Another mortgage company took a huge hit this week, laying off nearly 2,000 employees and halting new business and fundings amidst the continuing downward spiral that is the housing market in the United States.
In the latest sign that things are far from getting better, one of the larger subprime lenders in the United States all but shuts its doors, citing poor market conditions, rising mortgage rates, and razor-thin margins.
The odd thing is that Mortgage Lenders Network actually had a strong year in 2006, making $3.31 billion of subprime loans in the third quarter, tripling from a year earlier and outpacing the industry which fell 9% in that time.
If you visit their website you’ll find that the company is no longer accepting any new applications via its wholesale channel, and are currently exploring strategic alternatives for the business in general.
While they say the mortgage layoffs are temporary, and that they’re “exploring” alternatives, it’s clearly just another sign that the mortgage industry is retreating further, and is likely to continue its downward cycle throughout much of 2007.
The company does plan to hang on to its loan servicing division and plans to build new headquarters in Wallingford, CT are yet to be scrapped.