Paul Financial Suspends Loan Origination

November 26, 2007 Comments Off

Wholesale mortgage lender Paul Financial, LLC has halted new loan submissions effective today, according to an announcement posted on their website.

The announcement states: “After much deliberation, Paul Financial has decided to temporarily suspend the acceptance of new loan submissions effective Monday, November 26, 2007.”

“All loans that are currently in process will be evaluated based on current underwriting guidelines, and completed as appropriate.”

The San Rafael, California-based lender specialized in Alt-A loans, including ultra-exotic loans such as the .25% option-arm, which carried a minimum mortgage payment that was lower than most monthly car leases.

It is unclear if the company will continue to operate, although the intention to carry on was implied in the announcement on their website.

“Paul Financial continues to believe rational thinking will return to the secondary market, however, and the Company intends to continue to work on sourcing alternate resources to bring back its innovative loan programs in the near future.”

Like many other wholesale mortgage lenders, Paul Financial likely had trouble selling loans on the secondary market, leading to a substantial decline in loan origination volume.

A few weeks ago the lender cut 57 jobs, and it is believed that another 50 employees lost their jobs as a result of today’s announcement.

Paul Financial was founded in 2003 by Peter T. Paul, the former owner of and CEO of Headlands Mortgage Co., which later merged with the now defunct Greenpoint Mortgage.

See the latest list of mortgage layoffs.

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