Diablo Funding Group Inc. - Wholesale & Retail
"WE AT BAYBANCORP WISH TO SAY GOODBYE!" reports one email announcement we received. BayBanCorp was the wholesale division of Diablo Funding Group.
Under a headline "Diablo Funding closing its doors," the East Bay Business Times says, "One of the largest private mortgage brokerages in Northern California, Diablo Funding Group Inc., is closing its doors. The San Ramon company is shutting down effective this week..."
Located in San Ramon CA, they reportedly had a network of over 650 retail reps. In 2006 according to their web site, they originated over 100 thousand loans.
The shutdown is effective this week according to CEO Anthony Battagello.
At one time, the San Francisco Business Times (according to the company web site) voted them the "Number One Largest Residential Mortgage Broker in the Bay area" for three years in a row.
We heard from more than one source that IndyMac is purchasing the balance of the pipeline, even suggesting Diablo first must go through a BK "before the buyout docs are drawn."
Diablo's shutdown is not without some controversy: why would a company, albeit a Brokerage, run into this type of problem? Why not just scale back and wait it out? Maybe the answer is in the repurchases. One email we got:
"The loans they were asked to repurchase were with BNC. When Lehman noticed a high percentage of loans originating from Diablo going bad, they went for the repurchase option. Diablo refused. Lehman then laid down the law. They refused to accept anything Diablo originated in any of their wholesale lenders, anywhere!"
One of our sources says "the Diablo story that you will read is more whitewashed and PR driven." Therefore we include for the record an internal Diablo memo, unedited as we received it:
Rumors abound that Diablo is filing bankruptcy today or tomorrow. Stay tuned for updates.
A final quote from The Truth About Mortgages, "It is unclear at this time if loans already in progress will continue to be processed."
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Important: This company is on our list of lending operations that have "imploded". However, please note that "imploded" is a somewhat subjective and does not necessarily mean operations are ceased permanently: it can mean bankruptcy filing, temporary but open-ended halting of major operations, or "firesale" acquisition. All information here is provisional, and may contain inaccuracies (especially newer information). If you are planning on doing business with this company or any other one listed on this site, you should inquire with them directly on whether they can still meet your needs. Many are still operating in some capacity.