Clear Choice Financial, Inc., a Nevada-based mortgage company, said it has officially closed the mortgage lending offices of its wholly owned subsidiary, Bay Capital, located in Owings Mills, Maryland and Irvine, California. Clear Choice announed Friday that it is insolvent and in default on numerous obligations. Out of an original workforce of over 150 people, 120 have been released, the company said in a statement.

The company is in default of its lease of its corporate headquarters located in Tempe, Arizona and has been locked out of its facility and is in default of a note with its former CEO and major shareholder Stephen G. Luke, and is in default of a note due to the two former owners of Bay Capital, Inc. Its operating company, Bay Capital, has been forced to shut down various warehouse lines of credit. “We are exploring various options to remain in business but may be forced to declare bankruptcy if negotiations with creditors are unfavorable,” said Chad Mooney, ClearChoice CEO. “The timing of our acquisition of Bay Capital coupled with a significant downturn in the mortgage lending market depleted our operating capital and we have been unable to raise additional capital to remain current on our pending obligations. We are assessing our various alternatives on a daily basis and do not know how long we can continue to remain in business.”