Realty Mortgage Corp. - Wholesale - Agency, FHA

Realty Mortgage Corp. based out of Flowood, MS has shutdown its wholesale channel. The official announcement released 2009-01-22 was brief: "Due to current market conditions Realty Mortgage will no longer accept locks through the wholesale channel. This is effective immediately."

A number of sources indicated the closure was due to the loss of a warehouse line with Countrywide. However, it appears to us that this has more to do with an investor's retraction from purchasing TPO (or third-party originated) paper based on the way one broker reported loans are being handled:

"Realty is not funding on any loans currently in the pipeline or honoring locks. Also if loan has closed and not funded it will not be funded."

Another poster on our Discussion Forums noted "The retail side is alive and well and producing in near record numbers." This has been confirmed by multiple sources. Retail Branch Managers were sent a brief email about the wholesale shutdown and told, "Realty Mortgage is committed to Retail and this decision has no impact on your branch operation." According to their retail web site, there were 10 additional branches in central and southeastern states. They are licensed in 21 states, and also offer an "affiliate" or "net branch" opportunity for retail originators through an additional channel.

Total volume across all of Realty Mortgage's origination channels averaged over $149 million per month in 2007. We spoke briefly with CEO Tommy Taylor, who told us the wholesale side had been doing around $50 million per month but declined to comment any further. Other sources indicated Chase's withdrawal as an investor for wholesale was a key factor. There have been no reports of layoffs associated with the wholesale shutdown at this time.

As always, we welcome your input should you be able to provide additional details. We will update this listing as more information becaomes available.