Monday, April 02, 2007

Southstar DONE!

Per their website:

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.

First reported here!


Dear Employees:

It is with great regret and sadness that I must announce that SouthStar is ceasing its mortgage lending operations today, April 2, 2007. We are canceling any pending closings and will not close or fund any new loans going forward. All pending loan files will be returned immediately to our customers.

This decision was brought upon by events that developed toward the end of last week. Two of the primary purchasers of our loans refused to fund pools that were already locked and committed until we reimbursed them up front for all of our existing repurchase obligations – something that we were financially unable to do. Another purchaser only bought a portion of loans that they had previously committed to, kicking out a significant portion of loans for various reasons unrelated to underwriting guidelines. We rely on the cash from the sale of these pools to fund our operations. Without the funds from the sale of these loans, we are approaching an insolvency situation. We identified two potential buyers of our company that would have allowed us to continue operating but were notified on Friday and Sunday respectively that this would not be a viable option. This leaves us no choice but to cease operations.

Our first priority is to protect employee compensation: salaries, bonuses, commissions and severance pay. At this point, we cannot guarantee that we will be able to do this but we will make every effort humanly possible.

Senior Managers will be meeting with everyone within the next hour to formulate a plan for the remainder of today.

It is an extremely difficult thing to see a company that you have put in so much effort, time, blood, sweat and tears fail. Personally, it feels to me like the loss of a loved one. The most difficult thing to handle is having to say goodbye to so many wonderful friends and extended family. Mike, Brian and I appreciate everything that you all have done for this company and want to sincerely thank you for your efforts. We should all be very proud of what we accomplished over the years and today’s events cannot diminish that.

It has been an honor to work with each of you. I wouldn’t have changed anything for the world.

Kirk Smith President SouthStar Funding


Idaho_Spud said...

Wow... this is the place to come for Mortgage Implosion scoops!

Has this story even hit the mainstream?

I'm still wondering when our local enabler of REIC commercial properties, and consumer-dependent commercial properties (San Joaquin Bank) will begin to feel the effects of its non-performing loans.

I' guessing that after this year's tax refund is blown, over-consumers will realize they are quite broke and another re-fi loan will not be available. About 6 months after that, the strip malls should start coming back to the bank.

Nothing says 'recession' like brand new boarded up, bank-owned strip malls.

Bakersfield Bubble said...

It is hitting all the blogs now.

SJB is so dependent on real estate, they will suffer some serious damage when this real esate rout is over!

Anonymous said...

"We should all be very proud of what we accomplished over the years and today’s events cannot diminish that."

And what did you "accomplish" exactly?

mr big said...

Another one bites the dust!This is very entertaining news as usual.When is countrywide going to come clean? Isn't this country great.

Anonymous said...

"And what did you "accomplish" exactly?"

They fucked a lot of people!

Melody said...

They're still hiring when you look at their

Good find.

Darth Toll said...

"And what did you "accomplish" exactly?"

This is so typical of the mentality of these idiots. We've heard numerous stories (especially in relation to the NEW collapse) about how all you would have to do is basically show up for work and rake in the big bucks. It’s like Manna from Heaven. Really, the entire paper-pushing Wall St. REIC elite don’t actually do anything productive, they just make big bucks to move money around and when the manure hits the oscillating air mover, they just send out a sappy apology and move on to the next scam.

Perhaps some of them actually believed they were doing a great public service by enabling the “American Dream” for millions that didn’t have access. But we know now that this isn’t the case. All they actually did was hyper-inflate a dangerous asset bubble and make TRUE home ownership all but impossible for any actual hard-working savers out there.

For the last time, good credit-worthy savers don’t need to be competing with a bunch of sub-prime no money idiots who are bidding up RE like crazy!! And for what?!?!? So they can turn around tomorrow and be foreclosed on? Sheesh! I’ve had it with this bunch of self-righteous scammers. With friends like this, who needs enemies? One final note of common sense directed at this retard: if business is so good that all you have to do is show up and get showered with dough, something is probably wrong and you’re involved in a bubble or a scam - in this case, both.

Anonymous said...

FWIW, here's an e-mail the New Century director (and co-founder) sent to friends last month, reassuring that all would be A-OK:

Of course, he has sold his $15 Mil in company stock since Jan 2006.

lovin' the positive side! said...

If you would like to hear from an insider from SouthStar you might find this interesting.

Darth Toll...don't know what to tell you but that anger over something no one could control * is going to kill you. And such insults against people you don't even know and could certainly never understand--obviously.

* If you invest AT ALL-any stocks, mutual funds, etc. you were a part of it. DO YOU NOT SEE THAT! Man...we all fit together in an intricate web and unless you are going to make a positive difference you are no better than those you are talking of. Yes-that was a slap and I am sorry. So...balance your glucose, fly a kite, pet the dog and love life dude! It is is not all black and white. There is beautiful color out there, if you choose to see it. Stop judging and live!!!!!!

lovin' the postive side! said...

Hey Bubble Boy!!

You espousing virtues the lender and broker community need to take up. You place blame and people go on negativily about things that are virtually uncontrolable. But yet you allow the profanity on your blog. Double standard eh! Is it necessary? Dude, this is your universe-be the master! You have the ability to guide a positive experience-DO IT! YOU HAVE CONTROL HERE!! I do not know what the previous two years have been about but this direction is not a positive one.


Bakersfield Bubble said...


Why dont you start your own blog on how great the market is?

lovin' the positive side! said...

Ah but you misunderstand me bubble boy. I did not say the MARKET was positive and am not implying that with my sign on. LIFE IS POSITIVE. Life is too short and precious to be so negative and ungiving. Besides-I am way too much of a pot smoking flake to maintain anything for very long-much less a blog.

I think "the market" (the bak. housing market, values, etc.) has issues. It is obvious there were factors of monolithic proportions that moved our market-that even the most seasoned experts never would have forecasted. However there are two sides to everything (a little more than two on this subject). What about the human side. Thousands of people are out of work due to corporate greed on wall street. WE ARE ALL a part of that! You also leave out free will of those choosing to purchase without the best of financing advice (options). They signed the note and deed! That was their choice. All I am saying is why not move forward with a positive flavor. If you are going to toss out a quote-ask the quoted. If you are going to post a letter from another company that bit the dust-find someone from the inside that can tell you what really happened-SouthStar as an example(of course-liberal grains of salt are always good to have laying around-no matter who says what!). And there is no reason to allow the cussing.

Bakersfield Bubble said...

"And there is no reason to allow the cussing. "

Fuck off!