The demise of a Michigan lender has given warehouse lenders more reason to be skittish about extending credit.

It came out in the well-publicized bankruptcy case that MCA Financial Corp., based in Southfield, had double-pledged some collateral to its lender. Though the extent of the problem remains unclear, the possibility that the collateral was not what MCA said it was has caught warehouse lenders' attention.

"Anything like that is going to make a lender much more cautious," said Larry Pendleton, managing director in charge of warehouse lending at Residential Funding Corp., a unit of GMAC, which participated in the warehouse line to MCA. Mr. Pendleton declined to comment specifically on the MCA case.

Deliberate double-pledging is fraudulent, but Patrick S. Quinlan Sr., the former chairman and chief executive officer of MCA, said it was accidental in this case.

Southfield-based MCA fired its 900 employees and went into conservatorship in January after its warehouse lenders refused to renew its two lines of credit, which totaled $210 million. The company filed for Chapter 11 bankruptcy protection last month.

MCA's profitability declined last fall when secondary market prices for subprime loans slid to 101% to 102% of face value, from 105%, said Timothy Skillman, a principal of BBK Ltd., the turnaround firm that has taken over MCA. He estimated losses for all MCA's creditors-not just those in the warehouse lines-were roughly $90 million.

Mr. Quinlan, the former MCA chairman, said MCA discovered on Jan. 12 that about $1.5 million of mortgages had been "shipped twice" to Chase Bank of Texas, the lead bank on both its warehouse lines. MCA later discovered another $2.9 million of double-funded loans, Mr. Quinlan said. "It was an innocent issue that they shipped those loans twice to Chase," he said.

BBK's Mr. Skillman said his company, which is also based in Southfield, has ordered 3,500 title searches to determine which lenders have the rights to the collateral.

Robert Salcetti, managing director of corporate mortgage finance at Chase Bank of Texas, a Chase Manhattan Corp. subsidiary, would only say that "the issues on MCA were not related to the subprime mortgage industry."

Even before MCA closed, warehouse lenders were jittery from the collapse of the subprime and high-loan-to-value home equity markets in the fourth quarter, which resulted from the larger global liquidity crisis.

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