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Shock as beleaguered lender shuts down new lending, cuts 500 jobs

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Mortgage Professional America | 15 Oct 2013, 07:00 AM Agree 0
A mortgage company beset by FTC violations and federal lawsuits has axed nearly 500 employees, and announced it will cease new lending
  • dc | | 15 Oct 2013, 08:15 AM Agree 0
    I used to work for them. It didn't take me long to determine they were overcharging and screwing our veterans.
  • Mark | | 15 Oct 2013, 08:27 AM Agree 0
    I am not surprised that they are shutting down anytime you have unrestrained government regulations busuness will suffer and the public will pay.
  • Paulsmoney | | 15 Oct 2013, 08:38 AM Agree 0
    It sounds as if this outfit was 'part of the problem' as perceived by the idiots Dodd & Frank.

    Ironic that being unable to function in what may be their normal questionable fashion, they blame the inability to figure out compliance as their ultimate demise.

    Well for a lot of honorable and ethical and viable lending resources we are now all strangled with Dodd & Frank, thanks to your business model (and similar others I am certain)Mr. Edwards
  • rdf | | 15 Oct 2013, 08:40 AM Agree 0
    The company also ""suggested"" to consumers that they could get no-cost fixed-rate mortgages... AND 5.4 million spam calls??? well, they were working, gotta hand that to them.....say no more... and sayonara
  • J. Scott Harris | | 15 Oct 2013, 08:51 AM Agree 0
    This time the regulators got it right...
  • John | | 15 Oct 2013, 08:51 AM Agree 0
    It is sad how some companies market to Veterans. USAA is an example of an organization that relentlessly advertises and provides little value to Veterans. Message: if you are being sold to just because you are a Veteran please hold onto your wallet.
  • Jim in CT with little sympathy | | 15 Oct 2013, 09:05 AM Agree 0
    Good riddance. Our vets deserve better than this.
  • steven | | 15 Oct 2013, 09:11 AM Agree 0
    when the chairman "lays the blame solely on Dodd-Frank" and can't find any reason that he is to blame... shame on him.
  • Max | | 15 Oct 2013, 09:12 AM Agree 0
    Agree with dc. We have had dealings with their tactics in the past. This has nothing to do with Dodd-Frank. It is a plain-vanilla old-school FTC violation. To suggest that they can't get the technology is absurd. The tech for the Do Not Call list is nearly free, and suggesting that they do fixed mortgages when they don't...well, you decide.
  • Larry | | 15 Oct 2013, 09:22 AM Agree 0
    If they are one of the jerks who call me with their robots continuously on every phone line I have including my Mortgage business line then they deserve to be shut down, spammers need to go!
  • Tom | | 15 Oct 2013, 09:23 AM Agree 0
    More of the VA lenders who pay for the top spots on Google, Bing, etc... shold also follow these guys out of business. Lure vets in and give them poor sevice.
  • John Defrancisco | | 15 Oct 2013, 09:27 AM Agree 0
    Sadly, we've concluded that it's no longer cost-effective for us to originate new mortgages for our nation's veterans, nor do we understand how to implement these new government guidelines,"

    Sadly, we have concluded that we are not longer able to rip off our nation's veterans, nor can we figure how to get around the new rules.
  • Bob Gillespie | | 15 Oct 2013, 09:47 AM Agree 0
    Edwards and his cronies should be hung by their nads and beaten like piñatas for screwing our Vets. VA is in part responsible for not policing the industry jerks.
  • Jim in Connecticut | | 15 Oct 2013, 09:50 AM Agree 0
    Author Adam, writing an article sympathetic to a ripoff company does neither you nor MPA any service and does not enhance credibility.
  • WLHarris | | 15 Oct 2013, 11:35 AM Agree 0
    I think we will probably find out that the owners have been banned from doing mortgages... effectively shuttering the business. The statement is obvious BS.
  • Phil Corvinus | | 15 Oct 2013, 12:34 PM Agree 0
    I agree with all the comments , its a pity that most of the stock brokers involved in the sub-prime fiasco did not follow this example and close their doors.The brokers , Standard & Poor and other rating agencies did NO due diligence as required by law,Only because had they done so the securities would have been worthless, and unsalable,hence NO DUE Diligence. They all should have been prosecuted & sent to jail.

  • Marcia | | 15 Oct 2013, 01:19 PM Agree 0
    They exploited our Veterans by putting them in ARM mortgages with historically low fixed interest rates. That in and of itself is criminal.
    Horrible and give the mortgage industry a bad name.
  • Chris | | 15 Oct 2013, 02:23 PM Agree 0
    Reminds me of the good ol boys at Allied. Good riddance you pack of thieves.
  • Joanne | | 15 Oct 2013, 02:37 PM Agree 0
    This very said, however, where were the controls in place by VA when Loan Guaranty was being requested. Put a Veteran on an
    arm and VA did not notice?
  • justin in the biz | | 15 Oct 2013, 02:52 PM Agree 0
    Mark you hit this one on the head. The Frank Dodd reform is killing the industry, and yes you better believe the consumer is paying. There are thugs in any line of work. Dont relate the two so easily. Refinancing is way down, period. These types of layoffs will follow very quickly by other, larger, banks/lenders. FYI or "this just in" if you will...this is not news. The FCT , CFPB, and any other consumer protection bureaus you want to through out there slap the hands of these banks everyday. That is a fact, so is the fact that Barney Frank Bill needs repealed. That is what the public really needs to know. #youdbeshocked
  • Joanie | | 15 Oct 2013, 02:59 PM Agree 0
    Wait a minute!! A preliminary package is sent to the borrower and should be reviewed, then at closing, the note and Hud also can be reviewed. There's all sorts of paperwork that indicates an arm rate. Let's not all jump to unfounded conclusions. As a notary, I've closed many arm mortgages for vets, pointed it out to them, and that is what they wanted.
  • Steve | | 15 Oct 2013, 03:41 PM Agree 0
    Bill Edwards was very clever in fleecing the vets with his technology but ask him to use technology for compliance and he pleads ignorance. What a jerk! Thanks for f-king it up for the rest of us. You A--hole.
  • Paulsmoney | | 15 Oct 2013, 05:30 PM Agree 0
    An ARM isn't necessarily a bad mortgage, just a mortgage that should be used for situational lending, usually short term, not over three years the way I used to advise. Unfortunately,a new homeowner's 'situation' may change, throwing out the timeline once thought to be perfect, and now you have someone thinking they got a crappy mortgage, crappy lender.

    The back-end spread, to the best of my recollection, with VA and FHA ARMs is not as flexible as conventional ARMs so it is easy to bump the rate a taste, and make a much larger YSP or whatever you guys are calling it today thanks Dodd&Franks.

    Existing guidelines allowed for certain borrower costs to be paid with the use of the YSP. Whether that happens is a matter of truth-in-lending follow through on your HUD-1.

    There is no excuse to introduce the mortgage as a fixed product and do the bait and switch to an ARM. That is the sign of a crap-lender
  • Anne James | | 15 Oct 2013, 05:50 PM Agree 0
    dc said it: 'used to work for them...didn't take long to determine they were overcharging and screwing our veterans.' VA mortgages are a big niche for me and happy to serve and not rip off any borrower. That said, I AM thinking of changing my party registration so my CFPB audit (coming to all soon) will go easier.
  • Randy | | 15 Oct 2013, 10:46 PM Agree 0
    I worked for MIC on and off since 2005 I finally came to my senescence and decided to leave the company with dignity and with what little moral conscience I had left. Don't let Mr. Edwards foul you with his crafty wording. This shutdown has nothing to do with with Dodd-Frank or technology obstacles. The guy is a multimillionaire, you don't think he could pay for a solution? They simply realized they were no longer going to get away with their sleazy business tactics. The mortgage industry is a highly respectable line of work and MIC has no place in the realm of RESPECT for Veteran, its employees, or the mortgage business. This guy is the epitome a wealthy slime-ball! MIC's sales tactics and crafty financial presentation has been perfected over the years...effective? Sure... morally right? NO WAY. Mr. Edwards and his company has undermined our nations veterans year after year after year. As a former employee I faced many incidences that were questionable all the while still feeling the pressure from upper management to sell every deall! I quit working for this company and I'm damn proud of my decision. To the FTC, dig deep, there is much to found. And to all LO's now jobless...just be glad you don't have to drive 200 miles one way just to have the door slammed in your face by a smart Veteran!!
  • Elise | | 16 Oct 2013, 09:38 AM Agree 0
    I agree with John and Max... good riddance! There is no excuse for ripping off veterans or any other borrower by saying we didn't understand the DNC rules and can't figure out the new regulations. What idiots and they have given all of us a nasty black eye! 2 bad for the layoffs, but why anyone would want to work for or associate with such morally low life lenders is beyond me.
  • wh | | 16 Oct 2013, 03:40 PM Agree 0
    Time after time they called my husband and myself for a VA refinance. We are on the no call list. I told them several times to stop calling.....if I wanted a refinance I would do it through the company that I work as a mortgage officer for.
  • DB | | 16 Oct 2013, 07:16 PM Agree 0
    I worked for the company for over a year. The corporate office used high pressure tactics to close the deal while the rep was in the home. No sales were not accepted and if we didn't close a mortgage that day we were given the next day or 2 off without an appointment. I have been is sales for over 30 years and didn't agree with their high pressure tactics. They had a pitch book to follow and Bill said just read the script and you will close the deal. He named his expensive sailboat "3 Points" because that is what he made on each mortgage and only paid his reps 35 bps. I knew that company model would never last and glad to see them gone
  • Ken | | 18 Oct 2013, 08:35 AM Agree 0
    If the VA Arm is such a bad deal then why is it offered by almost every Loan Company? Why is it Fixed to the Treasury Bill? What is the average rate a Veteran is paying on the VA Arm to Date?
    Tough questions for you huh? Might want to think it out.
  • Chris | | 18 Oct 2013, 09:03 AM Agree 0
    Ken, as I understand the story, lender solicited fixed rate mortgages and try to close them as ARMS. Bait and switch is not cool. Not complying with the do not call is also not cool. Customers should be offered options not just an ARM when fixed rates are so low. The owners of the company made their money and bailed.
  • Ken | | 18 Oct 2013, 09:51 AM Agree 0
    No the lender was fined for the DNC list. Can you answer my question? What is the only mortgage that the payment will reduce if you add money on the principle? and the other questions in my original post?
  • Ken | | 18 Oct 2013, 09:58 AM Agree 0
    Chris- dont know where you got that - It was a FINE for DNC. And by the way Bill Sold the company in March so Shutting it down only hurts the Bank that bought it. He has already been paid.
  • being human | | 22 Oct 2013, 08:49 AM Agree 0
    im sure they will go into reverse mortgages. since the lenders are able to charge 5 to 7 points on each mortgage.
  • Bill M | | 28 Oct 2013, 01:30 PM Agree 0
    So the crooks that made all of the money can just slither away and find another scam. I would really like to see Edwards and his cohorts serve some hard time and pay some big fines.
  • JOE M | | 20 Nov 2013, 10:24 AM Agree 0
    We need to see owners who contibuted to
    this crisis prosecuted, ie Anthony"alwys tan"
    Mozillo, former CEO Countrywide, fines just go to the Treasury, hold PEOPLE accountable.
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