Last week Direct Finance Corp announced that it had purchased the assets of First Call Mortgage Inc just a few days after Massachusetts and New Hampshire state regulators ordered the company to stop originating loans. According to regulators, First Call Mortgage inflated borrowers incomes on loan applications, was lax with security surrounding customers personal information, and sold reverse mortgages without the proper Massachusetts license.
“This is a significant event for Direct Finance Corp. and reflects my continued confidence in the mortgage industry in spite of these difficult times,” says Alain Valles, president of Direct Finance and current president of the Massachusetts Mortgage Association.
The acquisition will help Direct Finance grow its reverse mortgage business which according to HUD’s Neighborhood Watch originated 98 HECMs in the past year. Combining that with the 146 HECMs First Call Mortgage originated without the proper licensing in Massachusetts will make them one of the largest reverse mortgage lenders in the state. Anyone else think its crazy that First Call Mortgage originated that many HECMs and wasn’t smart enough to get properly licensed?
Details of the transactions weren’t disclosed but odds are good Direct Finance got a great deal due to the company’s problems with state regulators. As part of the deal Direct Finance acquired furniture as well as the loan officers and support staff of First Call Mortgage.