A Texas-based subprime lender that employed 325 people has unexpectedly closed its doors, but will honor loans in the pipeline.
Sebring Capital Partners, a wholesale mortgage lender founded in 1996, has been struggling with a decline in loan originations. The company closed an estimated $209 million loans in the second quarter of 2006, down from $235 million in the same quarter of 2005 and $449 million in the second quarter of 2003, the Dallas Business Journal reported.
Sebring senior vice president for legal and compliance Michael Waldron, told the newspaper that employees will be paid for work through Nov. 30, and that the company will honor loans it has approved if they can be closed by Dec. 15.
The company’s Web site says Sebring ceased operations Dec. 1, and offers a toll free number for customers with loans in process.
An anonymous former employee told the Denver Post that Sebring was hurt by rising defaults, and that a major investor had stopped funding the company’s loans. An attempt to sell the company fell through, the source said. Sebring employs 50 people in the Denver area, the Post said.
In recent months, several subprime lenders have been put up for sale or closed their doors, including First Franklin Financial, Champion Mortgage, Option One Mortgage Corp., and Meritage Mortgage Corp..