FNBA Shuts Down Wholesale and Correspondent Divisions

August 21, 2007 No Comments »

According to an announcement posted on the FNBA website, First National Bank of Arizona has their suspended wholesale and correspondent originations to focus on the retail arm of the business.

The announcement from the FNBA Secondary Department said the halt in production is effective as of 10am this morning, August 21, 2007.

It is believed that a large number of wholesale Account Executives and operations staff were laid off as a result of the divisions being suspended, but that some will remain on board to wind down operations.

Rumors had been circulating over the past few weeks that FNBA was in trouble, as product offerings were limited, and new agency products weren’t selling well.

FNBA originated Alt-A loans, but in recent months tried their hand at agency products that Fannie and Freddie could buy, failing to mark any substantial turnaround.

In regard to locks, they will be honored until 1pm today, but rate lock extensions will not be accepted after today.

It is unclear at this time whether loans that were not previously locked will continue to be processed and ultimately fund.

This is the latest mortgage company to shut down one or more components of its business as it grapples with the ongoing mortgage crisis.

Look for more lenders to shut down riskier aspects of their business that include working with third-party mortgage brokers and loan officers.

In an earlier post, I noted that Countrywide will shut down their wholesale and correspondent divisions to focus on their retail business.

Look for that story to hit the newswire in coming weeks.

Update: FNBA announced 541 layoffs, 351 of which were laid off Tuesday, and another 190 by year-end.

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