Nationstar Mortgage, the subprime lending unit of Fortress Investment Group has halted all wholesale loan origination.
According to the lender’s website, the move was effective Friday, and likely the result of a deteriorating secondary market and lack of subprime loan origination.
It is unclear how many employees will lose their jobs as a result.
I had reported a week ago that the company had shut down many of its branches and was rumored to be working with just a skeleton crew.
I was also told that much of Champion Mortgage, their recent acquisition, was dissolved in recent weeks as the company continued to slim operations.
One source told me that only the Marlborough, MA office was still operational, and that the lender was banking on an increase in business which never came.
The hope was that the subprime lender would make the switch to government product backed by Fannie Mae, but that never materialized as planned.
According to Nationstar, approved loan applications will continue to be processed to fund, but no new applications will be accepted.
Fortress said its $10 billion loan servicing unit was unaffected by the production decision.
In July of 2006, Centex Home Equity became Nationstar Mortgage LLC after being sold by parent Centex Corporation to an affiliate of Fortress Investment Group LLC.
Nationstar Mortgage LLC, headquartered in Dallas, Texas, was one of the nation’s top subprime originators.
Nationstar said on March 1st that it was the eighth-largest US retail lender of subprime mortgages.
See the latest list of closed lenders, layoffs, and morgage-related mergers.