Former executives of Carteret Mortgage Corp. met in December to discuss a strategy for survival. But the company's chief executive officer has decided to throw in the towel. While managers and originators are finding new homes, Carteret's CEO is done with the mortgage business.
Privately-held Carteret Mortgage Corp., which originated more than $3.8 billion in loans in 2006, is in the process of shutting down, according to an e-mail sent to all employees from CEO and owner Eric Weinstein. The company is expected to be totally closed by the end of September.
"You should definitely seek other employment immediately," employees and loan officers were told. "Take whatever files you can."
Tom Moskey, a former Carteret manager who is now president of Endicott, Md.-based Candor Mortgage, told MortgageDaily.com that, in effect, loan officers "were advised to seek other homes for their loans as fast as possible."
|The "only people left" at the Centreville,Va.-based brokerage company, Weinstein said, will be Chief Financial Officer Michelle Barber, Chief Operations Officer Jessica Harrington and himself.
"I have laid off the entire admin staff to free up money to pay out the loan officers," he explained. "Every cent we get, we are using to pay off the loan officers and reserve accounts. You have to get the money in and paid," he warned, "before we get liens on our bank accounts."
Carteret's ability to survive was first discussed at a special meeting of executives last December, former employee Paul Skeens, currently president of Waldorf, Md.-based Colonial Mortgage Co., told MortgageDaily.com.
"We went through the steps to keep the company going," he said. "I left on April 1 because what has now happened was the most probable outcome."
In his e-mail, Weinstein told loan officers that they have "about 30 days to close your loans before it starts getting bad." He explained that he can "guarantee payment of loans closing soon, but not things 30 days out."
company photo of Michelle Barber,
Eric Weinstein and Jessica Harrington
Candor has "picked up" 180 loan officers who had been originating loans for Carteret and expects to pick up as many as an additional 220, he said.
John Moore, who worked in recruiting at Carteret for eight years, told MortgageDaily.com that "the top percentage of loan officers [at Carteret] were some of the best in the industry" and would be desirable as loan officers at many companies.
At the end of 2002, according to Carteret's Web site, the net branch was operating in all 50 states and the District of Columbia with more than 2,000 loan officers. By 2007, the company operated in one less state with about 1,700 loan officers and 622 employees. Early this year, it was operating in just 45 states.
Last year, Carteret was number 61 in Inc. magazine's list of the fastest growing companies in the U.S.
Weinstein began his career in the 1980's as a commercial loan officer at a bank. Heavily in debt, he stumbled across residential loan brokering while helping his wife who took a part-time job as a loan originator as a refinance rally started in 1991. Through flyers delivered on one weekend, he would up closing 30 loans -- pushing his income that year to more than the president of his former bank.
"It was official: I was hooked for life." he wrote in a trade publication in 2001.
He founded Carteret in 1995 and opened its first licensed mortgage broker office in Virginia that year, according to the company Web site. It allowed employees to earn residual income by recruiting and managing other employees. And loan officers could recruit and mentor others.
Reflecting on Carteret's 14-year existence, he declared, "We can take pride that we outlasted many in the industry."
While some other mortgage companies have been recruiting former Carteret staff persons and loan officers, Weinstein says he won't be joining another mortgage company.
"Upon cleaning up Carteret," he said in his e-mail, "I have decided to exit the mortgage industry."