HCL Finance Inc. - Wholesale - Subprime

Update - 2008-12-09: The following email was sent to us by way of clarification:

"HCL Finance has decided not continue with our Wholesale Buisness operations due to the wide swinging of interest rates and causing high cancellation of rate locks by brokers. The volatile interest rate environment is hard for Secondary to do Hedging. We expect this environment will continue for a while and that is why it is making more sense for the company to concentration on our Retail operations. The rate lock is more controllable on the retail side. HCL was never soley concentrating on SubPrime lending. We have mainly A paper and Alt A lender from 1996 to 2007. We stopped Alt A lending in 2007 and continue agency and FHA loan.

We intend to offer agency and FHA loans in our retail operations.

Sincerely,
 
Hon Cheng
 
HCL Finance Inc"

Original Listing - 2008-12-08: We received copy of an email sent out by an AE announcing that "HCL Finance will no longer accept any new submission as of today 12/8/08." Their web site is gone, even from archive sources, and former employees we contacted couldn't provide much along the lines of detail, other than mentioning 5 to 6 AE's were let go and less than a half dozen office staff. This one rang a bell, so we went digging.

HCL Finance Inc. was credited back in March of 2007 with coining the industry acronym "NINJA" for No-Income, No-Job, and No-Asset application loans. It's a distinction that, in our current environment, makes this late entry of their demise even more perplexing. Had they attempted a change to an offering of Agency and FHA/VA loan products? We weren't able to tell, as more recent archived copies of their site available via the Wayback Machine were blank.

They were a significant player during the "boom years", averaging $24.7 million per month in 2005 offering every flavor of low- or no-doc subprime loans available. As you can see from a 2001 cached copy of the product list from their web site, we don't make this stuff up:

• No Job stated on 1003.
• No Income stated on 1003.
• No Assets stated on 1003.

Asked what happened to prompt the closure, a former employee told us "the volume just wasn't there... overhead was just too high for us to continue to operate." We're still looking for more information on their recent activity, but if you can provide more detail please don't hesitate to contact us.