A Florida firm that claims to be the biggest originator of VA loans, has already laid off nearly 400 employees this year and agreed in June to pay a more than $7 million civil money penalty is now throwing in the towel. The cost of regulatory compliance is being blamed for the decision to close.
Mortgage Investors Corp. reports that it has originated more than 350,000 loans guaranteed by the Department of Veterans Affairs for more than $43 billion during the past 15 years.
The St. Petersburg, Fla.-based firm was founded in Ohio in July 1938, according to records from the Nationwide Mortgage Licensing System
The NMLS data indicates that the lender — which also operates as AmeriGroup Mortgage Corp., Veterans Information Department and Veterans Home Loans — is licensed in 33 states and sponsors 282 mortgage loan officers.
On its website, Mortgage Investors says that it is an approved lender with the Federal Housing Administration, VA, Ginnie Mae, Fannie Mae and Freddie Mac.
But despite its impressive credentials, cracks in the company’s foundation began to surface in June when the Federal Trade Commission announced that it hit Mortgage Investors with a $7.5 million civil money penalty. According to the FTC, it received thousands of complaints about the firm — which allegedly made millions of illegal telephone calls to prospective borrowers and misled them about its products.
The federal consumer watchdog called the penalty “the largest fine the FTC has ever collected for allegedly violating Do Not Call provisions of the agency’s Telemarketing Sales Rule.”
Then, in July, Mortgage Investors advised the Florida Department of Economic Opportunity in a Worker Adjustment and Retraining Notification that it was laying off 380 employees. The layoffs were attributed to slowing refinance production.
On Monday, the state of Florida was advised in a WARN notice of another 256 layoffs that will complete by the end of next month.
Mortgage Investors Chairman Bill Edwards didn’t immediately respond to a request for a statement. But the Tampa Bay Times reported that a total of 476 people are being laid off, the company has stopped making new loans and a staff of 40 employees will remain on to wind down the business.
Edwards reportedly told the Times that the sole reason for the company’s demise is its inability to afford the cost of complying with the Dodd Frank Wall Street Reform and Consumer Protection Act of 2010.
