Current Issue
Atlanta-based SouthStar Funding, LLC said late Friday in a posting on the company’s Web site that it has ceased mortgage lending operations, apparently the latest victim in the credit crunch that has claimed numerous businesses in the first quarter of 2007.
The company cited “the recent unprecedented downturn and policy changes in the mortgage industry” for the shutdown, and provided no indication of its plans for future action. Calls to the company seeking comment were not returned by HW’s publishing deadline on Monday.
SouthStar Funding generated $3.4 billion in wholesale production in 2003 and $4.25 billion for 2004, although its production numbers for 2005 and 2006 are not publicly known. The company offered a wide range of mortgage products but primarily specialized in funding subprime mortgages, according to sources that had previously sent loans to the company for funding.
The company employed well north of 700 employees and operated offices in more than 30 states, and was ranked “Best Company to Work For� by the Atlanta Business Chronicle in 2004.
No information regarding the fate of its employees was available at the time HW published this story, although most likely are looking for new jobs as a result of the closure.
Speculation the company was in trouble had been rampant since at least February, when blogger Aaron Krowne placed SouthStar on his “ailing list” of mortgage lenders at his now well-known site, the Mortgage Lender Implode-o-Meter. Krowne noted in a posting on his blog site over the weekend that he had been threatened in the past by now-former employees of the defunct company.
“SouthStar has the disctinction of being the only lender to actually threaten me legally and actually attempt to get me fired at my job, for placing them on the “Ailing Lenders” list in reponse to reports in February,” Krowne said. “Apparently, I became the “two minute hate” for the company’s insecure employees, and some of them even made veiled physical threats.”
“It all made me all the more certain the company was doomed,” he said.
