In some news that might have passed some unnoticed last week in the structured settlement industry the factoring nemesis of our profession, JG Wentworth laid off over half of it's employees last week and announced the closing of it's Las Vegas, NV operations center.
While i'm not exactly pro-factoring, i'm certainly not anti-factoring, as my support of responsible pricing, advertising and disclosure of factoring indicates. However, i've long felt that JG Wentworth and their massive advertising campaigns have clouded the message and value of structured settlements, often making it seem as if people are "trapped" in their structures or are some how being cheated by those who recommended they go into a structure.
Now to suddenly have the air waves silent, the silver haired " It's your money, use it when YOU want it" guy having been shuffled off to the retirement home, it seems almost surreal to think that Wentworth is desperately seeking cash to keep it's operations open and to fund the purchase of more annuity contacts.
I'll be doing several follow up stories on how this came about, but in short form, simply understand that the freezing up of the asset backed security market and the total aversion to risk investors have right now has ended their financing operation for now. Only time will tell if they survive this market turmoil, but you can be sure this will be a gloomy Christmas for a lot of the employees who are being laid off just before the holidays.
Watch for our series on factoring, NASP and other issues related to the purchase of structured settlements early next week.