From the LATimes.com website :
The sub-prime lender, a casualty of the changing mortgage market, owes more than $165 million.
By E. Scott Reckard, Times Staff WriterDecember 30, 2006
Ownit Mortgage Solutions Inc. of Agoura Hills, which shut down abruptly early this month, has filed for bankruptcy protection, saying it owes more than $165 million to Merrill Lynch & Co. and other financial firms that bought Ownit loans now in default.
The petition, filed late Thursday in federal bankruptcy court in Van Nuys, was made in response to lawsuits filed by two creditors, said William Dallas, Ownit's chief executive and sole director.
He said if he had not filed the Chapter 11 petition, his 800 former employees would never receive the wages and commissions they are owed."Once you file Chapter 11 employee claims become the No. 1 priority," Dallas said in an e-mail Friday.
Assuming that the court approved his plans, he added, "once we file our 2006 tax return I will have enough money to pay them what they deserve."The filing is a sign of the stresses felt by so-called sub-prime lenders such as Ownit, which make higher-cost loans to borrowers with poor credit or limited incomes.
Ownit grew rapidly over the last few years, becoming a top 20 lender nationally in the sub-prime niche, but the closely held company turned unprofitable as interest rates and homes prices rose and competition for a shrinking customer base intensified.
Looks like some of these brokers posts are coming true.