While Aegis Mortgage Corp.’s wholesale subprime business may be struggling, the company is denying rumors that it is shutting the unit down. A consolidated operation is reportedly handling prime, slimmed down subprime and expanded Alt-A offerings.
The Houston-based company has closed its Denver, Colo., and Jacksonville, Fla., offices, Pat Wente, vice president, corporate communications, told MortgageDaily.com. The operations, which processed subprime loans, are being transferred to its processing center at its headquarters location.
She denied reports that Aegis was shutting down its subprime lending operations, insisting, “We are not getting out of the subprime business.
Eighty-seven operations support people in the Denver and Jacksonville offices, but no account executives, have been laid off, she said.
“We did not let any account executives go because we will continue to offer a limited subprime product menu,” she said.
“Of course, it’s a rough market year for the subprime wholesale business,” she admitted, “so we are kind of scaling back a little bit on the subprime side of the business.
“But the prime wholesale side of the business is just doing great. We’ve had a terrific year with that.”
While Aegis’s subprime wholesale business has become “pretty rough,” both its subprime retail arm and its home equity division are doing “fine,” with its subprime retail arm having a “pretty good year,” Wente pointed out.
However, while Aegis may not have let any account executives assigned to the closed offices go, it may have let go some account executives assigned to its main office in Houston. When MortgageDaily.com called that office and asked for a specific account executive, it was told, “He no longer works for us,” with no explanation provided.
Wente did not respond to a question regarding the status of account executives at Aegis’s central office.
The office closings came exactly two weeks after Aegis combined its two wholesale operating units, Aegis Funding Corp, which specialized in funding subprime loans, and Aegis Wholesale Corp., which specialized in funding prime and alt-A loans. When it did this, Aegis said in its announcement that subprime loan submissions would continue to be processed through the now-closed former AFC centers in Denver and Jacksonville.
Combining those two units is “working out well” because brokers no longer specialize in either prime or subprime lending, Wente said.
“We find that more of our brokers are looking for a broader range of products,” she explained. “There’s not as strong a line between prime and subprime as their used to be. So if we have good broker relationships and brokers now need something they didn’t need before because now a customer needs it, it’s working nicely for us.”
On December 14, the day after closing its two operation centers, Aegis notified brokers that it is “offering a little more limited menu on the subprime wholesale side and expanding our alt-A products,” Wente said.
She did not respond to repeated requests to identify the new products being added or the old products being dropped from Aegis’s menu, except to say that Aegis had no timeline for when the new products would be introduced.
And while stating that all 36 of Aegis’s wholesale branch offices as well as its retail offices were remaining open, she did not provide the number of existing retail offices as requested.
