Following Monday's disclosure of its new parent's potential insolvency, Fieldstone Mortgage Co. has stopped accepting new applications.
MGIC Investment Corp. and Radian Group Inc. each announced Monday that their $1 billion collective investment in Credit-Based Asset Servicing and Securitization LLC -- Fieldstone's parent -- may be completely wiped out.
C-BASS acknowledged its potential insolvency on Tuesday, indicating it faces "an unprecedented amount of margin calls from" its lenders.
On Wednesday, Fieldstone, based in Columbia, Md., halted -- at least temporarily -- new business.
"We are currently facing some liquidity challenges stemming from the severe state of disruption in the credit markets," C-BASS spokeswoman Lisa Brzezinski told MortgageDaily.com in an e-mailed message. "These challenges have naturally required us to carefully evaluate current cash allocations.
"As a result of this evaluation, Fieldstone Mortgage Company has temporarily stopped accepting new loan applications from consumers and mortgage brokers."
C-BASS only completed its acquisition of Fieldstone on July 17.
"Fieldstone will continue to fund loans on a limited basis, especially in cases where they can help existing borrowers refinance their adjustable rate mortgages that are about to reset," Brzezinski added. "Fieldstone will also work with borrowers who desire to transfer their pending applications to another broker or lender."
C-BASS Facing Liquidity Crisis
A rapid deterioration this month in the credit markets have investors in Credit-Based Asset Servicing and Securitization LLC warning that they could lose more than $1 billion invested in the company. The cash crisis has emerged just as the company completed the acquisition of another ailing subprime company.