Foxton Lending Closes over Housing Slump
Another one has bit the dust. Asbury Park Press writes:
Foxtons, a West Long Branch-based real estate company that made a splash with its discounted commissions, said Wednesday night it is closing because of a downturn in the housing market.
The company said it is contemplating bankruptcy for an orderly shutdown, and it will continue only with a skeleton crew; it is laying off 350 of its 380 employees.
“The plain fact is that we have been battling against a real estate market that recently has turned into a sharp decline, and the company no longer has the liquidity to operate as a going concern,” said John D. Blomquist, Foxtons’ senior vice president and general counsel.
The decision marks the latest casualty in the softening real estate industry, and it brings a stunning end to a company that was a lightning rod among real estate agencies.
With lenders dropping like flies it’s getting harder every day for borrowers to find home loans. Even states that have come rather unscathed out of the housing crunch (such as Utah) are hard to borrow in. Often borrowers find it useful to take out a Utah home equity loan in order to help build equity in their prior property towards purchasing another home.
Foxtons was a novel lender once, with a flat 2% commission paid by consumers, and salaries issued to employees rather than paying employees with commissions. Apparently such a setup failed to render enough profit to keep the lender from contemplating bankruptcy.
Comments
Leave a Reply
You must be logged in to post a comment.