Mortgage Lender Fall Out, and Why

Wow! What a ride! It’s been months and months now, and just when you think the smoldering has ceased, another lender goes down in flames. Our company immediately stepped back and evaluated our company and its ability and risk to survive where we currently stood back just over a year ago. We decided to take a business venture just before the real “stuff” hit the fan. Our business never changed, and any borrower or client using our services would not have been able to notice a single skip in our step. After pushing hard and settling down in our new home, wholesalers began their demise. The foreclosure market hit and lenders saw profits drop into losses. Underwriting tightened, and secondary markets refused loans from wholesalers to the extent that the “wholesale lines” backed up with loans that couldn’t be sold. After enough loans sit on those credit lines, it becomes a risk for the owners of those lines to continue allowing the wholesalers or correspondent broker companies fund with those moneys. So, they cut them off. In our new company, we saw very similar situations, so we backed out and got back into the world we started to re-evaluate our options. Here we stand, but not for long. If you would like to see the lending companies that have closed shop click on the this text. Anyway, in case you were wondering the direct cause of some of the fall out, that should brief you.