A multi-state subprime lender based in California, which reported more than $1 billion in originations during 2005, recently shut down its operations.
Right-Away Mortgage Inc. has ended operations, 12 years after it was founded, a former employee has confirmed.
"The company shut down," the former head of one of company's branch offices told MortgageDaily.com. "That's what the board decided because it wasn't profitable anymore to compete in the market.
The executive asked to not be identified because doing so would not make him "feel comfortable," he explained.
"There's a lot of companies that have been shutting down," he pointed out. "Right-Away shut down basically for the same reason those other companies have been shutting down -- because it's not profitable."
While Cypress, Calif.-based Right-Away's Web site is still up, its rate sheets have not been updated since May 21. Further, its main office number is answered by a voice recording and no one answers the extensions. There is no recording indicating that the company has closed down.
The HUD-approved lender specialized in fixed-rate and LIBOR adjustable-rate mortgage purchase and equity loans to borrowers with FICO scores as low as 540, according to its Web site. It originated 5,176 loans for $1.3 billion in 2005, up from $0.3 billion in 2003, according to AllMortgageDetail.com.
Right-Away reported it was formed in 1995 and licensed in 18 states -- most of them on the Pacific Coast and in the southwest and southeast.
At the time of its closing, the company was still looking to hire account executives, processors and underwriters, according to its Web site, which boasted, "Contact us and see why we are still growing while others are cutting back."
When MortgageDaily.com pointed out to the former branch manager that this seemed to indicate the company had been profitable, he responded: "How do you know they were doing better than the other companies? Do you have access to their financials?"
Less than a month before its shutdown, Right-Away, along with New Century Mortgage, were revealed to have lost $3,579,000 through a mortgage fraud scheme involving seven homes that was allegedly conducted by the owners and an employee of Vallejo, Calif.-based Hiddenbrooke Mortgage, according to the Alameda County District Attorney's office. The three were arrested on felony complaints filed by that office on May 9 and are scheduled to appear in court on June 22.
"I remember them," former Right-Away employee Darren Anderson told MortgageDaily.com. "They were trying to do shady loans with us and we wouldn't take them. They were even trying to use one of my broker's name and license on one file. It was a terrible situation."