A California-based nonprime lender has closed its wholesale operations and laid off 150 people.
Lenders Direct Capital Corp. stopped taking applications from brokers as of today, Michael McQuiggan, chief executive officer, told MortgageDaily.com.
The lack of "investor demand in subprime industry is such that we felt it was prudent to do it a this time," McQuiggan said. "The liquidity of subprime loans seems to be in a state of flux."
Wholesale loans account for about 80 percent of the Lake Forest, Calif.-based company's production, he said. Only about $20 million of the total volume of $100 million was from retail operations, which still remain as well as servicing and other functions.
The retail channel currently employs about 40 to 50 workers, but about 150 employees were laid off as a result of withdrawing from the wholesale market, according to McQuiggan.
One program that was touted on the Web site was the Lenders Premium Blend, which indicated 80/20 full documentation loans required a 580 middle score and two years' written verifications of employment. The program was available as a stated documentation loan with a 620 middle score.
Another program, Lenders Choice, allowed 24 months personal bank statements to 95 percent loan-to-value, according to the Web site.
A 125 percent combined LTV equity second program was also advertised.