In announcing its financial results for 2010, Xceed Mortgage stated that it will suspend origination of insured mortgages through its broker network and that its application to become a regulated financial institution will continue to remain on hold.
According to Xceed chairman Ivan Wahl, while the company was encouraged by signs of a strengthening economy earlier in the year the tightness of credit markets, the cost of financing new mortgages through the insured mortgage broker channel became increasingly costly, particularly in the fourth quarter. Originations in the fourth quarter were down to $51.1 million from $93.1 million in the third quarter and $130.3 million in the fourth quarter of 2009. For 2010 originations through external brokers totaled $228.4 million compared with $374.2 million in 2009.
“As the result of the difficult market conditions, the spreads available on insured mortgage originations through the broker channel have significantly tightened and [Xceed] has seen declines in its mortgage volume. We also have seen a reduction in the number of mortgage aggregators in the market who are willing to purchase mortgages at competitive rates,” said Wahl in a released statement.
“In view of the current market conditions, effective January 14, we will suspend the origination of insured mortgages through our network of external brokers. We will continue to manage our $1.6 billion of mortgage and other assets under administration, and will continue to offer renewals and refinancing through our internal sales group.”
It was also announced that Michael Jones, president and COO was appointed president and CEO. Wahl will remain as chairman and as an officer of the company, responsible for strategic corporate development.