Universal Mortgage, a nonbank lender in Mequon, Wis., is closing down after failing to find a private-equity investor willing to pump capital into the $4 billion servicer.

Company President Ron Huiras confirmed that a "sale did not go through," adding, "we'll be winding down the operation." He said Universal was hurt by loan buyback requests from secondary market investors. "Buybacks were part of the problem, absolutely," he said.

Investment banking sources said that at one time Phoenix Capital of Denver was shopping around the company and/or its servicing portfolio.

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