Capital. Shut down; owner & president indicted in Duke Cunningham scandal.
Concorde Acceptance. Closed as of January 31st, 2007.
Countrywide. Stock in a freefall after announcing that close to 20% of its subprime loans are in default. $600 million worth of stock sold by insiders. Reportedly in talks over a merger or alliance with Bank of America.
DeepGreen Financial. Closed as of January 31, 2007 by parent Lightyear Financial, a private equity firm.
DomesticBank. Stopped wholesale operations on 3-2-06, according to their website.
Doral Financial Corp. Has agreed to pay a penalty to settle fraud charges with the U.S. Securities and Exchange Commission for a close to 1 billion overstatement in earnings. On March 2nd, 2007, said it will post losses for 2006 and warned on of a cash crunch if it is not able to refinance $625 million in debt.
Eagle First Mortgage. AZ regulators shut them down citing illegal lending practices. Has until 3-14-07 to wind up operations.
Encore Credit/ECC Capital. Was supposed to be sold to Bear Stearns for $26 million; ECC wound up paying Stearns $7 million to take it off their hands.
EquiBanc. Closed by parent Wachovia after "intensive strategic review."
Fieldstone. Closed 6 operation centers; had to restructure lines of credit; bought by C-Bass (MGIC & Radian Group) after losing more than 70 percent of it's value.
First Franklin. Acquired by Merrill Lynch from National City
Franklin Financial. Apparently has shutdown its wholesale operation as of 5pm 2-28-07; retail may be still alive
Fremont General. FIL (Fremont Investment and Loan, its subprime subsidiary) has been ordered to cease-and-desist by the FDIC
FundingAmerica. Closed as of January 19, 2007, little information available on their website.
Harbourton Mortgage Investment Corp. Closed as of December 20, 2006, according to company press release "HMIC was forced to take these actions when it was unable to satisfactorily resolve mortgage repurchase claims."
Home 123 Corp. A subsidiary of New Century; two dozen offices shuttered and 200 jobs cut as of January 17, 2007.
Ivanhoe Mortgage. Unable to fund operations due to a shortage of cash, according to CEO John Cassel
Lender's Direct Capital Corporation. Closed wholesale operations due to "lack of demand" effective 2-8-07.
Mandalay Mortgage. Notified its brokers that it has exited the nonprime wholesale mortgage business. A message on its Web site said no new loans will be funded after Jan. 31, 2007.
Master Financial. From email to brokers: "Effective March 14th,  Master Financial will cease its wholesale loan origination operation including accepting new applications for mortgage loans and funding loans in its pipeline."
Merit Financial. Shut down because of "rising interest rates". State regulators investigating.
Meritage Mortgage. Business shut down by parent NetBank. Staff acquired by LIME Financial.
Millenium Bankshares. Winding down all mortgage lending activity by the end of 2006 to "avoid the risks normally associated with mortgage banking activities," according to press release.
MLN (Mortgage Lenders Network). Has filed for Chapter 11, issued a cease and desist order Jan. 24 by Connecticut banking officials.
NetBank Inc. Laid off the remaining portion of its staff in December after shutting down its subprime subsidiary Meritage.
New Century. Stopped funding; criminal probe; in breach of debt covenants and trying desperatly to get waivers; restating '06 earnings downwards; 10 class-action shareholder lawsuits; may be in "death spiral", according to analysts.
Novastar. Seriously impaired; likely no dividends in 2007, no taxable income through 2011; many shareholder lawsuits.
Option One. Owner H&R Block has publicly announced it will be sold by end of March 2007.
Origen Wholesale Lending. This modular home lender is transferring its wholesale operations to its correspondent partners.
OwnIt. Ceased operations in December 5th 2006, Filed bankruptcy December 28th.
Popular Financial Holdings. Parent shutting it down and completely exiting wholesale subprime to "focus on profitable businesses".
Preferred Advantage. Closed completely when parent National City sold First Franklin.
ResMAE. Filed Chapter 11 bankruptcy; assets purchased by Citadel Investment Group; being hounded by Merril Lynch for more than $300 million in bad loans.
ResCap. Laying off about 1,000 people; may force former parent GM to take a $950 million hit due to "loan loss provisions", according to terms of its sale to Cerberus Capital, says Marketwatch.
Rose Mortgage. Posted on its website: "EFFECTIVE IMMEDIATELY ROSE MORTGAGE CORPORATION IS CLOSED."
Sebring Capital Partners. Shut its doors as of December 5th, 2006 due to rising defaults, according to company employee quoted by the Denver Post.
SecuredFunding. Ceased funding "based upon market conditions and limited product availability", according to website.
Silver State Mortgage. Per their website, shut down nationwide wholesale operations as of February 14, 2007.
Summit Mortgage. "Came to terms with a difficult business model in an unforgiving economy."
Trojan Lending. "Effective as of the opening of business on Monday March 5, 2007, Trojan Lending has ceased its wholesale mortgage operations and will no longer be underwriting or funding wholesale mortgages nationwide."
I think that we will see an even bigger spike in foreclosures as it becomes harder and harder to get customers approved, and customers who are locked into 2/28 and 3/27 subprime adjustable rate mortgages (the "Exploding ARM's) won't be able to refi as credit tightens and rates go up even higher. That loud hissing sound? That's the air coming out of the housing bubble. Let me know what your take is on the repercussions for our industry and the best steps to take going forward. A hat tip to The Mortgage Lender Implode-O-Meter Blog and the Bakersfield Bubble.