WR Starkey Mortgage LLP has named a new chief executive officer who sees this week’s settlement with North Carolina as having made the lender a “better, stronger company.”
On Monday, North Carolina’s attorney general announced a $4.5 million settlement with the Plano, Texas-based lender. The company is accused of helping Phoenix Housing Group of Greensboro sell manufactured homes at inflated prices.
“Starkey worked with Phoenix to improperly qualify borrowers for loans and finance the sales of manufactured homes and land at inflated prices,” the statement from the attorney general alleged. “Starkey employees and agents failed to verify financial information provided about borrowers by Phoenix, disguised the source of the information, placed inaccurate information on consumers’ credit reports to boost their ability to qualify for loans, made loans without regard to borrowers’ ability to repay, and added discount points to mortgages without reducing the interest rate as required by law.”
WR Starkey Mortgage has issued a statement indicating that a majority of the allegations revolved around “a few former company employees and representatives of Phoenix Housing Group Inc.”
No admission or denial of North Carolina’s allegations was made by WR Starkey Mortgage, and the company noted that it immediately cooperated with the attorney general and the North Carolina Commissioner of Banks to address the issues.
As part of the settlement, founder and CEO Bill Starkey Jr. agreed to resign. Starkey was formerly president of Sunbelt National Mortgage, which became First Horizon Home Loans and — through an acquisition by MetLife Inc. — MetLife Home Loans.
Replacing Starkey as CEO was WR Starkey Mortgage Co-Founder John Aspinwall — who also worked at Sunbelt.
“We never attempted to avoid our responsibilities, which is reflected in our rapid and significant settlement with the state authorities,” Aspinwall said in the release.
The company’s branches in North Carolina will continue to operate, and no prohibition exists to prevent new branches from opening, according to the statement.
Mark Pearce, chief deputy for the bank commissioner, was quoted in the company’s announcement as acknowledging the lender’s “transformation in its operations and controls to ensure that borrowers are treated right.”
Aspinwall explained that the company “worked tirelessly to restructure its operations from top to bottom and to reinforce our compliance and underwriting programs,” adding that “WR Starkey Mortgage has emerged from this adversity as a better, stronger company.”