Mortgage firm to let most of its workers go

Kirkland-based mortgage company Merit Financial will meet with its 300 employees this morning to let most of them go as executives decide whether to file for bankruptcy, according to two people familiar with the company's plans.

Merit Financial will keep a skeleton staff to process loans in progress, but otherwise will be working to liquidate the company, said the sources.

Merit was founded in 2001, making residential loans during a hot real-estate market. It grew quickly from a company with 12 employees and $50 million in loan volume its first year to passing the $2 billion mark in cumulative loans last May, after just four years in business, according to the company's Web site. At that time, it had 430 employees and planned to hire more.

Like others in the mortgage business, Merit fell on hard times as the refinancing market dried up. Six months ago, it laid off about 20 people in its lending division and stopped making loans itself, acting only as a broker.

The problems at Merit are peaking just two days after Ameriquest, one of the country's largest lenders to people with blemished credit, announced the elimination of about a third of its work force — 3,800 people.

Rising interest rates and declining demand for mortgages are expected to lead to more job losses at mortgage firms.

CEO and founder Scott Greenlaw, a Huskies football star from 1991 to 1995, could not be reached for comment. He started Merit in 2001 after working for three other real-estate firms in three years, according to a recap of his football career in The Seattle Times in 2004.

Seattle Times researcher David Turim contributed to this report.