A top reverse mortgage lender that unexpectedly halted operations Friday will also lay off more than 100 employees, including its founder and CEO.
Live Well Financial, as recently as February among the nation’s top 10 reverse lenders, posted a notice on its website that as of May 3 it would “cease to originate mortgage loans” due to “unexpected circumstances.”
The Virginia-based company has also filed a notice with the state that it is laying off 103 employees, most of whom work in its Chesterfield, Va., headquarters, according to a report by The Richmond Times-Dispatch. The layoffs included company founder and CEO Michael C. Hild.
In its notice to the state, the company said it lacked the available cash to continue originating loans.
“Due to sudden and unexpected developments in the markets for certain financial assets the company uses as collateral for certain credit facilities to provide this liquidity, these lenders have reduced significantly the amount of liquidity they make available to the company,” Paula Foster, Live Well Financial vice president, controller and human resources director, wrote in the notice. “This reduction in credit availability combined with the challenging conditions in the market for mortgage loans, which were conditions outside the company’s control, along with related regulatory issues, haver resulted in the company having insufficient available cash to continue operations.”
Foster insisted that the company had exercised “commercially reasonable business judgment” but “could not reasonably forsee” the circumstances that led to its closure, the Times-Dispatch reported.
The company was founded in 2005 and at one time originated and serviced more than $2 billion in loans, according to the Times-Dispatch. In February, it was the number-seven reverse originator in the country, according to a report by Reverse Market Insight.
Live Well Financial did not respond to MPA requests for comment.