Secondary markets continue to weigh on mortgage lenders

Early payment defaults and margin calls by creditors have forced Aegis Mortgage Corp. to file for Chapter 11 bankruptcy protection, a week after laying off more than half its work force.

Aegis said in a bankruptcy court filing Monday that it owed more than $600 million to creditors, including an affiliate of Cerberus Capital Management that holds an 80.9 percent equity stake in the firm, Reuters reported.

Houston-based Aegis laid off 782 of 1,305 employees on Aug. 7 but is continuing to service loans, Reuters said.

In other news, subprime lender Accredited Home Lenders said it filed a lawsuit against Lone Star Funds after Lone Star allegedly backed out of a $400 million deal to acquire the troubled San Diego-based lender.

Accredited originated $1.7 billion in mortgage loans during the second quarter, down 59 percent from the same time last year, the lender said in a Securities and Exchange Commission filing, and expects losses for the quarter will total $40 million to $60 million.

The estimated loss for the quarter does not include an unspecified decline in value on $1 billion in loans Accredited held for sale at the end of June.

Accredited said it was unable to close any asset-backed, on-balance-sheet securitizations during the second quarter, compared with $1.1 billion in securitizations in the second quarter of 2006.

Accredited reported selling $1.2 billion in mortgage loans for cash during the quarter at a weighted average net price of 101.2 percent. During the same quarter of 2006, the company sold $3.7 billion in mortgage loans at a weighted average net price of 102 percent.

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