Mortgage company failures declined markedly in 2010, although closings of banks and credit units trended upward, according to a new report.
A total of 22 nonbank mortgage companies failed in 2010, down from 70 the year before, according to the newly released "Mortgage Graveyard" report from Mortgage Daily. With banks and credit unions included in the mix, a total of 201 mortgage-related companies shut their doors, down from 230 in 2009.
At the same time, failures among banking institutions were up, with 157 FDIC-insured banks closing during the year, up from 140 the year before. A total of 22 credit unions failed in 2010, up from 20 the year before.
Among the notable closures was the decision by Sir Richard Brandon to shut down his Virgin Money US venture after only three years, including its mortgage operations. Only last year, Branson indicated the company was expanding operations.
"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," Branson said at the time.
Other major closings in 2010 were Bank of America's decision to eliminate the wholesale mortgage business it had acquired from Countrywide. Bank of America previously eliminated its own wholesale division in late 2007, shortly before the Countrywide acquisition.
Premium Capital, which operated as TopDot mortgage, ceased to write new mortgages after losing Ginne Mae and FHA certification, and several branch managers were indicted over nearly $6 million in fraudulent financial transactions. Wells Fargo also eliminated its nonprime portfolio operation in July, a move that affected some 4,000 employees