Mortgage Company Stops Funding Loans
02/18/2007

Subprime lender, Mortgage Lenders Network USA (MLNU), announced it has stopped funding loans and accepting applications for loans. The company will be exploring 'strategic alternatives' for its wholesale business.

Since homes sales and interested rates have gone up, there has been a sign of stress amongst subprime lenders. Just last Thursday, a competitor to MLNU, Ownit Mortgage Solutions Inc, files for Chapter 11 bankruptcy protection.

MLNU has employed over 1,800 people, including 950 in Connecticut, and owns five regional lending offices. Since the announcement, the company did not return any phone calls or emails requesting further comment.

President of Whole Access, a company which tracks the mortgage industry, David Olson, said he wasn't shocked to hear about MLNU's announcement, having already known about subprime lender's struggles. "Profits are way down, and margins and razor-thin or even negative," he said.

Home prices and interest rates have been on the rise, which has led to more competition for a shrinking amount of borrowers.

Just weeks after MLNU's Chief Executive, Mitch Heffernan's December 8, 2006 statement emphasizing the company's growth and plans for 2007, as well as introducing plans to build new headquarters in Wallingford, Connecticut, the company filed for bankruptcy.

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