Spectrum Financial Group Files Bankruptcy

August 31, 2007 No Comments »

Spectrum Financial Group Inc. filed for Chapter 11 bankruptcy protection on Tuesday.

The beleaguered subprime lender submitted its Chapter 11 petition to the U.S. Bankruptcy Court in Phoenix, Arizona listing assets and debts each under $100 million.

Spectrum Financial Group specialized in residential Alt-A and subprime loans through both retail and wholesale channels, funding roughly $80 million a month at its prime.

The company funded $1.8 billion in wholesale and retail loan volume in 2005, employing 280 people at branches in Arizona and Nevada.

In recent months the mortgage lender struggled to sell loans on the unforgiving secondary market, driving production down to less than $5 million a month.

The bankruptcy news follows a halt in production on its wholesale side roughly two weeks ago.

Spectrum Financial Group’s bankruptcy case will be handled by local Phoenix law firm Allen, Sala & Bayne and the company’s creditors have scheduled a meeting on Oct. 16th.

It is unknown how many employees have been laid off as a result, or how many have left voluntarily.

Spectrum Financial Group has three offices in Arizona, and an office in Las Vegas, Nevada.

There was no notice of the bankruptcy filing on the company’s website.

See more bankrupt lenders.

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