Ownit Mortgage Solutions Inc., a subprime mortgage lender, filed for Chapter 11 Bankruptcy in San Fernando Valley Federal Court late last week.

The Agoura Hills-based lender, which employed about 800 people nationwide and specialized in making loans to borrowers with poor credit or limited incomes, told employees in December that it was closing its doors immediately and had no money to pay anyone.

Ownit’s Chapter 11 petition did not include an explanation for why it decided to file for bankruptcy protection but the Los Angeles Times reported the filing was in response to lawsuits filed by creditors.

Ownit shot to success over the last few years and quickly became the 11th largest wholesale, subprime mortgage lender in the country, according to new loan volume, in the first half of 2006.

The privately held company said it relied heavily on Wall Street to fund its loans; securities firms buy the loans and sell pieces of them as securities. But last month defaults on the loans began to spike and the Wall Street firms began to seize millions of Ownit’s capital as compensation for the losses. The company was unable to turn around after Wall Street shut the money off, the company’s Chief Executive, William Dallas, said.