SCME Mortage Bankers (Wholesale) - Retail/Wholesale Alt-A Lender

(Update 1, 5:30pm Eastern) We've received volumnous word from current and former employees and correspondents of SCME that they have shut down their wholesale operations. We are informed that only their California retail will remain (something a bit less than a dozen branches).

Below are key portions of communications of an AE at the company which was forwarded to us:

As you are aware, the liquidity crisis in the mortgage lending industry has adversely impacted nearly every major mortgage originator, mortgage investor, and warehouse lender. SCME is no exception. We have spent a great deal of time analyzing the market and SCME's role in the future of mortgage banking. There is every indication that the liquidity crisis will continue for the foreseeable future, causing significant challenges to our organization.

We would like you to know that SCME has valued our relationships over the past 24 years, resulting in strong partnerships and lasting friendships. Thus, our decision has not been made lightly, nor has it come easily. Effective the close of business today, September 28th, 2007, SCME will no longer accept wholesale business. Any loan that is not funded as of today will be returned to our customers.

A source gives as far as numbers on SCME: "Over 250 employees 11 branches closing 500mil to 800mil the last three months dropped to 150mil".

We were first alerted to the possibility of large-scale shutdowns back around the beginning of September, when an informant reported deep layoffs at the company.

A description of the company is available at its "about" page (partially reproduced below):

SCME Mortgage Bankers, Inc. is among the fastest growing, privately held mortgage companies in the country. 2004 marked SCME's 20th anniversary as a full service mortgage banker, originating wholesale and retail loans. SCME operates branches throughout California, Colorado, Connecticut, Florida, and Utah and is authorized to do business in 29 states.

SCME has over 100 highly competitive loan programs and employs leading edge technology to ensure that our customers are most efficiently served. We are an approved Ginnie Mae, Fannie Mae and Freddie Mac seller/servicer. We offer a full range of government and conventional products as well as home equity and niche products.

SCME has been recognized by Broker Magazine as the 25th Largest Wholesale Lender in the Nation in 2005. SCME has also been recognized by Origination News as the 9th Largest Option ARM Lender and the 17th Largest Alt-A Lender in Q4 of 2005. We pride ourselves on providing the highest level of service to our customers and business partners.