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4 More Confirmed Dead

Centennial, Colorado FSB, Fidelity and Unique close operations

April 3, 2008

By PATRICK CROWLEY


photo of Patrick Crowley

Mortgage lending operations continue to close from Colorado to New Jersey. Two of the latest victims were wholesale lenders.

State regulars have shut the doors of a large Minnesota lender because of financial problems and instability.

Centennial Mortgage and Funding of Bloomington, Minn., which also did business as Award Mortgage, has agreed to a "cease and desist order" with the Minnesota Department of Commerce.

Under the three-page order signed by Centennial President Alvin Gelschus, the company agreed to "cease and desist from engaging in any and all new mortgage loan origination or servicing activities in the State of Minnesota."

The state said is pursued the order based on "allegations that (Centennial) has demonstrated financial irresponsibility or incompetence."

An estimated 125 employees were impacted by the closing.

No other details were available.

A voice mail message at its Iowa office indicates the company has closed. The company's Web site was also dark.

According to AllMortgageDetail.com, an online tracker of mortgage lending activity, Centennial processed nearly 3,000 loans totaling $422 million in 2006 and 2,532 loans totaling $370 million in 2005.

In Colorado, a federal savings bank has closed its wholesale unit and rolled the operation into the bank.

Colorado Federal Savings Bank President James Hinton confirmed in an interview that the bank is not exiting the wholesale business, but it has shut down its National Wholesale Funding unit.

Hinton said the unit accounted for "less that five percent of our total loan production" of about $70 million a month. Hinton acknowledged these are tough times for wholesale lending. But the decision to close National Wholesale Funding was more of a business decision than a reaction to market forces, he said.

The unit employed just nine people and four have stayed with the bank, Hinton said.

"We did not feel it could be enough to maintain as a separate business," he said.

In Baltimore the father and son operators of Fidelity Home Mortgage Corp. have suspended wholesale lending in the wake of their federal indictment for tax fraud.

Stilianos (Stan) Mavroulis, 63, and his son, Kyriakos (Kirk) Mavroulis, are charged with diverting $1.9 million from the company to pay for personal expenses, according to a statement from the U.S. Attorney's office in Maryland.

The money was allegedly use to trade stock, travel to Greece and fund a family-owned music production company, prosecutors said. Money was also paid "under the table" to other family members so the Marvoulis' could avoid paying taxes on the money, according to the charges.

Following the indictment Fidelity circulated a memo indicating it was exiting the wholesale business.

Around 50 employees were impacted by Fidelity's closing.

Calls to the company were not returned.

According to AllMortgageDetail, business had been on an upswing at Fidelity. Loans processed grew from 393 in 2005 to 674 in 2006 while loan volume went from $53.6 million in 2005 to $84.5 million a year later.

New Jersey-based Unique Mortgage Solutions has also shut its doors. It's Web site and phone numbers are dark.

The company had 65 employees and annual revenue of about $1 million a year, according to Manta.com, a business tracking and information Web site. Published and Internet reports put the number of employees at 50.


Patrick Crowley is a feature journalist and blogger for MortgageDaily.com. He is also a reporter, blogger and columnist for The Cincinnati Enquirer.
e-mail Patrick at: [email protected]

Corporate Mortgage News
M e r g e r s, a c q u i s i t i o n s and private and public offerings. Other corporate activity including executive appointments, bankruptcies name changes.


Wholesale Lending News | Directory | P r i cing Engine | Originator Newsletter
News about wholesale lenders, correspondent lenders and wholesale mortgage lending programs. Alt-A, subprime and other niche loan programs. Lawsuits between wholesalers and brokers.



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Job additions, layoffs and employment lawsuits. Employment data from the Department of Labor, state tracking, reports and analysis. Job finding tips.


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