Sherman Oaks, CA-based mortgage lender Metrocities Mortgage/Prospect Mortgage announced today it is exiting wholesale lending effective immediately.
According to a memo sent to mortgage brokers and business partners, the company will accept rate locks until the end of business today, and will work to close out its existing locked pipeline “as smoothly as possible.”
The company cited “current market conditions” as the reason for halting the business channel, following in the footsteps of many other now defunct lenders in the wholesale space.
It’s unclear if and how many layoffs will result from the closure.
Metrocities, primarily a retail shop, launched a wholesale lending unit in the early summer of 2007 after being acquired by Prospect Mortgage/Sterling Capital Partners.
The move came just days after Metrocities Mortgage shut down its wholesale unit No Red Tape Mortgage.
It’s still unclear why the company decided to launch another wholesale lending business after the failure of No Red Tape, considering the severe market climate at the time.
Metrocities Mortgage became a part of Prospect Mortgage Company, LLC, a Sterling Capital Partners portfolio company, in June 2007.
Back in late July, Prospect Mortgage announced it would acquire 80 retail Indymac offices and about 750 former employees.