Another one bites the dust.
NEW YORK, Aug 10 (Reuters) - Mortgage lender HomeBanc Corp (HMBN.PK: Quote, Profile, Research) has filed for Chapter 11 bankruptcy protection, two days after agreeing to sell most of its assets to Countrywide Financial Corp. (CFC.N: Quote, Profile, Research), and said it plans to shut down.
Atlanta-based HomeBanc listed $5.1 billion of assets and $4.9 billion of debt in a filing late Thursday with the U.S. Bankruptcy Court in Wilmington, Delaware.
“Recent disruptions in the mortgage loan and real estate markets have been dramatic, in terms of both magnitude and timing,” Chief Executive Kevin Race said. These conditions put HomeBanc in an “untenable business position,” he said.
This is a time honored process that's called "taking out the garbage." There are a lot of comnpanies that should have never been in the business, that are no longer. There are companies that made a lot of money making loans that should never have been made...they are no longer.
It's interesting to watch, and instructive. For borrowers, they should ask more about the type of person and company they're doing business with. Loan Officers and loan reps will consider more carefully the business plan of the companies they work for. Wall Street will take a hit, as will some investors.
It make for good theater, at least. It's no financial judgment day.