Six months after it closed its correspondent lending department, the bread-and-butter retail channel of Illinois-based lending company Celebrity Home Loans is also at risk, several resources told HousingWire.
According to former workers and business partners, several Celebrity retail branches switched to another lender in December and January. Celebrity is also in talks to strike a deal with Arizona-based On Q Financial related to its remaining business. It is not known whether this is a merger or an acquisition. It is also not transparent which assets would be involved in the transaction.
The appeals also said Celebrity has imposed several rounds of layoffs over the past three weeks. Several former workers argued that they did not receive their last paychecks and severance packages. It is not yet clear whether the loan fees will be paid, a source said.
Representatives for Celebrity and On Q Financial did not respond to requests for comment.
A former corporate employee, speaking on condition of anonymity, said many other people have been fired from Celebrity’s side in recent weeks. Meanwhile, the same source said the sales had a chance to transfer to On Q Financial.
The worker was fired on Feb. 7 but said she hadn’t earned her last paycheck or severance pay, “which I was told I received. “But another former worker who was fired 3 weeks ago told HousingWire that he won the last paycheck and severance pay.
A third former Celebrity worker said that on Feb. 7 at 10:30 a. m. The company said it had “merged” with On Q Financial. Managers called workers at 4:30 p. m. to tell them they had been fired, he said. ” Just yesterday, they sent a separation letter and possibly wouldn’t pay us our last paycheck,” the former worker told HousingWire.
Another layoff circular took place on Monday, when a former worker said he received an email saying the company would not process all of its payroll obligations on Feb. 16.
The email, reviewed through HousingWire, says workers won’t receive any reimbursement in this pay period, but they can get benefits from a 401k retirement or loan for financial hardship.
“We expect more budget and this is just one scheduling factor with our honest goal of providing you with all the reimbursement you are owed in the coming weeks,” the email said.
Before news about layoffs and a deal with On Q, a lender that earned about $974 million in volume in 2022, Celebrity branches, which have their own DBAs, were switching to other retail loan lenders.
To the knowledge of the National Multistate Licensing System (NMLS), Neo Home Loans’ Celebrity-affiliated branches in California, Arizona, Colorado and Nevada switched to Minnesota-based loan lender Luminate Home Loans in December. Sources said Apex Home Loans and Robert Coomer Group also joined Celebrity’s Luminate.
As part of corporate financial holding company Celebrity Financial, Celebrity has reached $21 billion in mortgage loans in 48 states since 2006, according to its website.
Data from loan recruitment platform Modex, the company has generated $5. 5 billion over the past 12 months, across 312 active loan officers and 82 branches. Its volume has increased from $640 million in March 2022 to $230 million in December 2022, according to Modex.
Amid the market recession that began last year, Celebrity shut down its correspondent chain, most commonly affecting its Cypress Mortgage Capital division. Celebrity’s correspondent business featured unqualified mortgages, preferential jumbos and opposite mortgages.
On January 31, Celebrity announced its partnership with Fortuna to offer exclusive bridge financing to consumers for the transition from home to home. Under the program, the bridge loans and the new acquisition loan will be issued through the same Celebrity loan originator.
On Thursday, the FTC blocked the proposed merger between ICE and rival loan software firm Black Knight, the level for a legal battle.
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