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Accredited Shuts Down Much of Company
Wednesday August 22, 9:51 am ET
Accredited Home Lenders Shuts Down Much of Its Business Amid Mortgage Turmoil
SAN DIEGO (AP) -- Accredited Home Lenders Holding Co. plans to shut down most of its business to survive the troubles in the home lending industry, the company said Wednesday.
Accredited Home Lenders said it will cut its work force to 1,000 people -- from 2,600 at the end of June -- and close 65 branches. The company will immediately stop accepting applications for home loans in the U.S., though it will honor the loans it has already committed to finance.
The company will close its retail lending business, which issues home loans directly to consumers. Accredited is also scaling back much of its wholesale lending division, which issues mortgages through brokers. The company will close five of its 10 brokered loan offices and lay off about three-fifths of the unit's workers.
Accredited Home Lenders, which issued $15.77 billion in home loans last year, said shutting down most of its business is necessary to navigate the turbulence in the mortgage industry.
Stung by decaying credit quality and a newfound fear of risk on Wall Street, mortgage lenders across the industry have struggled to raise cash this year.
More than 50 lenders have gone bankrupt this year, including two of the nation's 10 biggest.
Accredited's Canadian operations are unaffected, and the company will continue to collect payments on the $8.4 billion in loans in its servicing portfolio.
Shares of Accredited Home Lenders slipped 55 cents, or 8.4 percent, to $6 in premarket trading Wednesday. The stock closed Tuesday at $6.55, down 76 percent for the year and almost 90 percent from its all-time peak last year. |
