Local Tucson Lender Halts Funding

As a result of the collapse of the secondary mortgage market, the Arizona Daily Star reported Tucson based mortgage lender First Magnus announced that they will no longer be accepting loan applications or funding loans as of Thursday morning. The retail arm of the company, Great Southwest, hopes to stay in business by brokering loans elsewhere. Unlike American Home Mortgage, who's downfall was attributed in large part to sub prime loans, First Magnus reported that sub prime loans were only a small part of their business. No other specific details were given as to reasoning behind the fall. This now all too common turn of events in the mortgage industry leaves numerous home buyers stranded and unsure of what their loan status is, as well as displacing a large number of the company's employees.

First Magnus in the past had described itself as one of the "largest privately held mortgage banking operations" in the country, lending to in all 50 states. In 2006 the company claimed more then 5,000 employees in 350 offices and it funded over $30 billion. The Arizona Daily Star reported that Magnus Funding ranked 61st in the Star's latest survey of Southern Arizona's 200 biggest employers, reporting more then 800 employees.

These past several weeks in the mortgage industry have caused a widespread panic throughout the nation. Other local Tucson lenders appear to be strong and have no fears of what the future market holds. Still the real estate market continues to be slow as consumers wonder what's in store. Is the explosive media attention to blame for this fear? I think to a certain degree yes. The on going focus on "everything negative" by the media has a strong influence on the consumers perceptions and choices. Still, those buyers that have strong financial backing have the perfect opportunity to use the slowing market to their benefit. It's just a matter of getting out into the market and taking advantage of what's out there.