Nationstar Halts Wholesale Originations
Nationstar Mortgage, the subprime lender purchased by Fortress Investment Group LLC, is the latest lender to cease wholesale operations according to numerous sources. I'd first noted rumors of massive job cuts at Nationstar last week, on the basis of numerous emails I'd received from now-former employees of the company. (HW readers already know that I expect wholesale lending to essentially disappear, especially in the subprime lending space, so this news isn't entirely unexpected.) It appears that neither Nationstar nor Fortress have made executives available for comment to the press on the move; the exit from wholesale lending leaves Nationstar with a comparatively small retail origination channel and a large $10 billion servicing portfolio. Nationstar originated $4.4 billion during the first quarter, according to numbers posted on the company's Web site, and National Mortgage News has reported that the company funded just $609 million via its retail channels during the second quarter. Many sources I've spoken to have suggested the company's retail operations may also be at risk. Fortress purchased the subprime mortgage banking operations of homebuilder Centex in March 2006 in a deal worth approximately $575 million, which it then renamed Nationstar Mortgage. My best to those affected, as I know many from Nationstar read this blog each day.