American Equity Mortgage closed its doors for good after its failure to invest in technology made it unable to compete with other mortgage lenders.
The company previously sold all of its assets, including its name, to Finance of America Mortgage, according to an article by Greg Edwards for St. Louis Business Journal.
And according to this article, the history of the company is a fairly sordid affair.
The company previously had branches across the U.S. in Atlanta; Charlottesville, Virginia; Fort Myers, Florida; Kansas City, Kansas; Minneapolis; Oklahoma City; Pittsburgh, Pennsylvania; Seattle and St. Louis.
From the article:
As for what led to the company’s decline and owner Deanna Daughhetee's decision to sell the assets, Becker said, “The industry has changed dramatically, and she didn’t invest enough in technology. By the time she did, the hole was too deep.”
The cost of originating a mortgage hit all-time highs back in 2013 and 2014, but now, those costs are up once again and much like before, hitting all-new highs.
In fact, lenders reported a negative profit for the first time since 2014, data from the Mortgage Bankers Association shows.
Many lenders hope that investing in digital mortgages will help cut back on costs as competition rises. Freddie Mac talks more about that in this podcast.
But for American Equity Mortgage, that investment was simply too little, too late.