Local lender shuts hastily amid turmoil in industry
More than 100 local employees abruptly lost their jobs Friday as a Mountlake Terrace-based mortgage lender closed its doors, a victim of...
More than 100 local employees abruptly lost their jobs Friday as a Mountlake Terrace-based mortgage lender closed its doors, a victim of the turmoil in the riskier end of the home-loan industry.
Employees of Mortgage Investment Lending Associates (MILA) said they were summoned to an unscheduled meeting at 2 p.m. Friday in the company's six-story headquarters and given 15 minutes to check their e-mails and clear out their desks.
In their e-mail was a brief message from founder and CEO Layne Sapp, stating that because of market conditions the company was closing down, said two employees who asked not to be named.
"We packed our bags and left in shock," said one, a loan representative.
MILA had a staff of more than 600 nationally as recently as last spring, before a series of layoffs began, said the employees. Companywide, the current staff was 200 to 300, they said.
Company executives did not return phone or e-mail messages Friday evening.
The company, whose MILA sign is visible from I-5 atop a glassy office building, "had done very well in the subprime market," said an employee who worked in re-selling the company's mortgages to investors. Subprime mortgages, made to customers with relatively poor credit, were a booming business until last year.
But increasing defaults among mortgage borrowers chilled the appetite of the big financial institutions that bought packages of loans from the company, and "they were forced to cut MILA off," said that employee.
MILA's Web site claims that it averaged $400 million in loans a month, using a proprietary evaluation system that can give mortgage brokers a commitment on their loan request within 30 seconds. The site says MILA funded mortgages worth $4.5 billion in 2005, and projected an equal volume in 2006.
As recently as Thursday, said the loan representative, company officials allowed employees to take applications from mortgage brokers around the country.
Although the company's automated system for processing and approving loans wasn't allowing mortgages to be funded, said the employee, "They kept telling us it was a computer glitch."
The sudden cessation of business could leave would-be homebuyers in the lurch if the brokers they were working with submitted their applications to MILA.
"It was really hard to look at all that paperwork on our desks knowing they [the brokers] are going to have to go through all that stuff with the borrower again," said the loan representative.
Staffers knew their situation was precarious when the number of mortgages being processed fell from 40 a day to 10, the employee said.
Still, "Layne [Sapp] was really doing everything he could to get things turned around for us," the employee said.
Representatives of a potential buyer recently "spent a week wandering all around the building" to evaluate the company, but no deal materialized.