Lydian Mortgage - Wholesale - "A" paper
We received a call at approximately 11:30am (EST) today from an AE who told us there was a conference call around 11:00am, and it was announced that they were ceasing operations. All AE's were terminated effective immediately, and only a skeleton staff will remain to close out the pipeline. The AE told us he had just finished sending notice out to his clients when email was abruptly shut down.
In a comment from their web site, Lydian says, "We are dedicating our future efforts toward expanding VirtualBank, our retail delivery channel."
The best Discussion group and more information about Lydian Mortgage is on our Forum thread here.
From the ailing/Watch List - 2008-02-20: Emails received today point to Friday as the final day for Lydian Mortgage. It appears there are less than 49 people who might be affected by a shutdown if it were to happen.
We compared Lydian's Rate sheet with another major Wholesale company. Looking at your basic Fannie 30-year fixed (unadjusted), Lydian's prices were almost 1.5 points out of the market. On today's single-page sheet, a 30-yr fixed at 6.000% has a half-point cost while Flagstar returns over 1% rebate. How is an AE supposed to walk into a Broker's office and pick up any business with pricing like that?
We believe it's time for some announcements to be forth coming from Lydian Mortgage.
Original Ailing/Watch Listing - 2008-02-19: We have been 'Watching' this company. Lydian Mortgage (aka Virtual Bank Mortgage) is fine-tuning its broker-base with a zero-tolerance policy for fraud and tightened pull-through requirements for loans that are locked. Today, a tipster wrote:
A couple of AE's we spoke with confirmed the lock cancellations and acknowledged there were a number of broker terminations resulting from a policy change that went into effect on 2008-02-01, requiring a lock-to-fund pull-through ratio of 70%. Companies whose ratio falls below 35% are being suspended. There is also a 5-day delivery requirement for new locks, and brokers who fail to deliver even just one loan in that time frame are also being dropped.
One tip reportedly from "high up" states, "a few bad hedges took them down..."
In another tip from the inside:
Lydian cut back its product offerings at the end of 2007, as noted by one forum poster:
AE's told us they are only offering FNMA Full-doc products; the rate sheet they have posted for today's date confirms it. We heard that they are trying to get set up with Freddie Mac for their Alt-A products. There are no FHA or Gov't. products on the rate sheet. In fact, our comparision today of their rates show they are priced out-of-the-market by about 1 point! You can't expect to get business in the door that way.
There was a round of layoffs in August 2007, as briefly reported in the Palm Beach Post. AE's are being kept in the dark and not even sure of the current headcount; volume information for recent months was not disclosed. December 2007 volume was reportedly around $80 million.
Lydian Mortgage is a wholly owned subsidiary of Palm Beach Gardens, FL based Lydian Private Bank. Public records indicate a Class Action Complaint was filed against Virtualbank, Lydian Trust Company, Lydian Private Bank, et al on 2008-01-11 for alleged violations of TILA and the California Business and Professions Code in connection with certain Option ARM's.
lydian_insider at 13:35 2008-07-05 said::shock: Don' be surprised if the Private Banking division of Lydian Trust Co. starts unraveling within the next 12 to 18 months. They are currently desperately seeking capitalization of $50MM from Goldman and having a tough time. Their expansion strategy is falling apart.the OTS is putting on the pressure..alot has to do with the inability to retain clients and Rory Brown and James Meany's ego driven initiatives, not to mention that they are surrounded by a handful of senior mgt mercenaries brought over and inticed with fat equity states and compensation plans from the likes of Bank of America, Wachovia, Northern Trust and others...the fundamentals don't look good .. there's more...More later. Permalink
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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.