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NEW YORK - First Magnus Financial Corp, one of the largest independent US mortgage lenders, filed for Chapter 11 bankruptcy protection on Tuesday, the latest home loan provider to collapse as the housing market slumps.
The privately held company, based in Tucson, Arizona, filed less than a week after it stopped funding home loans and taking loan applications. It said it laid off nearly 6000 employees.
First Magnus listed US$942.1 million ($1.39 billion) of assets and US$812.5 million of liabilities as of May 31. It also listed between 25,001 and 50,000 creditors. It was the 16th-largest US mortgage lender from January to June, originating US$17.1 billion of home loans, according to the newsletter Inside Mortgage Finance. Founded in 1996, the company operated in all 50 US states. It said it planned to wind down operations.
Dozens of mortgage lenders have quit the industry this year as delinquencies and foreclosures rose, mortgage rates were reset higher, and housing price appreciation slowed. Capital markets have tightened, depriving lenders of needed cash.
Another independent mortgage provider, American Home Mortgage Investment, the 10th-largest lender before filing for bankruptcy protection on August 6 is also liquidating.
- Reuters
