In your opinion, what will this relapse do to mortgage markets?

It’s likely to get bloodier this year and into the next — many more lenders will go out of business. I’d expect to see wholesale and correspondent lending practically disappear, especially in non-conforming marketplace. Retail origination will take center stage as lenders retreat to a channel they feel they can better control. And that will accelerate job losses in the mortgage sector.

Many companies that survived this first wave will catch their breath just in time to be hit again — and many won’t be ready for it. Others, like Countrywide, know what’s coming — the question is whether they’ve done enough to be able to ride it out.

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First National Bank of Arizona has become the latest casualty in the mortgage collapse that is gripping U.S. lenders. The privately held bank has shuttered its wholesale mortgage lending division, according to mortgage brokers who have spoken with the lender.

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NEW YORK, Aug 17 (Reuters) - Amstar Financial Holdings Inc. (AFLH.PK: Quote, Profile, Research) said on Friday that its Amstar Mortgage Corp. unit was laying off most of the office staff at its corporate headquarters in Houston.

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KANSAS CITY, Mo., Aug. 17 - As we disclosed previously, the tighter guidelines and adjusted pricing we have adopted will reduce loan originations until the secondary market shows signs of normalizing. This reduction in force includes stepping back temporarily from pursuing new loans in the wholesale market, a decision we are also seeing among some of our peer companies. For now, we believe this is the right thing to do economically. Our retail channel will be the dominant source of new loans in the coming months. We will follow through on the funding of loans already approved through the wholesale channel."

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