A New Mexico-based bank has shut down its hard-money lending unit.
Charter Bank closed its specialty lending group on Friday, according to a statement e-mailed to mortgage brokers.
The bank, based in Albuquerque and founded in 1976, said no loans would be funded after Friday.
“Charter Bank remains a very healthy financial institution,” the message said. “But the lack of a secondary market for this product and new regulatory guidance has caused us to make this decision at this time.”
The specialty lending unit, launched in January 2007, said it was approved to lend in 10 states including California, Florida and Texas. The operation employed less than a dozen people.
It offered residential hard-money programs with up to 60 percent loan-to-value that allowed borrowers to utilize funds for foreclosure and bankruptcy bailouts. Stated-income loans with no minimum credit score were available up to 50 percent LTV.
“Our typical borrower is either in Chapter 13, is facing foreclosure or has recently had a foreclosure,” Charter stated on its Web site. “We have designed our products to permit borrowers who have equity in their property to be able to get out of bankruptcy, save a home from foreclosure, purchase a home having just faced foreclosure, or refinance their existing mortgage to clean up their credit.”
