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Failed Securitization Sends Delta Financial Into Ch. 11

Law360 (December 7, 2007, 12:00 AM EST) -- The mortgage market downturn has finished off another company, as mortgage loan originator and securitizer Delta Financial Corp. revealed Thursday that it plans to stop taking mortgage applications and file for Chapter 11 bankruptcy protection.

The Woodbury, N.Y. company recently failed to complete an important securitization transaction that would have provided it with the funding needed to continue its operations. Consequently, Delta received notice from its warehouse lenders that “events of default” had occurred under their agreements, the company said in a statement.

“Under these circumstances,...
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