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The Mortgage Graveyard
Failed, closed and a c q u i r e d mortgage-related entities.

Mortgage Closures Include Wholesale, Correspondent

Recent mortgage-related businesses to close, fail

Aug. 8, 2016

By SAM GARCIA Mortgage Daily

portrait of Sam Garcia

A correspondent investor, wholesale lender and bank were among recent mortgage-related entities to meet their end. A failed credit union is back, though.

Back in May, the Pennsylvania Department of Banking and Securities seized and shut down First CornerStone Bank in King of Prussia, Pennsylvania.

As of March 31 of this year, the failed financial institution had $103 million in total assets -- which were not much more than its total deposits of $101 million.

First CornerStone was handed over to the Federal Deposit Insurance Corp. as receiver, which sold all of its assets and deposits to First-Citizens Bank & Trust Co.

Losses to the FDIC's Deposit Insurance Fund are expected to reach $11 million.

It was the third bank failure this year.

The National Credit Union Administration reported in June that control of Texans Credit Union has been returned to members of the Richardson, Texas-based financial institution. The $1.5 billion credit union was placed into conservatorship in April 2011.

"This is a real success story, and much of the credit goes to the hard work of Texans' leadership team, credit union staff and its members," NCUA Board Chairman Rick Metsger said in the statement. "Working collaboratively with the agency, Texans' leadership and staff restored their credit union's financial health, revamped operations and provided critical services to members. As a result, the credit union is now on a sound foundation."

BOK Financial Corp. -- which is the bank-holding company for several financial institutions including the Bank of Oklahoma -- issued a statement indicating that it is closing its correspondent lending channel.

Margin pressure due to growing competition and an extended period of low rates led to the decision.

"The decision comes following a thorough evaluation of the company's mortgage channels in light of the extended low interest rate environment," the statement said. "The company will focus investments moving forward on its retail and online consumer direct channels."

BOK launched its correspondent lending unit in 2011. More than 180 bank and credit union client relationships were established through the division.

BOK claims that the correspondent business ranked among the top 25 mortgage investors in the country.

Around 35 employees are impacted from the decision, though they will will be given priority consideration for mortgage job openings and other positions throughout the organization.

That represents around 5 percent of the mortgage workforce -- putting mortgage staffing at roughly 700 employees.

"We've seen tremendous year-over-year growth in our online consumer direct mortgage company, HomeDirect Mortgage, since it launched in 2013. HomeDirect allows us to serve clients nationwide who are increasingly embracing online origination channels," BOK Financial Mortgage President Glenn Brunker said in the statement. "This move will allow us to invest more resources in our online origination business, as well as continue to grow our traditional retail business which is on the ground in the markets we serve."

The Tulsa, Oklahoma-based organization noted that the exit will be complete by the end of this year.

The wholesale division of New American Funding has been abandoned, Rob Chrisman reported last month. Management of the division, which represented less than 10 percent of the Tustin, California-based firm's overall originations, reportedly moved to another company.

Mortgage Daily has tracked the demise of eight non-bank mortgage firms so far this year, bringing the total 2016 mortgage-related count -- including banks and credit unions -- to 24.

Sam Garcia founded Mortgage Daily in 1998 and became its full-time publisher in 2000. Prior to his news career he worked in mortgage lending for two decades.

[email protected]

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