This news is somewhat delayed, but it doesn’t seem to be anywhere on the web, in the news, or on any blog. Not quite sure how it went under the radar so long.
In an announcement directly from the Lexington Lending website dated August 13, 2007, the company said it would no longer be taking applications due to the current mortgage mess.
The mortgage lender went on to mention that the halt in operations could be temporary, and that once market conditions improved, new products would be released.
It is unknown what the status of the company is at this point, but it’s doubtful that things have improved given the circumstances.
I’ve been told by sources that Lexington Lending laid off roughly 300 employees as a result of the news, though it is unknown how many employees have been retained.
That same source told me that the company does (or did) about $100 million in monthly funding, which is pretty substantial in the current lending environment.
A month earlier, Lexington Lending released a statement saying it would cease lending in Indiana, Michigan, and North Carolina because of large amounts of mortgage fraud related to stated income loans and widespread property devaluation.
It’s likely the company suffered heavy losses related to lending in those states, which may have led to the decision to cut off wholesale completely.
Based on ratesheets I found on their website, it looks like they offered quite a few high-risk loans, including “100% option-arm”, “No Doc loans from 580 FICO”, “0% Option Arms (3 Months NO Payment)”, and “No Doc Loans to 3.5 MIL”.
Scary part is those are the programs in their Alt-A section. I won’t even get into the subprime loans.
Lexington Lending is headquartered in Orange County, California and also has an office in Las Vegas, Nevada.
Take a look at the current list of closed mortgage companies, layoffs, mergers, and rumors.