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Another Net Branch Operation Closes

Sunshine Mortgage stops funding on Jan. 7

January 12, 2009


Managers of the 19 branches operated by one of Georgia's largest mortgage companies are scrambling to find a new home -- with one potential suitor reportedly considering a deal. The collapse brings to eight the number of branch operations to fail since last year.

Sunshine Mortgage Corp. ended all loan fundings on Jan. 7.

In an e-mail sent early Thursday to employees, Sunshine Chief Executive Officer Fred Powell blamed the sudden closing on the company's failure to obtain an increased line-of-credit because of insufficient operating capital.

Employees were first notified of the company's problems in a conference call late Wednesday, according to a branch manager.

Powell did not return a call from MortgageDaily.com seeking further details.

Meanwhile, loan officers are seeking to find new homes for dozens of loans that have yet to close.

"We're making sure we'll find a home for each and every one so they get closed," Kathleen Sewell, manager of the Atlanta Buckhead branch, told MortgageDaily.com in an interview. "The loan officers and a lot of the operations people have stayed on board just to make sure customers are taken care of."

The closing, she said, "came out of the blue totally. Rates have dropped and we were getting a lot of business."

In addition to its headquarters in Smyrna, Sunshine operates 19 branches in six states.

A recorded message directed at callers to the Woodstock, Ga., office, stated that the company was out of business, adding, "Sunshine Mortgage is no longer funding loans."

"We are talking to many different companies right now," Sewell explained. "We're in active talks to determine what we want to do. It's just in the interviewing stage."

Among those companies is Opteum Mortgage, an employee at that company confirmed. Opteum CEO Rick E. Floyd, a past president of the Mortgage Bankers Association of Georgia, did not respond to a phone call message and an e-mail, seeking further details.

In May 2007, Opteum was acquired by Northbrook, Ill.-based Prospect Mortgage Co. Inc., an affiliate of the private equity fund group Sterling Partners. Atlanta-headquartered Opteum, which was founded in 1999, had just shuttered its wholesale and correspondent operations in April 2007.

Sunshine Mortgage Vice President Steve Friedman, in a voice message on his Atlanta office line that was played in response to calls on Friday, told callers, "Those of you that are inquiring about financing, I will be able to answer those calls probably by Monday."

As for himself, he added, "I will land and I will be up and running beginning next week."

Sunshine Mortgage was founded in 1981 and had 10 branch offices in Georgia, as well as branches in Colorado, Florida, Maryland, Mississippi, North Carolina, South Carolina and Tennessee.

In fiscal 2006, the company originated nearly $500 million in conforming mortgages, according to data from a business report.

Despite the shutdown, telephone calls on Friday at the office in Cornelius, N.C., were still being answered with the joyful greeting, "It's a great day at Sunshine Mortgage!"

In addition to Sunshine, MortgageDaily.com has covered the closings of the following eight net branch operations since January 2008:

Net Branch Closings Since 2008
Company Date Reported
Ace Mortgage Funding LLC Oct. 28, 2008
Carteret Mortgage Corp. Aug. 28, 2008
First National Mortgage Sources Feb. 28, 2008
Global Mortgage Inc. March 12, 2008
Liberty One Lending Jan. 1, 2009
Maverick Residential Mortgage Jan. 17, 2008
Mid Atlantic Capital LLC Sept. 19, 2008
Shearson Financial Network Inc. March 28, 2008

Jerry DeMuth is an award winning journalist who has been reporting for four decades.

e-mail Jerry at [email protected]
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