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End of the Line for Fla. Firm

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A national mortgage company with about 1,000 employees working from 400 offices will shut down by next month. A cross town rival is slated to pick up some of the company’s branch and headquarters staff.

CFIC Home Mortgage, which reportedly operates in 47 states and the District of Columbia, is closing down between now and the end of October, keeping individual offices open just long enough to close loans in their pipeline, according to a company official.

“We’ve withdrawn our licenses from all those states and we’re ceasing operations in all our branches,” Don Whitaker, director of operations at the company, told MortgageDaily.com. “We’re staying open long enough to close the loans in the pipeline or until our branches find another company to work for and are properly licensed. Typically, that takes four to six weeks.

“Hopefully,” he added, “we can keep their monies flowing to them and close their loans for them, supporting them until they can latch on somewhere else.”

The origination of new loans also is ceasing at the St. Petersburg, Fla.-based broker, he noted.

CFIC’s employees will, with the company’s assistance, be able to transfer their employment to Apex Lending Inc. in Clearwater, Fla., which also is expected to hire some of CFIC’s corporate staff, according to Whitaker. The transfer will enable CFIC’s former loan officers to continue to originate loans for their borrowers and continue to get paid, he said.

“Those are all our plans,” he concluded. “Hopefully, they’ll work.”

Apex is licensed as a mortgage broker in 28 states, according to its Web site, and originates loans for such major lenders as Bank of America, Chase, Countrywide, IndyMac, WaMu and Wells Fargo.

CFIC’s Georgia license was revoked last March, an official told MortgageDaily.com in May, because of the employment of two persons with felony convictions. The company also paid a $193,000 fine for that state regulatory violation.

In New Jersey, Challenge had been fighting a suit by a former employee over employment-associated agreements. And in Iowa and Florida, former employees had filed suits involving lack of overtime payments, both charging violations of the Fair Labor Standards Act.

CFIC, which was founded in 1992, was shutting down because of the company’s inability to work out new bonding programs with its bond company, Hartford Bond, of Hartford, Conn., according to Whitaker.

“Although we haven’t had a claim with that company, they all of a sudden decided that we needed to do more than what we had contractually agreed to,” he said, describing the cause as “tougher underwriting decisions by our bonding provider.”

He said he “really can’t address” the specifics of the bonding problem.

“If you want to call Hartford, they can probably tell you why they decided that,” he maintained.

Calls to Hartford officials were not immediately returned.

Before beginning its shutdown, CFIC’s loan officers — the company referred to them as mortgage consultants — closed $10 million in loans every business day, helping a total of 20,000 people each year, according to the company’s Web site. That would amount to about $2.6 billion in originations annually and make them one of the nation’s top 10 mortgage brokers.

The company is a subsidiary of Challenges Financial Investors Corp.

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