First Guaranty Mortgage files for Chapter 11 after layoffs
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First Guaranty Mortgage originated $10.6 bln in mortgage loans in 2021
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Laid off 80% of its workforce
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The company blamed a collapse in the secondary market for mortgage refinancing and collateralization
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Reuters) – Mortgage lender First Guaranty Mortgage Corp filed for bankruptcy in Delaware on Thursday, saying it had laid off 80% of its employees and stopped making new loans.
The company, based in Plano, Texas, originated $10.6 billion in mortgage loans in 2021, according to a court filing in its bankruptcy case. It entered Chapter 11 with more than $473 million in debt, largely owed to banks that provided funding for the company’s residential mortgages.
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First Guaranty Mortgage said it incurred significant operating losses and cash flow challenges due to worsening conditions in the mortgage market, including “a dramatic collapse of the mortgage refinance market and the weakening mortgage purchase market,” factors exacerbated by a lack of housing inventory and increasing affordability issues in the U.S.
To read full article visit: https://www.reuters.com/legal/litigation/first-guaranty-mortgage-files-chapter-11-after-layoffs-2022-06-30/
