Hopeful Signs in Subprime Struggle – Mortgage Industry Insider from MortgageDaily.com
DALLAS, March 19 /PRNewswire/ As subprime wholesalers continued to exit the market, strategic moves taken by one company sent its shares soaring, according to coverage from https://www.mortgagedaily.com — the dominant source of online news for the mortgage industry.
Investaid Corp. ceased taking applications Thursday, the company’s president told MortgageDaily.com. The exit resulted from instability in the subprime mortgage market.
“The conditions in the market continue to collapse,” Investaid said in an e-mail statement to workers. (https://www.mortgagedaily.com/ClosureInvestaid031607.asp)
As of March 14, Master Financial Inc. suspended its wholesale lending operation, according to a notice posted on its Web site.
“Our industry continues to experience rapid change and instability due to the lack of liquidity in the nonprime market,” said a message addressed to the company’s broker customers. “We have to effectively cease our operations and reorganize our business to accommodate the new demands of the secondary market.” (https://www.mortgagedaily.com/ClosureMasterWholesale031607.asp)
Meanwhile, Option One Mortgage Corp. did not meet the minimum $1 million quarterly net income for four consecutive quarters as required in covenants of its committed warehouse facilities, according to an SEC filing last week from parent H&RÂ Block. But it has obtained waivers through April 27 from each of the creditors.
“We anticipate [Option One] will not meet this financial covenant at April 30, 2007,” the filing said. “However, we believe we will be able to obtain waivers for that date from a sufficient number of warehouse providers.” (https://www.mortgagedaily.com/OptionOneProduction031407.asp)
Accredited Home Lenders Holding Co. announced Friday it would sell most of its originations held for sale that are funded by its warehouse and repurchase credit facilities, asset-backed commercial paper facility and equity.
“The $2.7 billion of loans held for sale will be sold at a substantial discount in order to alleviate recent pressures from margin calls,” the statement said.
The deal includes a $40 million holdback reserve for early-payment defaults with no further liability, Accredited said.
Shares of accredited traded more than $2 per share higher following the announcement. (https://www.mortgagedaily.com/AccreditedLoanSale031607.asp)
Complete nonprime coverage at:Â https://www.mortgagedaily.com/subprime.asp
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