Aug. 26 (Bloomberg) -- Carteret Mortgage Corp., a closely held mortgage broker that originated more than $4 billion in loans in 2006, plans to close in several weeks, said Chief Executive Officer Eric Weinstein.

``We ran out of money,'' Weinstein, 49, said in an interview today. ``We're not technically out of business yet, but we're winding it down and trying to do the best we can for everybody.''

More than 100 lenders have halted loans, closed or sold themselves over the past 18 months amid the worst housing market since the Great Depression. Weinstein said the Centreville, Virginia-based company has about 800 employees, including 40 at headquarters.

``You should definitely seek other employment immediately,'' Weinstein said in an e-mail today to the employees. ``I would expect that you have about 30 days to close your loans before it starts getting bad,'' he said, signing the note ``Eric `Shut the Lights' Weinstein.''

Foreclosures are expected to hit a record 2.5 million this year and next, according to the Mortgage Bankers Association, cutting demand from investors who buy mortgage-backed assets.

Weinstein founded the company in 1995 and expanded to more than 4,500 employees by 2003 when annual loan volume peaked at more than $4.7 billion. The company's business model allowed employees to work from home and earn income by recruiting and managing other workers, Weinstein said.

Hoping for Turnaround

Weinstein retained employees this year hoping for a turnaround that hasn't happened, said Paul Skeens, president of Colonial Mortgage Co. of Waldorf, Maryland. Skeens was a top- producing broker at Carteret during eight years at the company before leaving this year to start Colonial, according to Weinstein.

``You can't take a $3.5 trillion industry, turn it into a $1.8 billion industry and maintain your staff,'' Skeens said. ``Eric knew last year that it was going to get tough and he tried to cut back, but no one knew how bad it was going to get.''

Carteret operates in 45 states and must notify regulators of its plans, Weinstein said. The company surrendered its mortgage lending license in Virginia on July 1, while maintaining its license for brokerage, said Kenneth Schrad, a spokesman for the Virginia Corporation Commission.

To contact the reporter on this story: David Mildenberg in Charlotte at dmildenberg@bloomberg.net

Last Updated: August 26, 2008 16:31 EDT