We’ve all heard about the large, publicly traded sub prime lender meltdowns, but I thought I’d highlight a few significant local implosions that have happened in the past couple months. The first high profile mortgage implosion in the Seattle area that I’m aware of happened at the end of last year with Merit Financial. It was run by an ex UW Huskies football player, Scott Greenlaw. During boom times, Merit Financial could be described as one big party where staff meetings turned into keg celebrations of their new found riches. That was then. Now, 400 employees are out of work and company executives are on the verge of bankruptcy, not to mention battling lawsuits left and right. It’s an interesting read:
http://seattletimes.nwsource.com/html/businesstechnology/2003459108_merit03.html
Just two days ago, another private sub prime lender in the Seattle area, Mortgage Lending Associates, shut its doors abruptly, leaving 300 workers just minutes to pack their things. Certainly, business isn’t good for lenders right now, but you have to believe that greed greatly contributed to the demise of these two companies. Said one employee: "We would see things that shouldn’t have been happening," she said Monday. "When we pointed it out, instead of being grateful, they’d get mad at us." The articles certainly alluded to some of the arrogance and greed of the founders of these two companies, who just so happened to win awards for excellence in business. Hmm.. where have we seen all this before?
Here’s the full article: http://wwww.examiner.com/a691341~Lauded_Mountlake_Terrace_subprime_mortgage_wholesaler_collapses.html
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