The warehouse lending subsidiary of NovaStar Financial Inc. is getting out of the business.
WarehouseUSA Capital Corp. has stopped taking new applications for mortgage warehouse lines-of-credit, according to a notice posted on their Web site. Existing clients are being notified their lines will be closed according to their agreements with the Roswell, Ga., company.
A NovaStar spokesman did not immediately respond to MortgageDaily.com's request for a comment.
"All new funding activity by WarehouseUSA under existing warehouse lending lines is expected to be concluded on or about April 27, 2007," the statement said.
The lender, which was reportedly founded in 2003 as NovaStar Capital Inc., said it financed up to 100 percent of Alt-A and nonprime mortgages. Its programs included USA Direct, USA Express and USA Pro.
"The closure of the warehouse lending business will not impact direct mortgage loan funding by, or any other business of, any NovaStar entity," according to the statement.