Silver State Mortgage Makes Abrupt Exit
Silver State Mortgage, one of the nation's larger wholesale lending operations, said yesterday that it has ceased all national operations. According to a notice posted on the company's website, the company said it is "evaluating opportunities" with other financial institutions, although no reason was provided for the company's closure. Silver State had been a mainstay on the Inc. 500 list of the nation's fastest-growing private companies for three years, ranking #159 in 2004, #214 in 2005 and #227 in 2006, and was recently rated the nation's fastest growing wholesale lender in the third quarter of 2006 by competing industry source National Mortgage News. Silver State, who provided retail and wholesale mortgage services in Nevada, California and 18 other states, is the latest in a growing string of troubled lenders caught off guard by quickly deteriorating conditions in the subprime credit sector. According to blogger Aaron Krowne, who maintains a popular site dedicated to tracking lender failures called the Mortgage Lender Implode-o-Meter, 22 lenders have shut their doors since December 2006. In particular, a growing swath of lenders associated with Merrill Lynch have run aground in recent weeks, as the Wall Street bank has been pushing back on its warehouse credit arrangements in an effort to stem losses from poor collateral performance. No reason was given for Silver State's closure, however, and as of HW's publishing deadline Thursday it remains unclear which Wall Street firm had provided the company with its funding. Calls to the company seeking comment were unreturned. "Even if Merrill wasn't pulling the purse strings on this one - and at this point, I'd find that very hard to believe - somebody yanked the rug out from under [Silver State]," an anonymous industry source told Housing Wire. Silver State said it is looking into opportunities with other financial institutions, suggesting that it is looking to establish a new warehousing agreement with a different Wall Street firm. The company has said it plans to keep its wholesale team in place while it seeks a new partner.