Capitol Commerce Mortgage shut down Friday, stunning employees and brokers who were counting on loan closings.
The Sacramento-based wholesaler had 15 offices in several states according to its archived website, which has since been updated to blank pages.
Former Capitol account executives said in published reports that the lender had been in business for 17 years and had funded $3.7 billion during July.
The Rocky Mountain News obtained information about a fax that Capitol sent to local brokers. The paper quoted the fax as saying, "Any files that had not funded on or before Aug. 13 must be picked up. CCMC is not in a position to provide any level of service on your loan applications."
The employees of that branch of the company were apparently unaware the closing was on its way.
According to the same report, the fax also read, "As you can imagine, our entire team is in shock and overcome with emotion. This information was not given to us until last night when all managers were contacted and told the news of the company's sudden demise."
The Seattle Times quoted a Capitol former employee from Bellevue. Michelle Bentley said that a boss told her and her co-workers late Thursday, "We no longer exist."
Another employee said he had concerns for the jilted customers.
"I feel sorry for consumers because they are really going to get stung by this," Steve Crago said in the San Jose Mercury News. "It's a major shock to me and a lot of other people."
Glenn Warren, a broker in San Luis Obispo, spoke to that local paper about his problems with the company involving one of his customers who is now loanless. Warren said that Capitol had extended between $86.9 million in July in that area alone.
"This is going to be huge in this county," he said to the San Luis Obispo paper.
Chicago will also be hit hard by the company's closing, according to the Illinois Association of Mortgage Brokers. At least 300 loans were in process by suburban Chicagoans, the industry organization told the Daily Herald.
Mortgage industry experts are already busy analyzing the the downfall of the company whose motto was reportedly "Commitments Made and Met."
In Marin County, the Marin Independent Journal reported the experts take on the situation.
Apparently executives at Capitol decided not to buy bonds as insurance against interest rates climbing, experts told the paper.
"They did not hedge their bet, very simply," said Jim Chapman, chief executive of a San Rafael mortgage broker and banker, to the Independent Journal. "They had to deliver loans with low interest rates, at a time when loans were at high interest rates."