The abrupt closing of a Michigan company, which had mortgage branches from Alaska to Florida, has one former manager wondering what happened to branch reserves he deposited three years ago.
Starpointe Mortgage CEO and founder Michael Cosentino informed employees through a companywide e-mail on June 25 that they had until July 3 to close any loans in their pipeline and that the company was closing, according to branch agency director Craig Pierce.
The deadline was extended to July 10 to accommodate for Pierce and a couple other branches while they continued to close the loans in their pipeline, he said in a phone interview.
Efforts to reach Cosentino or a company representative were unsuccessful.
But Michigan Department of Labor and Economic Growth spokeswoman Kathy Fagan confirmed the company is definitely closed for business.
She told MortgageDaily.com that Cosentino recently renewed his mortgage license and that the mortgage division has been in contact with him.
"They wanted to make sure any loans in the pipeline were being handled and he (Cosentino) assured them that they are being handled," she said.
Pierce, the former executive, told MortgageDaily.com that cashiers checks made out to Troy, Mich.-based Starpointe for loans that closed after the company shut down were forwarded to Cosentino.
"He went ahead and gave us a cashier's check back for the full amount," Pierce said. "I am assuming that if he was going to go ahead and steal money he would have taken that money too."
Pierce is concerned however about the $11,000 to $16,000 he had initially deposited in reserves with Starpointe over three years ago to open his branch in Macomb, Mich., where he was originating about 8 to 12 million a year in mostly conforming loans.
"It was company requirement that you had to have at least two and a half months in reserves plus payroll and stuff like that," Pierce said. "Some branches had a lot more than me in reserves and a lot of branches had less then me, too."
The lack of reserves resulted in missed payroll for Pierce's employees. He said Cosentino had told him, "someone came in and froze his accounts."
Where those reserves are remains a mystery. And the exact number of branches Starpointe had could not be verified by MortgageDaily.com, but it is reported to be about 35.
Starpointe's branch opportunity recruiting Web site said they have been in business since 1997. "Starpointe Mortgage offers business models and support for your branch whether you be a top producing loan officer looking to make the transition to New Branch Manager or a seasoned veteran looking to focus more on production and less on the day to day tasks of office administration and training."
Confirmation of the company's closing comes on the heels of a bankruptcy filing by Premier Mortgage Funding Inc. -- which operates almost 600 branches. The bankruptcy was the result of millions of dollars in frivolous lawsuits filed against the company, Premier's chief executive officer told MortgageDaily.com in a telephone interview Friday.
Despite Starpointe's current situation and the negativity from other branch managers, Pierce said he had nothing bad to say about Cosentino.
"He's been a great mentor to me," Pierce said. He speculated that Cosentino's number one branch closed down and he just couldn't keep going.