Mortgage lender SouthStar in Chapter 7 bankruptcy
NEW YORK (Reuters) - SouthStar Funding LLC, a mortgage lender that earlier this month said it stopped making home loans, has filed for Chapter 7 bankruptcy protection, meaning it plans to liquidate.
On Wednesday, the firm filed for protection from creditors with the U.S. bankruptcy court in Atlanta, where it is based, court papers show.
SouthStar listed more than $100 million of assets, more than $100 million of liabilities, and between 1,000 and 5,000 creditors in its bankruptcy petition.
SouthStar made subprime home loans to people with poor credit histories.
It is at least the sixth U.S. mortgage lender to seek bankruptcy protection since December.
The others -- New Century Financial Corp. NEWC.PK, Mortgage Lenders Network USA Inc., Ownit Mortgage Solutions LLC, People's Choice Financial Corp. and ResMae Mortgage Corp. -- filed to reorganize under Chapter 11 of the U.S. Bankruptcy Code.
More than 30 subprime lenders have sold their businesses, quit the industry or gone bankrupt in the last year as homeowner delinquencies and defaults soared.
