Accredited Home Shuts Down Retail Lending Business

August 22, 2007 No Comments »

Accredited Home Lenders announced this morning that it is shutting down its retail lending business and will suspend the origination of loans through its wholesale channel.

The mortgage lender said it halted all loan origination amid worsening market conditions, but that it vows to resume wholesale origination once market conditions improve.

Accredited will shut down 65 branches and cut the workforce from 2,600 to 1,000, while closing five of its ten brokered loan offices.

Accredited will cut 180 of the 400 jobs at its headquarters in San Diego, 480 job at its retail lending unit, and 490 at its wholesale operations.

The company also plans to slim down its Inzura unit, which provides appraisal, title-insurance and other settlement services.

Accredited Home said it will honor existing loan commitments, and like many other closed lenders, will likely continue to process locked loans until funded.

A statement from the COO and President, Joseph Lydon, said the company would no longer accept applications come August 22, 2007, but would honor existing funding commitments.

The news came just one day after the company announced the sale of $1 billion in assets to keep the company afloat.

It is uncertain how this news will affect the ongoing merger turned lawsuit with Lone Star Funds, who are currently attempting to back out of the acquisition.

Shares of Accredited Home fell 4.4% to $6.24 in midday trading.

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