Opteum Stops Taking Applications For Wholesale Channel

Real Estate Investment Trust (REIT) Opteum Inc. has announced that it has stopped accepting new applications through the conduit and wholesale mortgage origination channels at its subsidiary, Opteum Financial Services LLC, effectively shutting down those businesses.Opteum suggested that the actions are mostly the result of both deterioration in the secondary market for closed mortgage loans and a long-term weakening of consumer demand for mortgage products and services. "In the last month or so…the secondary market for mortgage loans has experienced significant distress and substantially increased volatility that was initially precipitated by lax underwriting standards, early payment defaults and high delinquency rates involving subprime mortgages and concerns over the general state of the U.S. housing market," said Jeffrey J. Zimmer, Chairman, President and CEO of Opteum Inc. "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 (Opteum) 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 (Opteum),” Zimmer continued.“Because we believe that the current adverse market environment may continue in coming quarters, we intend to exit the Conduit and Wholesale mortgage origination businesses." The Florida-based REIT also said the action will not affect the continued origination of loans through its network of 230 retail loan professionals in 24 offices across Georgia, Florida, Illinois, New Jersey and Massachusetts.