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The Mortgage Graveyard
Failed, closed and a c q u i r e d mortgage-related entities.


www.lenderhomepage.com
Private Money Lender Among Recent Casualties

Recent mortgage-related businesses to close down

March 10, 2012

By MortgageDaily.com staff


A private-money lender out of New York has vanished. It was also the end of the line for a Chicago bank and a net branch business in Michigan.

Thomas Sullivan operated New York-based Heritage Capital Ltd. The company promoted commercial financing and residential jumbo financing.

"In these times having a solid understanding and
wide network within the capital markets is the key to lending success," the company said in promotional material.

But the times were apparently too much for Sullivan and his company.

The phone lines have been disconnected. Its website has gone dark. And no new business listings could be located for the firm.

An investigation turned up a Thomas M. Sullivan at Evolve Bank & Trust in New York, but he said in a telephone interview that he has no connection with Heritage Capital.

Mortgage Daily was first alerted to the Heritage Capital's demise when the company skipped out on an advertising bill.

Further west, in Chicago, the Illinois Department of Financial and Professional Regulation - Division of Banking seized and shut down New City Bank. The Federal Deposit Insurance Corp., which was appointed receiver, couldn't find a buyer for the failed bank and has started the liquidation process.

New City had just $71 million in total assets as of Dec. 31, 2011, including $16 million in home loans, $16 million in commercial real estate loans and $5 million in construction-and-land-development loans. Deposits were only $1 million less than total assets -- a dangerously slim equity margin.

The failed bank was nine years old and had just nine employees. The FDIC issued a consent order against New City in May 2011 and another consent order in February 2011.

After all is said and done, the FDIC expects the Deposit Insurance Fund to be depleted by $17 million as a result of New City's failure -- the 13th federally insured bank failure so far in 2012.

So far this year, Mortgage Daily has tracked the failure or closing of 21 mortgage-related businesses.

Interactive Financial has exited the net branch space, according to Interactive President Hunt Gersin. The Troy, Mich.-based firm was founded in 1993.

"We analyzed the market in 2011, and decided that the branch model was no longer viable, in that, due to compliance requirements/costs, and the fact that historically our top branches had only one, maybe two, active originators, we stopped recruiting, and did significant research to find the perfect model in today's origination climate
," Gersin said in a written statement.

He said that Interactive's licenses weren't renewed, and operations were ceased.

Gersin touted a new organization, Your Neighborhood Mortgage Experts, which was reportedly formed at the end of last year. The business model for the new entity is "to be a local, community focused loan origination platform."

Gersin states that his new firm will be fully operational by the second quarter of this year and "will be the largest origination per loan officer mortgage broker in the United States." He hopes to grow Your Neighborhood to a thousand loan originators who originate at least seven loans a month each.

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