For many former subprime lending powerhouses these days, the name of the game is "get into Alt-A, quick!" -- and National Mortgage News is reporting this morning that First Franklin Financial Corp., recently purchased by Merrill Lynch, is doing just that:
Subprime wholesaler First Franklin Financial Corp., San Jose, Calif., has entered the alternative-A market and plans to securitize the loans through its parent company, Merrill Lynch.
According to the NMN story, First Franklin is targeting to get 10 percent of its mortgage book into Alt-A before the end of this year, which highlights the somewhat grim future that now would seem to lay ahead for any independent mortgage shops in the Alt-A sector. We've already seen the credit crisis essentially take out every major independent subprime lender -- Accredited, New Century, and so on. I'm guessing that you'll soon see a similar scenario play out in the Alt-A lending market, with independent shops either folding or selling, although with perhaps less fanfare from the major media in the process.