Numerous sources are reporting this morning that Tuscon, AZ-based First Magnus Financial has stopped funding loans. From the Arizona Daily Star:
An e-mail Wednesday evening told branch managers of Great Southwest Mortgage, the retail arm of First Magnus, that the parent company was no longer funding loans. First Magnus ranked 61st in the Star 200 survey of the biggest employers of Southern Arizona, reporting 800 full-time-equivalent local employees. “We will not be funding loans tomorrow,� wrote Erik Lutz, the president and founder of Great Southwest. A manager with the company, who spoke on condition of anonymity, said he was told Wednesday evening that First Magnus was closing. However, he said Great Southwest hopes to stay in business by brokering loans elsewhere. “All my employees were unaware until I told them, and they were pretty shocked,� the manager said late Wednesday. “As loan officers, we're going to move on to some different companies. We're still going to stay in our field. We're going to regroup and figure out the best places to go.�
The company's own branch managers are apparently speculating a bankruptcy is in the offing, according to the same story. National Mortgage News has reported on the troubles at First Magnus as well, noting that the privately-held company funded $6.59 billion in the first quarter of 2007, a 33 percent increase from year-ago levels. NMN ranks the lender 22nd in the residential market and one of the nation's biggest wholesalers.