The parent company of Harbourton Mortgage Investment Corp. says the Virginia-based lender has closed its doors.
HMIC was forced to stop funding new loans and “initiate a process to wind down its operations” on Dec. 20, after investors who had purchased loans from the company demanded the lender buy them back, according to a statement issued by parent company Harbourton Capital Group Inc.
When Harbourton Capital reported its third-quarter results on Dec. 8, the company said HMIC recorded a provision for third-quarter losses of $954,000 “in response to a significant increase in the loans sold to investors that experienced an early payment default, under which HMIC may have liability to the investor.”
HMIC had losses of $1.19 million for the quarter ending Sept. 30, including $260,000 in one-time expenses related to an Aug. 31 acquisition of Molton Allen Williams Mortgage Company LLC.
Harbourton Capital President and Chief Executive Officer J. Kenneth McLendon said at the time that a decline in real estate activity and market values “significantly impacted” the company.
In its latest statement Wednesday, Harbourton Capital said the company would likely write off its full investment in HMIC.
“Management hopes the cessation of the continuing losses from HMIC will enable HCG and its mezzanine lending subsidiary, Harbourton Financial Corporation, which is not impacted by HMIC’s closure, to stabilize their financial operations in 2007,” the company said.