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Mortgage-Related Casualties Tally 49 for the Third Quarter: Report

During the third quarter, 49 mortgage-related companies went under or closed down part of their operations, according to industry data released Tuesday.
[IMAGE] Organizational shake-ups were felt at even the nation's largest lenders. One top-four bank put the brakes on its subprime lending business, while the country's No. 1 lender abandoned mortgage broker originations.

Industry casualties, as tracked by the online resource _MortgageDaily.com_ and detailed in its aptly named ""_Mortgage Graveyard_"":http://www.mortgagedaily.com/MortgageGraveyard2010.asp segment, totaled 158 for the year as of the end of September.

However, overall mortgage-related failures this year are on track to subside from 2009, which saw a total of 229

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bank, non-bank, and credit union collapses. This year's third-quarter closings are down from the 54 recorded during the prior period.

Some of the third's quarter's most notable _Mortgage Graveyard_ events included the National Credit Union Administration's seizure of three corporate credit unions: Members United Corporate Federal Credit Union, Southwest Corporate Federal Credit Union, and Constitution Corporate Federal Credit Union.

On September 17, ""six banks failed"":http://dsnews.comarticles/regulators-close-doors-on-six-community-banks-2010-09-20 saddling the FDIC with an estimated $300 million in losses. ""Eight bank failures"":http://dsnews.comarticles/regulators-close-eight-banks-as-2010-failures-hit-118-2010-08-23 on August 20 are expected to cost the federal agency more $400 million, and ""seven bank failures"":http://dsnews.comarticles/regulators-shut-down-seven-more-banks-as-2010-failures-surpass-100-2010-07-26 on July 23 are also projected to carry a loss of more than $400 million.

Among the quarter's biggest graveyard events was ""Wells Fargo's exit"":http://dsnews.comarticles/wells-fargo-leaving-nonprime-space-saying-goodbye-to-3800-employees-2010-07-08 from the origination of nonprime mortgages for its own portfolio. The closing of that unit was expected to result in nearly 4,000 layoffs.

After the ""end of the third quarter"":http://dsnews.comarticles/wells-fargo-leaving-nonprime-space-saying-goodbye-to-3800-employees-2010-07-08, the Florida Office of Financial Regulation seized Wakulla Bank, and Shoreline Bank was shut down by the Washington Department of Financial Institutions.

But the two bank failures were dwarfed by Bank of America Home Loan's ""October 5th disclosure"":http://dsnews.comarticles/bank-of-america-to-cease-wholesale-lending-2010-10-05 that it would abandon the wholesale mortgage lending channel.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.
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