Local lender shuts hastily amid turmoil in industry
Posted: Sat Apr 21, 2007 8:29 amWow.
More than 100 local employees abruptly lost their jobs Friday as a Mountlake Terrace-based mortgage lender closed its doors, a victim of the turmoil in the riskier end of the home-loan industry.
The company, whose MILA sign is visible from I-5 atop a glassy office building, "had done very well in the subprime market," said an employee who worked in re-selling the company's mortgages to investors. Subprime mortgages, made to customers with relatively poor credit, were a booming business until last year.
MILA's Web site claims that it averaged $400 million in loans a month, using a proprietary evaluation system that can give mortgage brokers a commitment on their loan request within 30 seconds. The site says MILA funded mortgages worth $4.5 billion in 2005, and projected an equal volume in 2006.
I could probably write a proprietary program to qualify sub prime customers in 30 seconds with a spreadsheet this afternoon.
As recently as Thursday, said the loan representative, company officials allowed employees to take applications from mortgage brokers around the country.
Although the company's automated system for processing and approving loans wasn't allowing mortgages to be funded, said the employee, "They kept telling us it was a computer glitch."
"It was really hard to look at all that paperwork on our desks knowing they [the brokers] are going to have to go through all that stuff with the borrower again," said the loan representative.
Staffers knew their situation was precarious when the number of mortgages being processed fell from 40 a day to 10, the employee said.
Sniff. All that 30 seconds of due diligence, wasted.
More than 100 local employees abruptly lost their jobs Friday as a Mountlake Terrace-based mortgage lender closed its doors, a victim of the turmoil in the riskier end of the home-loan industry.
The company, whose MILA sign is visible from I-5 atop a glassy office building, "had done very well in the subprime market," said an employee who worked in re-selling the company's mortgages to investors. Subprime mortgages, made to customers with relatively poor credit, were a booming business until last year.
MILA's Web site claims that it averaged $400 million in loans a month, using a proprietary evaluation system that can give mortgage brokers a commitment on their loan request within 30 seconds. The site says MILA funded mortgages worth $4.5 billion in 2005, and projected an equal volume in 2006.
I could probably write a proprietary program to qualify sub prime customers in 30 seconds with a spreadsheet this afternoon.
As recently as Thursday, said the loan representative, company officials allowed employees to take applications from mortgage brokers around the country.
Although the company's automated system for processing and approving loans wasn't allowing mortgages to be funded, said the employee, "They kept telling us it was a computer glitch."
"It was really hard to look at all that paperwork on our desks knowing they [the brokers] are going to have to go through all that stuff with the borrower again," said the loan representative.
Staffers knew their situation was precarious when the number of mortgages being processed fell from 40 a day to 10, the employee said.
Sniff. All that 30 seconds of due diligence, wasted.