Connecticut regulators say they won’t issue a mortgage broker’s license to a company headed by a former executive of bankrupt subprime lender Mortgage Lenders Network USA.
The new company, InHome Capital LLC, filed an application with the state Department of Banking on May 16. In denying the application this week, Banking Commissioner Howard Pitkin said MLN had allegedly failed to close 1,500 loans it issued commitments for.
Pitkin also noted that the state Department of Labor is seeking an arrest warrant against a former MLN executive for allegedly failing to pay its employees wages totaling up to $3 million. The executive, MLN President Mitchell Heffernan, has asked a bankruptcy court to block the issuance of the arrest warrant (see Inman News story).
The Banking Commissioner also rejected InHome Capital’s application to register 21 loan originators, saying they must be associated with a licensed broker.
An employee who answered the phone at InHome Capital’s Middletown, Conn., office said nobody was available to comment on the decision. The company’s Web site says InHome’s management team has an average of 20 years’ industry experience, and that the business is “affiliated with some of the largest lenders in the country.”
In the resume he submitted to state regulators, InHome managing member Randal S. Roberge cited his experience as MLN’s chief financial officer. Roberge said MLN originated more than $10 billion in mortgage loans a year, and maintained a servicing portfolio exceeding $15 billion and 100,000 accounts.
MLN shut down its wholesale lending division on Dec. 29 after losing access to financing, and filed for Chapter 11 bankruptcy protection on Feb. 5. About 1,800 employees eventually lost their jobs.
In a letter to Roberge denying InHome’s application for a mortgage broker’s license, Pitkin said that with the allegations against MLN unresolved, “I am unable to find at this time that you, as the member of senior management responsible for the legal, compliance and finance functions at MLN, possess the financial responsibility, character, reputation, integrity and general fitness such as to warrant belief that the business of (InHome Capital) will be operated soundly and efficiently and that issuing a license … will be in the public interest.”
