Mortgage Casualties Decrease in 2010: Industry Report

Fewer mortgage-related firms closed their doors during 2010 than in 2009, according to industry data released this week.

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Including mortgage companies, retail and wholesale credit unions, and federally insured banks, the online industry resource ""MortgageDaily.com"":http://www.mortgagegraveyard.com tracked 201 mortgage-related business operations that either failed or were closed down during 2010.

The casualty list was smaller than 2009's count, which stands at 230 mortgage-related fatalities -- the most since company began tracking the data in 1998.

A total of 22 non-bank closures were recorded for 2010, compared to 70 tracked during 2009. MortgageDaily.com says non-bank failures peaked in 2007 at 156.

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According to the National Credit Union Administration, ""casualties from its sector"":http://www.ncua.gov/Resources/ClosedCU/2010.aspx numbered 19 last year. The count was up from 15 seizures and liquidations in 2009.

Last year saw a rise in the ""failure of banks"":http://www.fdic.gov/bank/individual/failed/banklist.html that were insured by the FDIC, 157 compared to the previous year's 140.

Among the year's most notable events was Bank of America Home Loans' October decision to close its wholesale channel, which was inherited from the July 2008 acquisition of Countrywide Financial Corp. BofA previously closed its own wholesale lending channel in December 2007.

Also blindsiding the industry was Wells Fargo & Co.'s July decision to stop originating nonprime portfolio mortgages at Wells Fargo Financial Inc. That move was expected to impact nearly 4,000 employees.

Premium Capital stopped accepting new business after losing its Ginnie Mae approval and approval as an Federal Housing Administration (FHA) mortgagee. Branch managers of the company, which did business as TopDot Mortgage, were subsequently indicted over seven allegedly fraudulent transactions for $5,739,326.

Sir Richard Branson abandoned his foray into the U.S. mortgage market, closing the mortgage business at Virgin Money USA Inc. Branson proclaimed the prior year, ""At a time when others are exiting the mortgage space, leaving consumers with fewer financing options, Virgin Money is jumping in with its wholesale mortgage program.""