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Accredited Home Lenders, Home Funds Direct - Non-Prime Lender - Wholesale, Retail

2008-06-04

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stories: cnn.com

Update - 2007-10-12: Lone Star Funds V, a private equity investment firm, acquired Accredited on 2007-10-12.

Update, Sept. 14: We have added Home Funds Direct to this implosion, as it is the retail division of Accredited. The subsidiary's web site gives simply the following notice now:

Effective August 22, 2007 Home Funds Direct is no longer able to accept applications for new mortgage loans. If you are a borrower with an application in process, please contact the branch that is handling your application. We have a core support team on hand to answer your questions.

We apologize for the inconvenience.

Original entry - 2008-06-04: We have been watching Accredited Home Lenders for months. This morning, we have recieved word that they have ceased accepting new loan submissions. A formal announcement has been emailed out:

Valued Broker,

As you are aware, the non-prime mortgage industry is facing a severe liquidity crisis that's affected even the largest players in our space. Currently, the secondary market for loans has shut down for all but conforming loans and the price for non-prime and Alt-A loans is well below par. Regrettably, there is universal agreement that the market will remain irrational for the foreseeable future.

At Accredited, we've worked hard over these past few months to continue to fund loans. Unfortunately, the market head-winds have become too strong, so we are consolidating six of our loan fulfillment centers, while retaining five centers to cover all time zones in the U.S.  These changes will cut the overall staff by more than half. Our goal is to come out of this storm and deliver what you've come to expect from us: superior service and a broad menu of products for qualified borrowers.

Here's what this means to you:

  • Effective August 22, 2007, we will no longer be accepting new loan submissions for approval.
  • We will honor all outstanding funding commitments, and expect that the last funding commitments will expire in early September.

If you have any questions, please contact the division office that has processed your business in the past. For now, offices remain open with a core support team on hand to provide assistance.

Thank you for your support during these turbulent times. We will keep you updated on events here at Accredited and genuinely hope that we can do business together again in the not-too-distant future.

Sincerely,

Joseph J. Lydon
President and Chief Operating Officer
Accredited Home Lenders

A CNN article notes that Accredited will be cutting 1,600 jobs.

Original Ailing/Watch posting:

story story story

In the same kind of liquidity crunch that has taken out numerous other non-prime lenders. Margin calls have hit it for $190 mln in 2007. The company is now exploring firesale-type options, workforce reductions, and just "the kindness of strangers" in general. Stay tuned.

The stock has tanked from about $20 to $4 in March.

Update March 16th: Accredited has managed a fire sale selling off loans at a discount to buy some time to consider "strategic options." By strategy, they mean scrambling to find a someone to take their business over.


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Comments:

lottopol at 16:36 2008-06-05 said:
It appears that rather than "imploding" Accredited is consolodating its operations with those of Bear Stearns mortgage operations that Lone Star (acrreditted's parent) boght from Chase on May 30 Permalink

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Important: This company is on our list of lending operations that have "imploded". However, please note that "imploded" is a somewhat subjective and does not necessarily mean operations are ceased permanently: it can mean bankruptcy filing, temporary but open-ended halting of major operations, or "firesale" acquisition. All information here is provisional, and may contain inaccuracies (especially newer information). If you are planning on doing business with this company or any other one listed on this site, you should inquire with them directly on whether they can still meet your needs. Many are still operating in some capacity.