Anger at Central Pacific Mortgage
UPDATE: Housing Wire
From News10:
Former employees of Folsom-based Central Pacific Mortgage are angry over the lack of warning before this week's layoffs. As News10 first reported Tuesday, Central Pacific Mortgage and its Florida-based division Ivanhoe Mortgage closed their doors Monday saying they had no money to meet Wednesday's payroll.Watch the video here. Some snippets that sound like they could have been ripped from Housing Panic:
An estimated 260 people in Folsom, Orlando and in branch operations centers in other parts of the country were told on Monday to clear out their desks by the end of the day...One branch manager from an eastern state who asked not to be identified told News10 he lost $33,000 in commissions.
"The moral thing to do would of been to at least give the little people a fair warning," said one former Ivanhoe employee by email.
...
In a memo to employees on Monday, Central Pacific Mortgage president and CEO John Courson said "there are no words to express my sorrow."
...
News10 attempted to contact Central Pacific Mortgage CEO John Courson. Calls to the company's Folsom headquarters are answered with a recorded announcement. A phone number listed for his home in Rancho Murieta is disconnected.
Courson serves on the board of directors for the Mortgage Bankers Association and was appointed by Governor Schwarzenegger to the board of the California Housing Finance Agency.
One of Courson's former employees was sarcastic in an email message to News10. "I have two small children and now I have no money, no job and no health or dental benefits," wrote the former employee. "Let's give a nice BIG HAND to the MAN for all of his major accomplishments."
- "tip of the iceberg"
- "it's like a freight train coming at us at full-bore"
- "it's a house of cards"
- "coming back to bite...the lenders"
- "loans gone bad coming back to haunt the company"
- "going to hurt a lot of would-be homeowners"
- "going to pay for past mistakes"
- "the type of risks that's been involved in the industry is far beyond anything I've ever seen"
- "sending a shock wave"
- "time to pay the piper"
- "crazy, funny-money loans"
- "those good old days are long gone"
By all accounts, Central Pacific Mortgage is a reputable business that got caught up in a real estate market that has now turned sour.
...
[Mike] McGee [a past president of the California Mortgage Brokers Association] said over the past few years, companies like Central Pacific Mortgage started offering high-risk mortgages to people with poor credit. Now, with interest rates rising, people are unable to make their payments, banks are foreclosing and Central Pacific Mortgage apparently got caught in the middle.
17 comments:
Well that just a damn shame. What are you going do.
"Dude, I will like, soo not work in the mortgage industry again. Waaay too many bad memories."
Was she a broker or a secretary? :) Plus, I read this great rant from a former employee"
"I was an employee of CPM/Ivanhoe Mortgage. I haven't seen anywhere yet where it has been disclosed that the sorry leaders of this company have stolen the funds from the 100 branches the operated under it. Funds were to be held in seperate accounts to be used for branch payrolls and expenses. It was our money. They also took the money that was to pay for our insurance policies and has now allowed the policies to lapse., with no COBRA offered. In there last "MEMO" Courson states that they have keeping us informed all along about money troubles, but doesn't say that he has been saying how well the transition was going and that it would be a seamless transition. This executive group has mislead, literally robbed it's employees, including the last payroll. They promised employees at the Orlando Ivanhoe Division severance packages but of course lied about that. I have never seen such a bunch of cowards in the business world as John Courson, John Cassell, Ed Fuchs, Paul Reich etc... Now they hide. If you happen to become an employee of any of these people in the future, BEWARE. They will steal from you and smile about it. Hopefully the law will catch up with them on this fiasco. Anyoe looking for anymore info on this situation can email me at..."
This story keeps getting better.
"tip of the iceberg"
"it's like a freight train coming at us at full-bore"
"it's a house of cards"
"coming back to bite...the lenders"
"loans gone bad coming back to haunt the company"
"going to hurt a lot of would-be homeowners"
"going to pay for past mistakes"
"the type of risks that's been involved in the industry is far beyond anything I've ever seen"
"sending a shock wave"
"time to pay the piper"
"crazy, funny-money loans"
"those good old days are long gone
I wonder if this is worse than even we thought??
Wonder if Courson will stay on as a director with MBA and the state agency. Makes you wonder how these people get selected to be on these boards, it obviously doesn't have anything to do with compentency. Pretty much par for the course with the gov't. Sippn should be able to spin this really good as an isolated incident that only effect a single company that went out on a limb, guess the other ~30 lenders that have gone under are the same?
I guess they never learn:
'Creative Mortgage Lending (CML), a wholesale lender specializing in Alt-A and nonprime lending, has introduced their Nonprime Standalone Second Program. The new loan products offered under the program are Alt-A Standalone Home Equity Line of Credit (HELOC), Alt-A Standalone Second Mortgage and the Nonprime Standalone Second Mortgage.
CML's Standalone Second Program provides a minimum loan amount of $25,000 and a maximum combination loan amount of $550,000. The maximum loan-to-value ratio after bankruptcy discharge is 90 percent if it has been less than 24 months, and 100 percent if it has been more than 24 months since bankruptcy. The maximum debt-to-income ratio is 50 percent with a first lien adjustable rate mortgage (ARM) rate and 55 percent with a first lien fixed rate. The program also does not require reserves or a limit on cash out.
"When brokers find out that they can do a nonprime stand alone second, down to a 530 credit score with unlimited 30's and 60's on the mortgage history, they will not believe it," said Blaise Dietz, co-president and co-CEO of Creative Mortgage Lending. "If a customer needs a second mortgage and they do not have good credit, we are the only lender in town that can help. CML's Nonprime Standalone Second Mortgage is a great solution."
The Standalone Second Program is the most recent addition to CML's suite of loan products and services offered to fulfill brokers' needs. The company's products include low-range core rates, mid-range expanded rates and platinum rates. CML's platinum rates are the most stringent credit product with the best subprime rates.
"I searched over 60 lenders for a second mortgage for a customer with special needs, and I found the best rate, terms and service with Creative Mortgage Lending," said Allyson Karnes, president of Heritage Mortgage Corporation. "They are at the top of our approved lenders list." '
"Creative Mortgage Lending".
Well now, their title says it all, doesn't it? They're doomed to bankruptcy.
hype here
hype there
hype everywhere
government give-aways downtown to wealthy dubious schemers, aka developers, for "living urban in sacramento", which doesn't exist...and now the "developers" and their government henchmen turn out to be nothing but BS Con men...
government turning a blind eye to endless sprawl, and now, those golden gems, Serrano and La Borgata are deserted wastelands, presenting darkening facades for those saps who bought 3/4 million dollars stucco heaps on interest only loans that are now DUE...
and the Escalade is getting repossessed...
it ain't a pretty picture
Chuck - yeah, but IT IS a good time to get a great deal on that used Escalade.
A friend just bought a near new Malibu ski boat - original price around 60k for the loan balance of $26k.
Yup, the HELOC adjusted and the FB can't make the house payment. So the boat goes, then the truck, then the....finally the house.
Ben,
The Bee is sporting a new article
"Sacramento jobless rate jumps to 5.3 percent"
Add this to these headlines from CNN
"Stocks finish their worst week in four years, with the Dow ending down about 120 Friday, or 4.2% for the week. Full story soon."
and the sign of the times...
"How to beat bankruptcy"
Anyone else notice there was no mention of the OFHEO data at the Bee?
I'd link it but they'll just move it once the powers that be decide it's too negative and must be hidden or removed.
This subprime, Alt-A situation gets uglier by the day. Fremont and GMAC miss 10K filing deadlines in order to restate their troubles later. Brokers bellying up every day. Bernanke says no problem. These loans represent a small part of total picture (I guess 40% of all loans made in '06 is no problem). Throw in the new lending standards that effectively wipes out about 20 to 30% of the real estate buying public and again, no problem. The reason that its no problem? If Bernanke were to say it was a big deal, people would be stampeding toward the exits. Kind of like whats happening in the Japanese carry trade debacle that's unwinding the equity markets. No problem. Just sopping up a little excess liquidity. Sacramento's affordability index, along with all the subprime loans made in the area, is probably going to get hurt more than most. No problem, it was nothing more than paper profits anyway.
Diggin deeper makes an excellent point. Those in power are not allowed to say what they really think. If they did, they would get hammered down and cause panic and outrage. We don't elect or appoint officials to say what they think anymore. Take GW Bush for example. Whenever he says what is on his mind, he gets slaughtered by the press and often times rightfully so. Remember his "Bring it on" comment? Or take Alan Greenspans latest comment about our not so thriving economy. All that did was cause a 3% drop in the Dow. If Ben B were to say, "all y'all debtor motherf*&$ers are f*&^#ed!", the markets would respond pretty badly. Part of me wishes he would so that the excess froth in the market would disappear more rapidly.
Hi - thanks for noticing our story on the CPM closure. I'm glad it could bring some clarity to a situation that so many have been confused about.
And thanks as well for supporting an independent news outlet that's looking to gain a foothold in the financial and mortgage press.
bregards,
P. Jackson
Publisher, Housing Wire
I really do not understand why all these CPM guys are angry. It just a transition thing. They were transitioned from there desk to the parking lot. What so bad about that.
Screw the SOB's it was the crap loans they were peddling that caused CPM to fail. Bunch of liar loan pushers anyways, were better off without them.
The CA State Labor Board will never let these guys get away with not making paying payroll.
These guys are pitbulls.
The CPM employees in transition to the parking lot call the labor board as much as they want. CPM is in BK and has all the protection of the process. Now ex-employees are first on the list for the spoils, but I think CPM has dried up any remaining funds. Better to shrug of the the whole thing and find another job.
The sad part is all the idiot loan officers that want to get paid commission for the loans they made that caused CPM to fail in the first place. I mean what a bunch of losers, they write crap loans, which causes their employer to fail and they still want to get paid.
Well it looks like the list of liar loan outfits is getting smaller. That burger flipping job may be the way to go, or sell cars.
Lets see can a loan officer sell a car, I guess they would have to say can I put you in this baby today. Yep if they can say that, they can sell cars.
What a bunch of losers.
Perfect storm, you have no clue what you're talking about. CPM main does not produce squat. The entire company is dependent on it's 100+ branches to do all it's production. CPM main would basically UW/Fund loans from it's branches and perform compliant administrative duties for those branches. So, the 80+ employees that lost their jobs in one swift pen stroke from John Courson and his cronies had absolutely no fault other than being affiliated with CPM. They were happy to do that same swift and unwarned pen stroke to numerous branches throughtout the years. Branches that now are breathing a HUGE sigh of relief when their money wasn't stolen. Every penny in each branch's bank account, which CPM micromanaged "for you", belonged to the BRANCH NOT CPM. CPM gave the branches ZERO money at all. So when a branch gets the rug jerked out from underneath them as CPM did last month and refused to pay THEIR payroll, it is THEIR OWN money that CPM is refusing to pay them. That money has/had ZERO to do with CPM closing it's doors in February. It was due, owing, and already EARNED and CPM just kept it. Now those poor branches are left to scramble on their own to place current loans in their pipeline. CPM dug it's own grave and took lots of very innocent branches with them to that grave.
I was a branch of CPM for over 7 yrs. Luckily, I got out over a year ago and dodged a bullet.
CPM was corporate owned years ago, then John Courson bought it from Citicorp. The day he took over, he began making changes. Changes that shifted the scales to benefit CPM only. Make no mistake, their image as "employee friendly" was kept intact because the benefits being changed weren't eliminated....they were simply shifted to be paid by the BRANCHES. So at that point, we were forced to offer benefits we had to finance ourselves. Follow that? They got bright ideas, and we as branches had to serve as financeers for those bright ideas. Branches would complain, and CPM main would ignore the complaints. Good branches got tired and left. Remember, CPM main PRODUCES nothing. So when you have long time reliable branches leave dissatisfied, what are you left with?...the February 28th memo. I wrote a scathing letter to CPM myself warning them of this if they continued to play ball for only their benefit. I just feel sorry for the branches that got conned out of their hard earned money. I know for a fact that at one time there was atleast one branch that had well over 6 figures saved in their branch account. How would you feel if that were your money and they just sent you a fax telling you "see ya, gotta go, clear your desks, can't pay you"???
So for you to say that these Originators or branches somehow deserve what they got or that poor little CPM corp was dragged down by branches is absurd. CPM survived as long as it did ONLY BECAUSE of the branches. That's the real truth. I'm willing to bet that when all this comes to light, John Courson and all the higher ups TOOK "their" money out and horded it looooonnnng before that infamous memo went out. Wanna bet? I bet they had money for THEIR payroll.
People need to realize that CPM did a terrible injustice to hundreds, maybe thousands of people that depended and more importantly believed what Courson and his cronies were saying. I totally understand, because I believed it when I was with them. You trust that the leaders of a company have an ethical and moral compass that points up rather than down.
There were some great people that went down with the ship. Those are the people that don't deserve what they got and will be in my prayers for a quick recovery.
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