Thursday, February 15, 2007

Lenders Direct Capital Corp. Closes its Wholesale Lending Division

Lenders Direct Capital Corp., a nonprime lender based in Lake Forest, Calif. has closed its wholesale lending division and laid off 150 people. They stopped accepting applications from brokers on February 9. Chief Executive Officer, Michael McQuiggan said the lack of "investor demand in the subprime industry is such that we felt it was prudent to do it at this time." Adding, "the liquidity of subprime loans seems to be in a state of flux." Wholesale loans had accounted for 80 percent of the company's production and only about $20 million of its total volum of $100 million was from retail operations. The retail division which currently employs 40 to 50 people will remain in business. Some of the programs high lighted on their website included the Lender Premium Blend which indicated an 80/20 full doc loan and required a 580 middle score and 2 years written verification of employment. The program was also available as a stated doc loan with a 620 middle score. Other programs included the Lender's Choice which allowed 24 months personal bank statements to 95 percent LTV and a 125% CLTV equity stated second program.