First National Bank of Arizona - All Mortgage Operations

Update - 2008-01-25: As described by the Arizona Republic, First National Bank of Arizona has now stopped all Retail Mortgage business:

"The private bank will retain its focus on small-business customers and begin brokering mortgage applications from customers to other lenders, Chief Administrative Officer Joel Gottesman said Thursday. The bank's California branches never offered retail mortgage services, but 12 branches in Nevada will join the 15 in Arizona halting the practice, he said of the "efficiency effort.""

Original Implode - 2007-08-21: We have received word that a conference call was held at 1 p.m. today announcing that First National Bank of Arizona has ceased their Wholesale and Correspondent lending operations effective today. Per an informant (And posted here):

Effective as of 1pm EDT (10am PDT) today, August 21, 2007, 1st National Bank of Arizona (FNBA) will focus on Retail originations and has suspended Wholesale and Correspondent originations.

Wholesale and Correspondent locks received prior to 1pm EDT (10am PDT) today, August 21, 2007 will be honored.

Requests for Edits or Extensions to locks after 1pm EDT (10am PDT) today, August 21, 2007 will not be accepted.

FNBA Secondary Department

We are trying to assess how many employees are affected by this decision. If you could provide any information regarding FNBA's peak loan volume, please let us know.

Update 1:34PM:

We have received the following memo sent out by FNBA regarding the closure:

Making decisions like the one we faced today is the most painful and difficult part of having a position of responsibility and leadership. I think that is especially true in a family business like ours where people and culture are so important to our success. That is why I hope everyone realizes that the preservation of the Bank is why we announced these dramatic changes.

I want you to understand that the continued magnitude of the movements in the market forced these changes upon us, and that there was nothing that could have been done by our leaders in Sales, Credit, Operations, Secondary Marketing, or anywhere else, to avoid being negatively impacted by the market. We could not anticipate the magnitude or duration of the shockwave that has decimated our industry.

Moving forward, we will focus on Retail originations and have suspended Wholesale and Correspondent originations. We will honor Wholesale and Correspondent locks received prior to this announcement. Some of you have been asked to help ensure the smooth transition for Wholesale and Correspondent loans in process and ramp down of branches. These activities are of critical importance. I thank you in advance for your focus and effort.

Every day for the past few months has been trying and emotionally draining. The actions we have taken are necessary to preserve our 1st National Banking business. While I am saddened by the announcement and its effect on impacted employees, I am confident that we will work together to provide a smooth transition for the borrowers and brokers for loans that are in process. I am confident we will work together to complete delivery of loans that have been closed to our investors. I am confident we will work together to support our Retail Mortgage division. I am also confident we will handle these difficult transitions with the same professional, focused demeanor that has been our trademark.

Thank you for your support of FNBA during this difficult time. I am proud to be associated with this team.

Original posting from Ailing/Watch:

FNBA is a privately-held bank based in Phoenix, Arizona, which has become a major national mortgage lending operation in recent years. Below is a timeline of information we have received from a key informant

2007-06-12:

Confirmation on the FNBA front, today 3 top AE's just resigned in the Southeast 2 out of Atlanta and one out of Ft Myers. I am hearing of about 7-8 more looking to jump within the next 2-3 weeks . In this atmosphere, you take away the stable guarantee base, even top producers get nervous.

2007-06-05:

Info on FNBA. They just changed the comp plan. The draws are no longer forgivable, meaning if you don't meet the draw, it carries over. Forcing people out.

2007-04-24:

Also, one of the midwest divisions, that cover Michigan , Kentucky and Indiana only funded 3mm as of close of business yesterday for the month of April. Not good. Remember I was telling you the old rust belt would feel this hardest - it has. This is Indianapolis, Louisville, Detroit, Evansville, et al.

[A source at] Deutsche Bank - Mortgage IT is telling me that the fears on CMA's are possibly being overstated, they are still getting 105 coupon on these loans for the time being. Hybrids though are crap as are the NoDoc loans - maybe they get a 101 coupon. What is killing this market is the explosion of the No Doc, No Ratio and Stated along with the subprime stupidity. The result he says with all of this is that the big houses will be the only ones able to wholesale and those like FNBA will not get backing and it will prevent anymore New Century's. So what you have left are the really big boys and regular banks that hold these mortgages, in essence some sanity will be returned.

As always, stay tuned!