Nearly 150 Mortgage Operations Collapse in 2007
DALLAS -- (Jan. 22, 2008) /PRNewswire/ The failure of almost 150 mortgage operations was chronicled last year by http://www.MortgageGraveyard.com, a journal of failed, ailing and acquired lenders.
During 2007, 147 mortgage units were shut down, according to the Mortgage Graveyard, which is maintained by http://www.MortgageDaily.com.
Companies tracked primarily included those that employed at least 50 people -- though it is estimated that hundreds of failed companies, mostly mortgage brokerages, were under the radar.
Number of Failed Companies
|2008 (through Jan. 22)|
Among last year's most notable failures were American Home Mortgage Investment, Mortgage Lenders Network USA, New Century Financial and Option One Mortgage Corp. Other significant collapses included Ameriquest Mortgage, Fieldstone Investment and First Magnus Financial.
The mayhem began in late 2006 as investors of residential mortgage-backed securities began demanding that subprime originators repurchase loans that quickly soured as the U.S. real estate market began to weaken. Among the first casualties were Meritage Mortgage, Ownit Mortgage Solutions and Sebring Capital Partners.
After JP Morgan Chase sold off much of its subprime mortgage holdings in January 2007, the meltdown gained steam. When New Century stopped taking applications in March, it became clear that the subprime sector was suffering a full blown meltdown.
By August, the meltdown became a worldwide credit crisis -- impacting Alt-A lenders, jumbo lenders and companies that had done no lending at all.
Global subprime related losses now exceed $170 billion and projections call for losses to surpass $450 billion.
Based on January activity, MortgageDaily.com projects fewer mortgage companies to fail this year than in 2007.
"The subprime mortgage industry, which took decades to develop, was mostly dismantled over the past year," said Sam Garcia, who spent 20 years in subprime mortgage lending prior to becoming publisher of MortgageDaily.com in 2000. "In addition, we have seen a significant shift away from mortgage brokering as both Alt-A and subprime wholesalers have shut down. Surviving lenders are primarily originating conforming loans through their own employees."
A complete report of all failed companies is available at:
Founded in 1998, MortgageDaily.com is a dominant online news source for the mortgage industry. Around one million mortgage business news pages are viewed monthly at MortgageDaily.com and its affiliate publications.
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