Accredited Home Lenders and Fremont General Let Go By Auditor Grant Thornton
The murky world of subprime lending has just gotten murkier as noted auditor Grant Thornton has dropped two subprime lenders from its client list. The firms Accredited Home Lenders Co. and Fremont General Corp. were told yesterday that “they no longer meet our requirements for client acceptance”.
For an industry that is beset by woes and facing severe trouble in the marketplace and funding markets, this lack of trust by its auditor could spell the end.
The two lenders, Accredited Home Lenders Holding Co. (Charts) and Fremont General Corp (Charts)., said separately Monday that Grant Thornton had resigned as their auditor after advising them that it needed to “significantly expand” the scope of its audit of their 2006 financial statements.
Accredited, Fremont and other lenders to home buyers with weak credit histories have struggled in recent months amid rising defaults and a downturn in residential real estate. News of Grant Thornton’s resignation comes on the same day that New Century Financial Corp., a leader in the once-booming subprime lending industry, filed for bankruptcy.
After the two lenders disclosed its resignation, a Grant Thornton spokesman confirmed that the same reason was behind both resignations. “We have informed Fremont General Corporation and Accredited Home Lenders they no longer meet our requirements for client acceptance,” the spokesman said via email. “As a result we have resigned as auditor for both companies.” via CNN
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