HomeBanc Shifts Focus to Servicing Side of Business.

ATLANTA -- Back in January of this year, Kevin D. Race was promoted from president to chief executive of HomeBanc Corp. here to oversee the long-troubled company's streamlining of operations.

When the promotion of Mr. Race was made, HomeBanc had also finished a strategic alternatives review process that resulted in the company deciding to remain a standalone entity and not pursue a sale.

In the first quarter of this year, HomeBanc had a net loss to common stockholders of $23.8 million, or $0.42 per share.

This came after net losses of $11 million in 2006, $11.6 million in 2005 and $48.3 million in 2004.

But now, as market forces have caused a liquidity crunch affecting a growing number of lenders, HomeBanc has been forced to leave the mortgage loan origination business. It was mostly a prime and alt-A lender.

In a statement, HomeBanc admitted not being able to borrow on its credit facilities and thus had not funded any loans starting on Aug. 6. It will not fund any future loans nor fund any loans previously originated but not yet funded.

The company did agree to sell certain assets related to its retail mortgage operations, including up to five branch offices, to Countrywide Financial Corp., Calabasas, Calif. Countrywide said it is not paying a cash premium.