Subprime Meltdown Report: Atlanta’s SouthStar Funding Shuts Doors
Another subprime lender has closed their doors. SouthStar Funding out of Atlanta has thrown in the towel. What is interesting is this company was not forced into closing its doors by bankruptcy, instead it was because the landscape of subprime and Alt-A financing looks so bleak.
The term Alt-A is quickly entering the landscape, which is scary for many borrowers. It is not that hard to get ones credit out of the subprime territory, but Alt-A is the land between prime and subprime. Many borrowers live in this land and they would be unable to rectify their credit to the higher level to refinance their mortgages. If Alt-A goes away, we may have bigger problems ahead.
Atlanta-based SouthStar, which offered subprime and other mortgage products, closed out all accounts Monday after its investment partners cut off financing because of payment defaults. SouthStar told its customers in an e-mail that it would cancel any pending closings.
”We really felt like we could weather the storm and that we would outlive some of the competition,” said Tyler Wood, SouthStar executive vice president and director of governmental affairs.
“Wall Street’s appetite for the Alt-A and subprime market disappeared.”
The subprime market caters to customers with poor credit, while Alt-A is a category between prime and subprime. The subprime market has been besieged by payment defaults and those credit woes have crept into the Alt-A market. via MiamiHerald.com
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Comment by Marc Brinitzer on 4 April 2007:
I blogged this topic the other day and had several former SouthStar employees stop by and comment. Mark Clay provides some interesting insight into how the game works. Check it out at SouthStar Funding
Comment by Adeline Brummett on 11 December 2007:
I am a realtor with RealLiving Sterling Properties. I am searching for info re: property that the owner went bankrupt on 2+ years ago. SouthStar Funding held the mortgage but they are no longer in business. Can you point me in the right direction. The house is setting empty at this point. I have a potential buyer for the property.
Thanks for your help.
Adeline Brummett