Two more US firms quit mortgage lending business amidst a deepening of the
subprime mortgage lending crisis.
Mortgage Holdings Inc said it would quit most lending and cancel its dividend,
while Accredited Home Lenders Holding Co posted a big quarterly loss and said
its survival remained in doubt.
developments came a day after another struggling lender, NovaStar Financial Inc,
gave up its real estate investment trust status sooner than expected because it
could not pay a $157 million dividend to keep it.
Impac said it has fired 144 workers and will stop making "Alt-A" home
loans, its main business, citing "market disruptions and illiquidity."
company also said it is quitting warehouse and commercial lending, and will keep
only a small number of offices that make loans eligible for purchase by Fannie
Mae and Freddie Mac. It doesn''t expect to pay its 10 cents per share quarterly
dividend at least through year-end.
also said it has sold $900 million of mortgages since August 1, but has found
it "extremely difficult" to sell more, and is working with its own lenders
to find ways to do so.
Diego-based Accredited, which makes subprime loans to people with weaker credit,
posted a loss of $260.2 million, or $10.29 per share, for the quarter ended March
31, according to a delayed report filed with securities regulators. That compared
with a profit of $35.8 million, or $1.61 per share, a year earlier.
said results suffered from a large loss from the sale of mortgage loans.
also said it expects to need further amendments to or waivers of covenants in
its credit facilities in 2007. "We cannot assure you that we will continue
to operate as a going concern," it said in its quarterly report.
this month, Accredited closed much of its lending operations, eliminating 1,600
of 2,600 jobs. It had made $15.8 billion of home loans last year.
is suing to force private equity firm Lone Star Funds to complete a $15.10 per
share takeover announced in June.