According to a memo sent out to Flagstar Bank wholesale lending customers, effective tomorrow, the mortgage lender will be temporarily suspending its “Jumbo Fixed and ARM Program”.
Effective immediately, the Michigan-based bank said no new registrations would be permitted, and that all loans submitted under the program must be locked by 12:00 pm EST, tomorrow.
Loans requiring a lock extension (max 15 days) must be extended by noon tomorrow as well.
The loan program in question previously permitted loan amounts up to $2 million (super jumbo).
The company did not provide a reason for the suspension of the loan program or an estimate as to when the product would return.
Shares of Flagstar fell 36 cents, or 5.91%, to $5.73 in trading Thursday on Wall Street, slightly above their 52-week low of $5.40.
Update: It is believed that Aurora Loan Services, who shut down their correspondent line yesterday, was the investor for Flagstar’s jumbo loan program, causing Flagstar to put it on hold until finding an alternative.