Zaio Ceases Operations, Cites Market Conditions
And the real estate crunch continues to roll onward -- but this time, it's claimed the first collateral valuation provider, rather than a lender. Calgary-based Zaio Corp. said Thursday that it had "ceased operations" at Zaio Inc., its U.S.-based subsidiary that had been aggressively pushing its way into the real estate valuation and appraisal business in the States. The firm's closing is immediate, and the company will begin selling off assets to fulfill payments to creditors, company officials said in a press statement. All employees at the firm have lost their jobs, as well; the closure came as a shock to many, given Zaio's presence at the recently-completed Mortgage Bankers Association annual conference in San Francisco. The holding company, based in Canada, said it will look to "preserve capital and weather the current economic climate," and that it would "redeploy its rollout strategy at a more favourable time in the economic cycle." Both James Kirchmeyer and Douglas Vincent have resigned from Zaio Corp.'s board of directors, as a result -- Kirchmeyer re-assumed all of his prior assets sold to the firm when he joined the company from his own national appraisal management business, in a $3.2 million asset sale a few weeks ago that raised more than a few eyebrows at the time (including here at HW, which covered the transaction). The surprise closure may likely leave more than a few appraisers -- who paid the company to manage a so-called "appraisal zone" -- in the lurch for the funds they paid to Zaio, as the company sells its U.S. assets to satisfy creditors. Officials at the Canadian-based parent company were not available for comment before this story was published. As the economy has soured, the competition for real estate valuations has heated up significantly -- collateral valuation is a critical part of managing troubled mortgage loans. A number of new players have recently entered the space this year, and a few of HW's sources have mused in recent weeks that not all of the players vying for market share will survive. "Many factors, during one of the worst financial climates in US history, have proved insurmountable," Kirchmeyer said in a memo sent to Zaio appraisers on Wednesday. "Despite the state of the economy and mortgage industry, we were able to maintain our level of superior customer service in the valuation industry." Write to Paul Jackson at email@example.com.