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SouthStar Funding - Non-prime Lender

2007-04-02

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stories: housingwire.com, bizjournals.com

We have seen this coming for quite some time. This notice was just discovered posted on the Altanta-based lender's web site today:

SouthStar Funding, LLC sincerely regrets that it was necessary to cease its mortgage lending operations. The recent unprecedented downturn and policy changes in the mortgage industry necessitated this action. SouthStar appreciates its employees' and customers' loyalty to the company throughout the years.

I have to say that it is with genuine satisfaction that I post this report of SouthStar's closure (no, this is not my usual feeling when adding to this list). This is because SouthStar has the disctinction of being the only lender to actually threaten me legally and actually attempt to get me fired at my job, for placing them on the "Ailing Lenders" list in reponse to reports in February. Apparently, I became the "two minute hate" for the company's insecure employees, and some of them even made veiled physical threats.

It all made me all the more certain the company was doomed.

Update, 2pm: We also have recieved this email notice from a number of readers:

Dear Customer,

SouthStar Funding, LLC has ceased its mortgage lending operations effective immediately and is unable to close or fund any loans. The closing agents have been instructed to cancel any pending closings and are not authrorized to close or fund any loans from this point forward. The closing agents have been further instructed to immediately return any funds which have in their trust accounts to the source of the funds, wheteher SouthStar or one of its warehouse lenders.

We appreciate our relationship with you through the years and regret that this decision was necessary due to unprecedented downturn and policy changes in the mortgage industry.

If you have any questions, please contact the company at 1-800-567-9385.

Sincerely,

Kirk Smith
President

Below is some data on the company, courtesy of HousingWire:

SouthStar Funding generated $3.4 billion in wholesale production in 2003 and $4.25 billion for 2004, although its production numbers for 2005 and 2006 are not publicly known. The company offered a wide range of mortgage products but primarily specialized in funding subprime mortgages, according to sources that had previously sent loans to the company for funding.

The company employed well north of 700 employees and operated offices in more than 30 states, and was ranked "Best Company to Work For" by the Atlanta Business Chronicle in 2004.



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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.