US national mortgage lender First Magnus Financial Corp, which has announced the suspension of its operations, says it has shut down all its over 300 offices and laid-off 99 per cent of its nearly 6,000 employees nationwide.
Even though First Mangus was not engaged in selling "sub-prime" mortgages that have sparked the crisis in recent months, it says that it was caught in the credit liquidity crunch now causing a meltdown in the mortgage industry.
First Magnus, which says it is among the largest privately held mortgage banking operations in the country, funded more than $30 billion in loans in 2006.
The Tucson-based company that originated home loans and then sold bundled loans into the secondary loan market says it expects to retain only about 60 of employees, saying it may have to resort to a bankruptcy filing.
First Magnus had announced on Thursday, that it had stopped originating new loans and was suspending operations. The company's retail outlets include Great Southwest Mortgage and Charter Funding, recently renamed First Magnus Home Loans.