Dallas-based Mortgagedaily.com reports mortgage failure at record pace

by PegNews wire

DALLAS — The mortgage sector is on pace to see a record number of failures this year as regulators seize banks at an accelerating rate, according to data tracked at the Mortgage Graveyard -- a journal of failed, ailing and acquired lenders. A lack of government loans programs and lost warehouse financing played a role in some of the closings.

From Jan. 1, through March 31, MortgageDaily.com reported 50 mortgage-related company closings. The annualized rate of first-quarter failures, 200, would be a big leap from 120 during 2008 and higher than 2007's 160 -- the most of any year since tracking began in 1998.

At 21, federally insured bank failures are on pace to exceed 80 this year -- about three times last year's level. First-quarter nonbank closures were 25, while four credit unions were shut down.

JPMorgan Chase & Co. closed its mortgage broker unit during January in a move the company's chairman and CEO said he regretted not making sooner.

On one recent Friday, the FDIC took control of three banks, while two corporate credit unions were placed in conservatorship.

Credit unions have also had to contend with the collapse of Central States Mortgage and CU National Mortgage -- two firms that provided mortgage services to credit unions.

Chase and National City Corp. both closed their warehouse lending operations. As mortgage bankers have found it increasingly difficult to finance loan originations, many have failed. Recent warehouse casualties include Home Loan Consultants Inc., Popular Mortgage Corp. and Residential Loan Centers of America Inc.

Founded in 1998, MortgageDaily.com is an online source of mortgage news for the mortgage industry.

Source: Mortgagedaily.com