Origen Financial, Inc. (Correspondent) - MFG Housing Finance

Southfield, MI based Origen Financial, Inc. announced Thursday, 2008-03-13 that they are shutting down their Correspondent Mortgage Group. We received a copy of the announcement which reads, in part:

"As of 6:00 p.m. EST, Thursday, March 13, Origen Financial will stop accepting new loan applications due to conditions in the capital markets that make it impossible to sell loans profitably.

Servicing, In-House (Community) Lending, and OF Insurance will continue to grow and be unaffected.

Origen's Correspondent Mortgage Group will be shut down, purchasing locked loans only."

Origen exclusively originates and services loans for manufactured housing. Per their web site, the mortgage products they offer "are available only to Correspondent Lenders, and are purchased as wholly funded, closed loans." One tipster tells us this "will affect the manufactured housing industry in a huge way, including affecting the few correspondent lenders they accepted loans from, better check on this and get the word out, they were the last of a dying breed.... many housing dealers will be effected as well....."

The company's mortgage loan processing function is handled out of their Fort Worth, TX office according to Hoover's. Monthly mortgage origination volume in 2005 was about $21 million according to info on allmortgagedetail.com, about 95% of their average reported total loan volume (including chattel).

In their 4th Quarter and 2007 Earnings Release, Ronald A. Klein, President and CEO states:

"We have been negatively impacted by the global credit and liquidity crunch generally attributed to have started with sub-prime mortgage defaults and foreclosures occasioned by falling housing values and lenient lending practices. Credit tightening and resulting asset repricing has impacted companies like Origen that had no direct exposure to sub-prime mortgage loans. We have been subjected to margin calls and market value adjustments on our credit facilities despite our continued excellent loan performance. The ongoing uncertainty and credit stress in the housing and capital markets, and the resulting lack of liquidity have curtailed access to the securitization market. Further securitization financings of our loans have effectively become unavailable to us on a profitable basis. In the end, our management and Board had no practical choice but to suspend funding new loans until market conditions allow us to earn a profit from those activities."

Origen's warehouse facility, which has an outstanding balance of $146.4 million, is through CitiGroup. One source we spoke with said the line(s) were cut due to "the drop in the company's share price." Crain's Detroit Business and TradingMarkets.com reported a $39.1 million loss for the fourth quarter. Share prices have dropped from their 2004-05-06 initial offer price of $8 to just $1. The article on TradingMarkets.com also indicates the "board is assessing possible continuation of company's business ... and also a possible sale of certain company assets or entire company."

Contact us if you can provide additional details on this company, number of employees affected, recent volume, etc.