Ownit Mortgage Solutions goes out of business

California-based company was 11th-largest subprime lender

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.