Here is the latest news just received this weekend.
Effective immediately, New Century Mortgage Corporation and Home123 Corporation are unable to continue the origination or funding of mortgage loans. No new loan applications are being accepted at this time.
Here is a brief list of the companies that have closed or scaled back:
E-loan announced it will close their sub prime wholesale division
ResMAE listed for sale. Wachovia Corp.'s consolidation of its recently acquired wholesale lenders American Mortgage Network , and World Savings operations will result in layoffs.
Fieldstone announced that it's closing 5 west coast branches including its Arizona operations. Fieldstone Mortgage also has closed their Las Vegas branch.
Mortgage Lender Network (MLN) "stopped funding residential loans" on 12/29 (they didn't actually say they were closing) but they have closed.
HMIC closed its doors on Dec 20. As part of a $100 million cost reduction strategy, Sovereign Bancorp its owner exited the wholesale mortgage market.
Own it Mortgage - closed its doors
Sebring Mortgage closed its doors
Axis Mortgage closed its doors
Oak Street Mortgage closed its doors
Right Away Mortgage closed its doors
Secured Funding closed its doors
Loans 123 - Not taking any more business Aegis Funding (sub-prime) closed its doors (Aegis Wholesale (Conforming and Alt-A) and Home Equity are still open) for now.
Option One (Owned by H&R Block, Owned By HSBC)- Is Up for Sale selling off it's portfolio Meritage Sold to Lime Financial Mandalay - Closed it Doors Southstar - AE's leaving (a good source stating company cannot meet payroll obligations)
Accredited - OC Regional office production at its lowest levels, rumors they may close by 1st qtr.
Saxon - Layoffs possible closure.
RFC - Layoffs
Decision One closed 6 regional centers. Division of Option One.
Bank of America Mortgage - experiencing large layoffs (laid off 225 in CA)
Countrywide Mortgage - Multiple layoffs. In talks with Bank of America about possible merger (CNN). Countrywide has also filed suit against 15 parties alleging that the company may have been tricked into lending as much as $40 million dollars (figures elsewhere say $80 million.) The defendants include eight individuals an appraiser, a property management company, and several mortgage and lending companies. According to The Wall Street Journal, another large lender, Argent Mortgage Company may also have been caught up in the scam. Some of the bad loans also appear to have been acquired by Fannie Mae. Argent consolidated and let 1,000 people go. Currently for Sale
Ameriquest laid off 3,800 and shut 229 retail branches after announcing a $325 million settlement with state's attorneys general for overcharging borrowers. THEY MAY NOT LAST TILL SPRING.
Washington Mutual - Continued layoffs. Wholesale reps offer 1 pt to realtors for referral of loans. (Cutting the throats of their Broker base! (Not good for biz!) WAMU also exited their correspondent business and no longer doing custom construction loans.
Encore Credit - closed its doors
Acoustic Home Loans closed its doors due to a sudden increase in repurchases.
Ampro, gone, acquired by United Financial Corp.
I have been in the foreclosure industry for 15 years. I have seen the amount of homes in foreclosure in the counties of King, Pierce and Snohomish double in the last couple of years. The lenders above closing their doors is in most part due to the inability of the borrowers to pay back the money borrowed. It was easy for the borrowers to qualify and obtain the money but obvious that they couldn't afford the money to begin with. I expect to see the amount of foreclosures initiated in these same counties to double again. Not only because they could not afford the money to begin with but add to that the fact that most of the lenders above are sub-prime lenders. The products they offered that were at all attractive were 2 and 3 year adjustable rate mortgages(ARMs). We are now approaching those adjustable periods making the ARM's even more unaffordable for the borrowers. Sometimes adjusting 2-3% higher than the initial interest rate.
Real estate agents should brush up on the foreclosure process and "short sale" procedures. These types of listings will increase.
Mortgages brokers should probably concentrate on 'A' paper purchases and refinances. Because oddly enough rates for those borrowers are lower than I have seen in awhile.