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Failed, closed and a c q u i r e d mortgage-related entities.



Three More Out of Business

First Madison, 1st Choice & Eastern American closed

January 15, 2008

By PATRICK CROWLEY


photo of Patrick Crowley

Another three mortgage firms have closed their doors and dropped out of business.

Just two years ago, Maryland-based First Madison Mortgage was one of the industries rising stars, placing number 531 on Inc. Magazine's list of the nation's fastest growing companies.

Founded in 2002, the company's growth exploded in 2006, with revenue growing 582 percent to $4.1 million over just three years. The company employed 65 people in 2007.

First Madison's Web site is now dark and its phones are not being answered. It is not affiliated with a New Jersey company with the same name.

In San Luis Obispo, Calif., Cameron Financial has pulled the plug on 1st Choice Mortgage, a warehouse lender that did $750 million in business in 2005, according to a case study by DataTrac. DataTrac supplied a back-office system for the company.

Two employees have confirmed that the closing of the company, which has also been the subject of published reports in California.

Cameron Financial did not return phone calls to comment.

In December Cameron was touting its new investment in technology in a press release issued by PriceMyLoan, a mortgage industry software provider.

"Cameron Financial Group is an example of a lender that has made the decision to spend on technology during a market downturn," PriceMyLoan said in the press release.

The company moved into prime lending last year -- a move that couldn't prevent its ultimate demise.

"Following several years of growth as a non-conforming lender, CFG recently made the decision to transition into the competitive world of prime lending," the vendor said. "This spurred CFG to look for technology that would give them an edge over their competitors."

"In the prime world, originators don't want empty promises," Cameron Vice President David Rocha said in the statement. "You have to get it right the first time or you won't get a second chance."

An estimated 75 employees lost their jobs in the closing.

Eastern American Mortgage of New Jersey has also gone out of business.

According to the State of New York Banking Department the company surrendered its license in September. The company's phone has been turned off.

Eastern employed 10 people at its Lyndhurst, N.J., headquarters and had revenue of $900,000 last year, according to Manta.com, an online business tracking service. But the company at one time operated by more than 30 branches, according to research done by MortgageDaily.com.

In February 2007, Eastern reached a settlement with New York banking regulators over allegations it had broken the state's mortgage lending laws and regulations. The company paid a $1,500 fine and agreed to draft and follow procedures that would put it in compliance with the state's laws, according to a copy of the settlement.


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]

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