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Lender Sues Former Branch Manager

Lender Sues Former Branch Manager

First Magnus lawsuit against former TAMB head

April 20, 2005
(revised 4.21.05)

By PATRICK CROWLEY

The one time head of the Texas Association of Mortgage Brokers is bankrupt and fighting a legal battle with one of the nation’s biggest government wholesalers.Lloyd Eugene Arnold has filed for personal bankruptcy and his one time mortgage brokerage, Premier Home Mortgage of Sugar Land, Texas, is also bankrupt, according to court documents filed with The United States Bankruptcy Court for the Southern District of Texas in Houston.

Arnold could not be reached to comment and the lawyer listed on the bankruptcy filings, Ronald Block of Stafford, Texas, did not return phone calls to comment.

Arnold, his wife, Anita, and their company are being sued in Pima County Superior Court by First Magnus Financial Corp., a wholesale and retail lender based in Tucson, Ariz.

Arnold’s wife, Anita Arnold, previously held a loan officer license in Texas, but it has expired, according to state records.

First Magnus was the 17th largest wholesale lender last year, according to a ranking by Thomson Publishing.

The company reports total 2004 volume of $16.3 billion, including $10.4 billion from wholesale, and says it is a top-five government lender.

First Magnus filed the breach of contract complaint against Arnold and Premier Home Mortgage in the Superior Court of Arizona in on March 17, 2004. Lloyd Arnold was a branch manager for the company, court records show.

“FMFC’s complaint alleges breach of contract, breach of the duty of good faith and fair dealing, unfair competition, statutory and common law trade secrets violation, unjust enrichment, fraud, breach of the duty of loyalty, conversion, and trademark infringement,” Gary Baraff, director of business development for First Magnus, said in e-mail response to questions from MortgageDaily.com.

“FMFC’s complaint involves Lloyd Arnold’s employment with FMFC as a branch manager in Austin, Texas. FMFC’s complaint sought monetary damages, punitive damages, and injunctive relief,” Baraff said.

A woman who answered the phone Monday at First Magnus office in Austin said Arnold had not worked at the company “for a couple of years.”

Arnold was head of the Texas Association of Mortgage Brokers in 1997, Harry Dinham, a mortgage broker active with the group, confirmed in an e-mail to MortgageDaily.com.

Arnold’s filing shows that Premier Mortgage had assets and debts of between $50,000 and $100,000. Debts listed on the filing include nearly $18,000 owed on three credit cards and $38,370 owed on a loan made by Compass Bank of Birmingham, AL.

The couple’s personal bankruptcy shows they owe nearly $92,000 on eight credit cards and more than $55,000 in “business debt,” according to court documents.

They listed assets of $500,000 to $1 million and debts of $100,000 to $500,000. The Arnolds listed income of $33,000 in 2004, $114,290 in 2003 and $70,700 in 2002.

It is not clear if Lloyd Arnold is still working in the mortgage industry. His Texas mortgage brokerage license does not expire until May 9, state records indicate.


Patrick Crowley is a political reporter and columnist and former business writer for The Cincinnati Enquirer. Email Patrick at: pcrowley@enquirer.com

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