The net branch operation run by the former chairman of the Mortgage Bankers Association has run out of money and closed down.

Central Pacific Mortgage notified its employees it has run out of capital and will be unable to meet the Feb. 28 payroll, according to a copy of a Feb. 26 letter reviewed by MortgageDaily.com.

"I must inform you that Central Pacific will cease operating as of the close of business today," read the letter sent Monday by Central Pacific President and CEO John Courson. "The inability to fund loans due to the lack of available warehouse lines of credit and the lack of cash and capital make it impossible to continue to operate. Despite our signed agreement with The Mortgage Store we are unable to sustain our operations until a closing of both the wholesale and retail production channels can be achieved."

Courson, who has 40 years' experience in mortgage banking, was elected chairman of MBA in 2003, according to the Folsom, Calif.-based company's Web site. The company said it has been around 28 years.

"There are no words to express my sorrow," Courson added. "I fully understand the hardships and difficulties this action will create for everyone."

Central Pacific did not immediately respond to MortgageDaily.com's request for a statement.