HomeBanc leaving mortgage business

LAWRENCEVILLE - Increasing delinquency rates and foreclosures have hit several large mortgage companies hard this week and have, in turn, left some Gwinnett employees and homebuyers in flux.

Atlanta-based lender HomeBanc Corporation announced this week it would exit the mortgage loan origination business, and company spokesman Mark Scott said Thursday it is still unclear what will happen to the company's office in Buford.

The office employs 40-50 people, primarily loan officers and processors, and will either be acquired by Countrywide Financial Corp. or will shut down, Scott said.

Countrywide, another major lender, said Tuesday it will acquire five of HomeBanc's retail loan branches and hire a significant number of HomeBanc's retail loan originators. Scott could not specify Thursday which branches would be acquired. Countrywide did not return a message left Thursday.

HomeBanc also announced that any clients currently in the process of obtaining a loan from HomeBanc would now have their loans examined by Countrywide.

"Customers who are currently in the pipeline but haven't closed, Countrywide will be taking a look at those loans and writing them according to their standards," Scott said.

HomeBanc will continue to service its current loans, Scott said.

HomeBanc has not been alone in its problems this week, with major lender American Home Mortgage announcing Monday it was filing for Chapter 11 bankruptcy protection. Houston-based Aegis Mortgage and Cleveland-based National City Corp. also announced they will suspend applications for new loans.

Local Realtors say buyers are feeling the effects of troubles in the mortgage industry.

"It has a ripple effect with all the mortgage companies closing," said Lin Stadler-Perry, a Realtor with Century 21 All Atlanta Inc. in Lawrenceville. "People who were going to close (on a home) in the next couple of weeks, it means they're going to have start over."

Stadler-Perry said she has seen a tightening of mortgage loan guidelines over the last month, which is affecting potential buyers with borderline credit.

Mack Perry, a Realtor with RE/MAX Around Atlanta Duluth, said the subprime market, which focused on buyers with weak credit histories, has almost disappeared in the county.

"What we're seeing now is that the prospective clients with good credit are not going to have any trouble," Perry said. "The clients with questionable credit are having more trouble getting a loan."

Foreclosures in Gwinnett have risen steadily in 2007, jumping 26 percent when compared to the first eight months of 2006 and 47 percent from the same period in 2005, according to foreclosure numbers kept by the Gwinnett Daily Post.

And it may not be over yet, some in the industry say.

"A lot of adjustable (mortgages) and things like that are just starting to hit ... so we're probably going to have another year or two of the heavy foreclosures," said Tony Mitchell, director of The Impact! Group's home ownership center in Duluth. "That's why the market is so shaky right now - because they haven't seen the bottom hit yet."

Mitchell said he hopes to see more people coming to The Impact! Group, a local non-profit organization, for help in the future. Mitchell said his group provides counseling and will also work with buyers and lenders to work out agreements to get the buyer back on track with payments.

"Hopefully we learned a little something from this, because too many people got hurt," Mitchell said. "There should have been recommendations for some clients to be better prepared before they moved in."