Local Mortgage Companies Shut Down

An announcement was made by Capital Alliance Funding Corporation that the nonprime wholesale lender would shut down. All remaining mortgages in its inventory would be sold or transferred. The San Francisco based Board of Directors approved the move unanimously, and a prospectus for the closure of the lender is being drawn up. An abrupt end was also in store for QuoteMeARate.com, Inc., a 300 branch operation which stopped doing business on Friday of last week. An email was sent to all employees at all branches saying not to report to work on Monday.

Both companies site the constant change of the industry, which proved too strong regardless of early earnings reports. Rising rates and inflated home values have caused the real estate finance sector to struggle since the beginning of the new year. Sagging earnings during last year’s fourth quarter were attributed to an inverted yield curve and the fast pace of rate increases. Not all lenders are shutting down, though. Golman Sachs Group was awarded kudos for its stellar combination of businesses and Capitol One Financial Group was set to acquire three smaller lenders.