Mortgage Industry Insider – Subprime Meltdown from MortgageDaily.com
DALLAS, December 11 /PRNewswire/ While it may not be the first time the subprime sector has been devastated, the current disintegration is unfolding with an ugly intensity, according to coverage from MortgageDaily.com, the dominant source of online news for the mortgage industry.
Stung by inverted yield curves and dwindling originations during the past year, nonprime mortgage bankers are consolidating or closing shop altogether.
The ferocity of subprime consolidation has not been this strong since 1998, when a bond crisis sparked by Russian defaults and stormy Asian financial markets dried up interest in high-risk bonds such as those backed by subprime mortgages.
Among the latest fatalities was Ownit Mortgage Solutions, which last week notified its roughly 11,500 mortgage brokers that it would close on December 6, 2006.
Ownit attributed the failure to current market conditions, noting, “Change takes time, and we are saddened that the current unfavorable conditions of the mortgage industry did not afford us sufficient time to see our mission through.” (https://www.mortgagedaily.com/OwnitClosure120606.asp)
Sebring Capital Partners LP recently ceased operations, according to the company’s Web site. Sebring was initially capitalized with the help of former Dallas Cowboy quarterback Roger Staubach.
Sebring, a subprime wholesaler, reportedly employed 325 people. (https://www.mortgagedaily.com/SebringClosure120506.asp)
A sale of Ameriquest Mortgage Co., for which bids reportedly are being sought, could happen “shortly,” according to one industry insider.
“I would expect it to happen maybe before the year is out,” a vice president for Fox-Pitt Kelton told MortgageDaily.com. “They have received initial bids.” (https://www.mortgagedaily.com/AmeriquestSale120606.asp)
And investment banks are stepping in to sift through the rubble.
Bear Stearns Residential Mortgage Corp. is acquiring troubled subprime lender ECC Capital Corp. That sale is expected to close during the first quarter of 2007. (https://www.mortgagedaily.com/EccSale120606.asp)
Morgan Stanley closed on its acquisition of Saxon Capital Inc. That merger will result in 170 layoffs, a Morgan Stanley spokesman told MortgageDaily.com. (https://www.mortgagedaily.com/LayoffsSaxon120606.asp)
Other recent nonprime acquisitions by investment banks include Merrill Lynch deal to acquire First Franklin, Fortress Investment Group’s acquisition of Centex Home Equity and Deutsche Bank’s purchase of MortgageIT Holdings Inc.
Read complete subprime mortgage news at https://www.mortgagedaily.com/Subprime.asp
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Source:Â MortgageDaily.com
