Opteum Out of Wholesale and Conduit Lending

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The rumblings were partially correct. Opteum is exiting the wholesale and conduit lending market. They will keep retail intact for now. Marketwatch reports on the announcement made by Opteum today.

Opteum Financial Services, LLC ("OFS"), intends to exit its Conduit and Wholesale mortgage loan origination businesses. OFS has ceased accepting new applications in each of these origination channels, effective immediately.

The company will keep originating prime loans through a very small network of retail loan officers.

OFS continues to originate high-quality loans through its network of 230 retail loan professionals located in 24 offices throughout Georgia, Florida, Illinois, New Jersey and Massachusetts. Additionally, the Company’s $2.9 billion REIT portfolio today consists entirely of Ginnie Mae, Fannie Mae and Freddie Mac agency securities.

My friends who work at Opteum in Orange County have this big announcement coming to them this morning when they walk in the doors. The Orange County operations handle a large chunk of Opteum’s wholesale and conduit lending. In the statement from Opteum on the move, Opteum CEO Jeff Zimmer cited changes in Wall Street’s hunger for Alt-A loans as a large culprit.

Recently, some secondary market investors in closed mortgage loans have changed their terms and have delayed settling whole loan trades involving certain Alt-A mortgage products. This has forced OFS to re-market loans in respect of which it believed it had already obtained purchasing commitments, and has resulted in an estimated $22 million pre-tax loss associated with mortgage loans originated by OFS.

Read the complete filing here.