Industry News

Subprime lenders hit Wall Street funding wall

MLN stops funding loans; Ownit Mortgage in bankruptcy

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Mortgage Lenders Network USA Inc. has stopped funding loans and placed about 80 percent of the employees in its wholesale lending operation on furlough, but will continue to service its $17.8 billion loan portfolio, the company said in response to media reports that it was closing. MLN's servicing platform remains strong, the company said in a statement, but "the economics of the wholesale mortgage market have deteriorated dramatically over the past two months industrywide." MLN has temporarily discontinued wholesale originations and is involved with "several Wall Street firms" about its wholesale mortgage origination platform, the company said. "Until we see credit quality and margins return to acceptable levels we have determined that MLN needs to pause from wholesale broker originations," said MLN President and Chief Executive Officer Mitchell Heffernan. In a Dec. 8 press release, MLN said it employed 1,800 workers, including 950 in Connecticut and at regional offices in Atlanta,...