During the first half of 2010, the number of mortgage-related firms to close or fail jumped by more than a quarter from the same time last year, according to[IMAGE]
industry data released this week. The increase was driven by financial institution failures as the number of non-bank lenders to close has dwindled.
Based on ""information tracked"":http://www.mortgagedaily.com/MortgageGraveyard.asp?spcode=pr by the online industry resource ""MortgageDaily.com"":http://www.MortgageDaily.com, the period between January 1 and June 30 of this year saw 109 mortgage-related failures and closings. The figure represents a 27 percent increase from the 86 closings reported during the first half of 2009.
Bank and credit union failures have both doubled when compared to the first six months of last year, with the number of banks to go under tallying 86 over the last two
[COLUMN_BREAK]quarters and credit union collapses at 11. Non-bank closings, on the other hand, fell by more than two-thirds during the same period to 12.
An analysis by MortgageDaily.com of bank failures and regulatory orders suggests this year's bank failures will end up between 175 and 200. FDIC Chairman Sheila Barr has indicated that bank closings will likely pick up pace and peak during the latter half of this year.
Among the most recent notable bank closings was Broadway Bank, which was closed in April by the Illinois Department of Financial and Professional Regulation - Division of Banking. The failure of the Chicago-based bank is expected to cost the FDIC nearly $400 million.
Universal Mortgage Corp. stopped doing business in April -- impacting around 100 employees. The Mequon, Wisconsin-based lender notified its mortgage broker customers on April 23 of plans to stop funding loans. A subsequent filing with the Wisconsin Department of Workforce Development indicated the company would close down entirely.
Not included in first-half closings was Wells Fargo Financial Inc., which ""this month announced plans"":http://dsnews.comarticles/wells-fargo-leaving-nonprime-space-saying-goodbye-to-3800-employees-2010-07-08 to exit from mortgage originations in a move that will impact 3,800 employees. The subprime lending subsidiary of Wells Fargo & Co. said that it no longer makes economic sense to operate a branch network separate from the bank. The biggest impact will likely be in Des Moines, Iowa, where the lender is based.