home subscribe advertise reprints e-mail help RSS about us LOG IN

Mortgage News

 

Mortgage News

HOT Topics

production

servicing

compliance

legal

fraud

secondary

jobs

appraisal

site map

www.loan-academy.com/
twitter linkedin
facebook google+
Search:

Mortgage News

News by Subject
Complete list of specialty news sections.

Purchase Subscription
Subscribe to MortgageDaily.com and get immediate access to all news, statistics and archives.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Consumer Mortgage News
Free mortgage news for prospective borrowers.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from MortgageDaily.com.

Mortgage News Reprints
Put entire MortgageDaily.com stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed MortgageDaily.com stories free on your Web site or for your RSS reader.

News Archives
Archive of MortgageDaily.com stories by month going back to 1999.

Press Releases
Reports and announcements from MortgageDaily.com.

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Directories
Directories of lenders, branch operators and mortgage service providers.

Mortgage Graphs
Directories of lenders, branch operators and mortgage service providers.

Mortgage Employment News | Employment Index | Employment Statistics
Job additions, layoffs and employment lawsuits. Employment data from the Department of Labor, state tracking, reports and analysis. Job finding tips.


Bankrupt Firm's Owners Establish Employee Fund

$1 million fund set up for First Magnus headquarters employees

August 22, 2007

By JERRY DeMUTH


Owners of a bankrupt mortgage lender have established a $1 million fund for some of its nearly 6,000 laid off employees.

More than $1 million has been pledged to assist some former employees of First Magnus Financial Corp. by the mortgage company's shareholders and executives.

The privately-held, Tucson-based company, which originated more than $17 billion in loans this year, shut down on Aug. 16 and filed for protection under Chapter 11 of the U.S. Bankruptcy Code on August 21.

Although First Magnus had nearly 6,000 employees in more than 300 offices nationwide, monies from the "assistance fund" will be provided only to the approximately 800 employees who worked in its Tucson headquarters, according to a spokesman.

"We, as shareholders and executives of First Magnus," President and CEO G. S. Jaggi explained in a statement, "are committed to doing what we can to personally help those individuals in Tucson who will suffer the greatest hardship."

This is because the Tucson employees lacked the loan origination skills of employees elsewhere, the spokesman said.

The company also has helped arranged a job fair for former Tucson employees, which will be held Monday, August 27, in a Tucson hotel, which is donating the space.

When First Magnus told employees that it was halting lending operations, it told them to expect a delay in the payment of wages and that those payments would be mailed out as checks rather than made by direct deposit, according to a spokesman.

Now, making the payments that were scheduled to be made on August 20 is in the hands of the bankruptcy court, Gary Baraff, senior vice president, marketing, told MortgageDaily.com, pointing out, "We have asked the bankruptcy judge to make that his highest priority and make those funds available for the [Aug. 20] payroll prior to any other creditors being addressed."

No complaints regarding unpaid back pay had been filed with the Arizona Department of Labor as of late Tuesday, a department spokesman told MortgageDaily.com.

Meanwhile, the Arizona Department of Financial Institutions has suspended the licenses of First Magnus and its six subsidiaries -- Great Southwest Mortgage, Charter Funding, Gold Mortgage Center, Frost Mortgage, Colonial Home Loans and First Magnus Home Loans, all of which shut down when First Magnus Financial ceased originating and funding loans.

A hearing to permanently revoke those licenses has been scheduled for October 1, according to the department's order of summary suspension.

"Despite the department's request," the order states, "respondents have not provided any information involving loans in process, loans that closed, but not yet funded for Arizona borrowers, and have not provided any information to the department relating to their financial condition."

This lack of responsiveness by "the largest, privately-owned mortgage lender in the state of Arizona," the order states, "demonstrates an immediate threat to the public welfare of the citizens of Arizona and any borrowers nationwide."

First Magnus retail division Charter Funding is being acquired by Troy, Mich.-based Flagstar Bancorp Inc.

In a statement to employees, brokers and borrowers, First Magnus blamed its shut down on the lack of a secondary market for its loans.


Related:

First Magnus Finished
An Arizona-based firm -- which was among the fastest growing U.S. companies in 2004 and added hundreds of new employees last year -- and its subsidiary are out of business. As a result, thousands of employees are without a job.


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

e-mail Jerry at [email protected]
Corporate Mortgage News
M e r g e r s, a c q u i s i t i o n s and private and public offerings. Other corporate activity including executive appointments, bankruptcies name changes.



SUBSCRIBERS: Edit Subscription | Subscription Help | or call 214.521.1300

Subscribe Contact Us Site Map

Copyright © 2017 Mortgage Daily, D a l l a s
Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

p r i c i n g engine directory

wholesale lender directory

More Mortgage News Resources (full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter

MBS

mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

real estate news

refinance news

reverse mortgage news

secondary marketing

social media

servicing news

subprime news

wholesale lenders