Three Wholesale Lenders Shut The Door on Business

Both First Horizon Home Loans and First Source Funding Group Inc. have shut down their nonprime wholesale lending channels as Homefield Financial announced the closing of its Alt-A wholesale lending division.Irving, Texas-based First Horizon will no longer be accepting applications from mortgage brokers for nonprime loans.The decision to exit the nonprime business comes as many wholesale lenders have seen profit margins evaporate, coupled with dwindling bids from Wall Street firms distancing themselves from such loan pools.About 60 positions will be eliminated as a result of the strategy, which will not affect their conforming and home equity lending to brokers.Irvine, California-based First Source announced that it has ended mortgage banking operations, effective immediately.The company said it hopes to accommodate existing transactions by making “every effort” to fund locked loans with loan documents that were drawn and released by March 8, 2007.On March 9, First Source announced that it stopped accepting new loan applications, as well as requests for rate locks or loan documents.Also based in Irvine, Homefield Financial has announced that it is shutting down its Alt-A wholesale lending division."It is with great regret that Homefield announces that the Homefield wholesale division will no longer be accepting broker applications for consideration of a broker/lender relationship," said Homefield on its website.Homefield was established in 1998 and went on to make the Inc. 500 for both 2004 and 2005.Last August, the company reported $2.5 billion in annual originations and announced an expansion into Las Colinas, Texas to create 200 new positions.