MILA, a subprime wholesale lender based in Mountlake Terrace, WA just north of Seattle, closed it’s doors Friday afternoon, leaving the remaining 100+ employees (down from 600 last fall) only 15 minutes to check their emails and clear out their desks. MILA had been making staff reductions as far back as February of 2006.
The Seattle Times reports that a potential buyer of the company spent a week wandering around MILA headquarters, but no deal materialized.
Real estate agents: Loans in process but not yet funded now must be resubmitted to other lenders.
For your reading entertainment, here are a couple of articles from the archives. The ad on the left is promoting a pay-option ARM.
Despite forecasts of gloom and doom, broker innovations have kept the future bright
Layne Sapp, Founder and CEO, MILA Inc.
2005 Entrepreneur of the Year
Local Lending Company Soars
After Flying Under the Radar
Seattle Times Oct 2004
When MILA first started out here locally, they ONLY worked the hard money side of the business. When subprime loan originations skyrocketed, so did MILA’s growth. When the subprime market started to fold this spring, MILA ceased doing subprime loans and instead focused only on the Alt-A and Prime mortgage market. However, there is now tremendous competition for Alt-A and Prime loans.
I question whether or not the company had any duties to notify employees and the general public that they were running out of cash. On the one hand, the company owes duties to its shareholders and any potential buyer NOT to speak too soon about problems that may have a negative effect on the value of the company, especially if cash problems appear to be temporary. On the other hand, what about duties of good faith owed to the general public or to its employees?