Ownit Mortgage Solutions goes out of business

California-based company was 11th-largest subprime lender

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Ownit Mortgage Solutions Inc. has closed its doors, leaving more than 700 workers at 15 branch locations around the United States out of work.

The Agoura Hills, Calif.-based subprime lender, which originated $8.3 billion in loans last year, was unable to obtain funding to continue issuing loans, news reports said.

In a statement, the company said Merrill Lynch & Co., which owns 20 percent of Ownit, forced the closure by cutting off funding on Dec. 5, the Los Angeles Times reported. A Merrill Lynch spokesman told the Times and Bloomberg News that statement was misleading but declined to elaborate.

Ownit’s chief executive officer, William Dallas, co-founded First Franklin Financial Corp. in 1981 and bought Ownit with a group of investors in 2003, Bloomberg reported. The company originated $5.46 billion in loans in the first half of 2006, up 44 percent from 2005, according to the industry newsletter Nonprime News, Bloomberg reported. Those numbers made Ownit the 11th-largest subprime lender in the United States, news reports said.

Last week another subprime lender, Texas-based Sebring Capital Partners, unexpectedly closed its doors after a major investor reportedly stopped funding the company’s loans and it was unable to find a buyer.