Choice Capital Funding - Wholesale, Subprime, Alt A

We originally got word of troubles at Alpharetta, Georgia-based Choice Capital Funding (choicecap.com [website down])on April 16^th:

Employees arrived today with a letter on their desks saying Choice Capital Funding is no longer in business. Choice Capital Funding was located in Alpharetta GA and employed approx 40 people.

...

Scott Marshall, the owner, has let the sales people go and most [operations] staff. He has kept ... 5 people on to help clean up. Choice Capital Funding only hired sales people with 5+ years underwriting experence. The "Wholesale Manager" was the brokers sole contact person, they would make the sales calls, underwrite their files that would come in the door and clear all the conditions (there was one 2nd signer to review the work, once after it was u/w and a 2nd time before closing). This kept the staff at a lower limited approx 10 in operations (3 other operations people were let go in Feb), since they didn't need u/w or processor. They always tried to keep 20+ Wholesale Managers.

...

I heard that RFC called a bunch of notes due because of early default and that's a big reason this is happening. Scott doesn't have any liquidity to buy back loans (real shocker there) and RFC wasn't happy about that. I don't know, it's an unsubstantiated at this point.

Regarding the size of Choice Cap's operations, we got word that in 2006 they were closing between $15 and 20 million a month in loans. Peak loan volume was about 1,800 loans per year. Though Choice Capital was borderline to include on our list, due to both indications that they were significantly large enough in the Southeast as well as the volume of reports on their closure, we have decided to include them on our list of "imploded" companies.

We received a recent notice that their website was down and that their answering service was providing a "strange reply". Indeed, calls to 770-569-8140 returned "all circuits busy" messages and 800-338-0037 appears disconnected.

While operating, Choice Capital Funding prided itself on expediency. Per their website (as archived):

Choice Capital Funding is a wholesale Mortgage Lender currently servicing 27 states throughout the country. We are the only Mortgage Lender to provide "Same Day Approvals" on every loan file submitted, we guarantee it!

Go here for an archived version of their "About" page.