RI Bank Shuts Wholesale, Cites Low Street Bids

Domestic Bank of Rhode Island closed its wholesale division Monday, citing Wall Street's reluctance to bid any higher than 97 on certain nonconforming loan types it specialized in.A bank memo provided to MortgageWire reports that, "The major Wall Street firms and other national conduits that bid on our products effectively took down all of their product matrices or offerings this week therefore making our ability to accumulate a profitable product type virtually impossible." It adds that the market "took a drastic turn for the worse on March 1st and has left virtually no-bid for any doc type other that full or stated under [a 90% loan-to-value ratio]. Combo seconds are no longer a viable product type either." At deadline time the bank had not returned telephone calls about the matter. The memo, penned by Jeff Moore, a managing director at the bank, adds: "This is one of the worst liquidity crises for the mortgage industry in decades."