State Banking Officials Probe Mortgage Lender
By Stephen Singer
State banking regulators are investigating the viability of a mortgage lender that has brokered billions of dollars in mortgages to people with poor credit histories, after it stopped funding loans and accepting new applications.
Middletown-based Mortgage Lenders Network USA laid off at least some of its employees this week, said James Heckman, spokesman for the state Department of Banking. Investigators are looking into the company to see “that they're still able to conduct their business,” he said.
Bank investigators acted after receiving tips, Heckman said. He would not disclose what information the tips conveyed, but said officials learned that the company laid off workers on Tuesday.
The company, which bills itself as one of the country's top subprime mortgage lenders, said this week that it is “currently exploring strategic alternatives” for its wholesale business lines, according to telephone recordings at least two of its wholesale lending offices.
A call was placed to Steven Olearcek, MLN's senior vice president and general counsel, seeking comment.
MLN, which opened in 1997, rapidly grew to employ more than 1,300 people, broke ground in May on a 300,000-square-foot complex in Wallingford. It said its 2006 goal was to produce more than $12.1 billion in loans.
Heckman said MLN has halted its wholesale business, which accounts for about 85 percent of the company's operations.
The state Department of Economic and Community Development has halted a proposed $4 million state assistance package for MLN until state officials “understand the impact” of the layoffs, said James Watson, a spokesman for the state agency.
The assistance package was to help MLN build the sprawling Wallingford complex that was projected to create 1,000 jobs, Watson said.
Agency officials have tried to contact MLN, but their calls have not been returned, he said.
State banking regulators are investigating the viability of a mortgage lender that has brokered billions of dollars in mortgages to people with poor credit histories, after it stopped funding loans and accepting new applications.
Middletown-based Mortgage Lenders Network USA laid off at least some of its employees this week, said James Heckman, spokesman for the state Department of Banking. Investigators are looking into the company to see “that they're still able to conduct their business,” he said.
Bank investigators acted after receiving tips, Heckman said. He would not disclose what information the tips conveyed, but said officials learned that the company laid off workers on Tuesday.
The company, which bills itself as one of the country's top subprime mortgage lenders, said this week that it is “currently exploring strategic alternatives” for its wholesale business lines, according to telephone recordings at least two of its wholesale lending offices.
A call was placed to Steven Olearcek, MLN's senior vice president and general counsel, seeking comment.
MLN, which opened in 1997, rapidly grew to employ more than 1,300 people, broke ground in May on a 300,000-square-foot complex in Wallingford. It said its 2006 goal was to produce more than $12.1 billion in loans.
Heckman said MLN has halted its wholesale business, which accounts for about 85 percent of the company's operations.
The state Department of Economic and Community Development has halted a proposed $4 million state assistance package for MLN until state officials “understand the impact” of the layoffs, said James Watson, a spokesman for the state agency.
The assistance package was to help MLN build the sprawling Wallingford complex that was projected to create 1,000 jobs, Watson said.
Agency officials have tried to contact MLN, but their calls have not been returned, he said.
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