Mortgage Market Tumult Pushes Pimco-Backed Home Lender Into Chapter 11

Residential lender First Guaranty Mortgage Corp. filed for bankruptcy, citing worsening conditions in the mortgage market as home sales slow and fewer home borrowers refinance due to rising interest rates and tight housing supply.

First Guaranty cut 471 jobs, nearly 80% of its workforce, and ceased loan originations ahead of Thursday’s chapter 11 filing. The bankruptcy has no effect on closed mortgages, which are served by third parties, according to the company.

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