Two more subprime meltdowns to report.
First People's Choice Home Loan Files for Bankruptcy:
March 20 (Bloomberg) -- People's Choice Home Loan Inc., a mortgage lender for people with credit problems, filed for bankruptcy protection.
The Chapter 11 filing today in U.S. Bankruptcy Court in Santa Ana, California, comes as delinquency rates on so-called subprime home mortgages hit a four-year high. Subprime lenders specialize in loans to customers with bad credit or heavy debt.
People's Choice, the fourth subprime lender to file for bankruptcy since December, specializes in ``non-prime'' residential mortgages, according to its Web site. The site says the Irvine, California-based company is ``devoted to serving borrowers with less-than-perfect credit.''
Subprime lenders Ownit Mortgage Solutions LLC, Mortgage Lenders Network USA Inc. and ResMae Mortgage Corp. have all filed for bankruptcy recently. In the past year, shares of three independent subprime lenders -- Fremont General Corp., New Century Financial Corp. and NovaStar Financial Inc. -- have lost at least half their market value.
People's Choice estimated that it has more than $100 million each in assets and liabilities, according to court documents. Among the 20 largest unsecured creditors listed in court papers are Wachovia Bank NA, Bear Stearns Mortgage Capital Corp. and Merrill Lynch Mortgage Lending Inc.
The company is a subsidiary of People's Choice Financial Corp., a real estate investment trust. Last week, that company withdrew a registration statement with the U.S. Securities and Exchange Commission that it had filed tosell around 64.3 million shares valued at $192.9 million. The company cited ``various business and market reasons'' for the withdrawal.
According to the registration statement, filed in June 2006, People's Choice Financial had about $3.9 billion in mortgage loans for investment on its balance sheet in March2006. It issued $4.5 billion in mortgage-backed securities in 2005.
Second from Brokers Outpost:
Effective immediately Loan City has shut there doors. They will fund through today only.
3 comments:
Lenders Network screwing their own and may get serviced with burritos
daily! Yes this means Prison!
link found on: http://housebubble.com/
http://www.courant.com/hc-mln0320.artmar20,0,328415.story?track=mostviewedlink
"Heffernan would be charged under the statutes of the state Department of Labor, which authorizes the department to seek arrests for nonpayment of wages. Charges covering wages over $2,000 are a class-D felony. Such charges are not unusual, but Mortgage Lenders represents one of the larger cases.
Experts said officers in a company that has filed for bankruptcy aren't shielded from prosecution for failure to pay wages that have been earned.
"Officers have been arrested because it is a crime," said Joel Grafstein, a bankruptcy attorney at Grafstein & Associates in Farmington. "It's a crime not to pay."
Grafstein said he sees similar cases "every once in a while," but this one stands out because of the high levels of wages that are owed.
Each of the 61 counts would carry a fine of up to $5,000 and a maximum of five years in jail. The fines could increase if more violations are found, Pechie said."
305 years in prison if all charges stick with the max term! WOW
People's Choice estimated that it has more than $100 million each in assets and liabilities, according to court documents
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