HomeBanc to end mortgage loan origination business

By Lisa Kerner

Charlotte, N.C., Aug. 7 - HomeBanc Corp. is unable to borrow on its credit facilities and could not fund its mortgage loan obligations as of Monday.

Now the company said it intends to exit the mortgage loan origination business.

HomeBanc is not expecting to fund any future mortgage loans and stopped accepting mortgage loan applications and funding mortgage loans previously originated.

HomeBanc agreed to have Countrywide Financial Corp. acquire certain assets related to its retail loan origination operations, including up to five branches in Georgia, Florida and North Carolina, while retaining most of HomeBanc's retail loan originators. The transaction is slated to close by Aug. 10.

"In light of the extraordinary difficulties that HomeBanc continues to face in the mortgage loan origination market, we feel that it is in the best interests of the company to exit this business so that we can focus on preserving the value of our investment portfolio assets and loan servicing operations," HomeBanc president and chief executive officer Kevin D. Race stated in a company news release.

As previously reported, HomeBanc and its subsidiary HomeBanc Mortgage Corp. amended their master repurchase and master loan agreements with JPMorgan Chase Bank, NA.

HomeBanc's common stock and its 10% series A cumulative redeemable preferred stock were suspended by the New York Stock Exchange on Monday based on the "abnormally low" trading price.

HomeBanc is an Atlanta-based mortgage banking business.

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