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Mortgage-Related Business Closings Drop Off in Q3: Report

Mortgage-related business closings and failures are on track to post fewer incidences in 2012 than any year since the mortgage crisis began.

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In the third quarter, 17 mortgage-related businesses failed, down from 25 in the previous quarter and 31 in the same quarter last year, according to a report released by ""_Mortgage Daily._"":http://www.mortgagedaily.com/

Bank closings followed this trend, falling from 15 failings in the second quarter to 12 in the third. Both numbers are down from the third quarter of last year, when 26 banks failed.

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Bank failures have been on the decline for the past four consecutive quarters.

Two nonbank mortgage-related entities closed in the third quarter. This is down from nine in the previous quarter but on par with the three posted a year ago.

Meanwhile, credit unions continue to post few closings â€" three in the third quarter and one in the second.

Year-to-date, 69 businesses have exited the mortgage sector, and _Mortgage Daily_ predicts by year-end the total could be fewer than 90. Last year's total was 137.

Mortgage-related business closings have not been this low since 2006, the year before the subprime crisis when just 31 closings took place.

In 2007, 167 mortgage-related businesses shut their doors, most of them nonbank entities, and the sector has continued to see heightened volumes of closures each year since then.

While numbers are currently low, one company's exit from wholesale lending did make a splash last quarter. ""Wells Fargo"":https://www.wellsfargo.com/ left the wholesale lending sector after a ""$175 million settlement"":http://dsnews.comarticles/wells-fargo-race-discrimination-claims-leads-to-175m-settlement-2012-07-12 regarding alleged discriminatory lending practices.

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