For the reverse mortgage division of Charlotte-based mortgage lender Cardinal Financial Company, the story is over before it had much of a chance to begin.
The division has ceased operations, according to multiple sources both inside and outside the company who spoke with RMD. The company decided to cease its reverse mortgage operations by September, according to one source. Approximately 30 employees have been displaced as a result.
Layoffs in the division began earlier this month, sources said. A Cardinal employee told RMD that the division’s staff were to be formally informed of the closure by human resources on Oct. 16. A separate employee explained that he was offered roughly one month of severance alongside the closure announcement, which some learned about on the afternoon of Oct. 15.
Fewer than five employees will remain beyond Oct. 16 to assist with the processing of loans currently in the pipeline, multiple former employees said.
According to one Cardinal employee, who requested anonymity for fear of retribution, the only reason given for the division’s closure was “market conditions.” The closure came as the division was working to build up its loan pipeline, he said.
“They did not give us a chance,” he explained. A third former employee added that “the rationale behind the ‘why’ doesn’t seem to be very clear.”
Cardinal only recently expanded and hired for its reverse mortgage division at the beginning of summer 2023.
As a result, Home Equity Conversion Mortgage (HECM) endorsement data for the company is limited. Going back to 2018, Cardinal endorsed only 20 HECMs, with six of those loans having originated in the 12 months ending this past August, according to data provided by Reverse Market Insight (RMI).
A pair of former employees estimated that the existing loan pipeline had roughly 20-30 loans remaining in process, which would be handled as long as they could be closed in 30 days. Reverse mortgage closings, on average, take between 30 and 60 days.
After submitting multiple requests for comment regarding the closure of the division, a company representative stated that “Cardinal does not comment on the rationale behind an individual’s employment status.”
No response was provided after RMD reiterated that it was seeking information about the division’s closure, and not about individual employees.