A branch operation that had ranked as the second biggest mortgage lender in San Diego collapsed following the loss of its warehouse lines-of-credit. Its chief has joined another net branch company. The failed firm is one of seven companies accused in a lawsuit of stealing mortgage leads from LendingTree.
Seven of Home Loan Consultants Inc.'s eight offices are now closed.
The eighth office, its home office in San Diego, is now operating as a branch affiliate of GEM Mortgage. Home Loan founder and former president John Butcherine remains at the San Diego branch under GEM.
"He's the branch manager and the head of that office," GEM Executive Vice President Rick Roper told MortgageDaily.com.
"They've become, in essence," he explained, "a vastly scaled down branch with a limited number of staff that has affiliated with us in order to be able to close and fund their loans. John has his obligations from his former company."
GEM and affiliate Golden Empire have offices in California, Arizona, Nevada and Washington. The Bakersfield, Calif.-based company reports annual originations of $2 billion.
With any new production Butcherine brings in, Roper said, he "becomes eligible to work with us and can go ahead and close it on our warehouse lines."
Home Loan ceased operating after reportedly losing all three of its warehouse lines.
Butcherine did not return messages left for him at his San Diego office.
He founded Home Loan as a California corporation in 2002 at age 27 with only three employees.
By 2006, the company grew to 112 registered brokers and 18 full-time employees. Originations that year were 1,878 loans for $612 million, according to a January 2007 ranking of San Diego mortgage companies by the San Diego Business Journal. Home Loan ranked as the No. 2 lender.
But in 2007, the company began shrinking its operations, closing its net branches, which had numbered as many as 22, according to reports.
Last year, Home Loan -- along with Lending Tree and three other mortgage companies -- were named as defendants in five separate federal suits brought by borrowers charging violations of the Fair Credit Reporting Act.
Home Loan was also the sole defendant in an Arizona Superior Court suit brought by The Biltmore Bank of Arizona, charging breach of contract. All six of those suits still are pending.
In a seventh suit, filed last year by Lending Tree, Home Loan -- along with six other companies and nine individuals, including Butcherine -- were charged with using customer data stolen from Lending Tree to market their own loan programs directly to Lending Tree customers. That case also is continuing, with a status conference scheduled for April 21.
Garcia v. LendingTree, LLC
Case No. 08-04551-JSR
LENDINGTREE LLC VS. NEWPORT LENDING CORPORATION
Case No. 30-2008-00062376-CU-FR-CXC