First Horizon National Corp. has exited the subprime wholesale lending market.
As of Wednesday, First Horizon Home Loans discontinued accepting nonprime loan applications from brokers, Terry Renoux, president of consumer lending, told MortgageDaily.com.
"We took the strategic decision to stop offering this product because of general issues in the subprime marketplace, but specifically because margins in the nonprime wholesale business have become so thin we have been unable to originate those loans profitably," Renoux said.
"Our intention is to work through the pipeline and fund as many loans as possible as we transition out of wholesale nonprime," he added.
As a result, approximately 60 employees in Kansas City, Kan., received notices that their jobs would be eliminated by May, the spokesman said.
Wholesale nonprime originations had steadily declined to account for about 1 percent of total production from about 2 percent in 2006, the spokesman said, adding that overall nonprime originations were about 5 percent of last year's volume, which First Horizon reported at $27.1 billion.
The spokesman noted that the Tennessee-based company continues to do retail nonprime loans and is solid in offering prime, first conforming and home equity lending for brokers.