Servicing will keep a Florida nonprime wholesaler afloat while it negotiates a deal to return under a new business model.
As of Friday, ACT Mortgage Capital stopped accepting new loan applications, ACT President and Chief Executive Officer Nelson S. Haws told MortgageDaily.com in an e-mail statement.
The Sunrise-based wholesale lender, which focused on Alt-A and subprime programs, indicated the existing business model was to blame.
"The company is currently negotiating a capitalization deal," Haws said in the statement. "Once the deal is finalized, ACT will be changing its entire business model."
"Until the company is better capitalized and the business model is completely adjusted to the current mortgage banking environment, we are not accepting applications," he added.
Servicing revenue is sustaining the company for the moment, according to the statement.
ACT notified its 100-plus employees of the temporary suspension two days before it was implemented. Remaining staff consists of 10 management-level employees, the executive said.
All loans that were approved have been funded, he added. Due to negotiations, he declined to disclose ACT's level of mortgage production.
As of Wednesday, ACT's site still said it accepted business in 46 states.
Among its products were agency jumbo and interest-only loans, and option adjustable-rate mortgage first and second lien products, according to the site. Its Alt-A first lien product matrix showed a stated verified and no ratio single-family loan amount of up to $2 million on a minimum credit score of 660 and 70 percent loan-to-value with a maximum combined LTV of 80 percent.