Hometown Lenders has cut staff and announced that it’s transitioning from retail to a broker model.
National Mortgage News reported that the company’s CEO announced the headcount reduction last Friday. Over 100 employees are said to have been let go across all departments. This has reduced the number of loan officers from 400 to 69 since June.
“It is in your best interest for us to terminate your employment effective immediately,” wrote company founder Billy Taylor in an email, per National Mortgage News.
Taylor described the market is “maddingly unpredictable.” He also told employees in an email that they won’t be paid on time. He cited a “pipeline sale” the company was counting on, which hasn’t been finalized.
Taylor hopes that brokering for a short time — a few weeks or months — will help the company pay off obligations to employees and survive.
Mid-last year, the company faced allegations of unpaid bills that included rent, vendor and AMC invoices, and health insurance. Some branch managers stepped in and paid the bills, but say they haven’t been reimbursed.
As a result, four lawsuits have been filed against the lender by former branch managers. One alleges that Hometown owes over $1 million in unreimbursed expenses and commissions. It says Hometown failed to pay final compensation, stopped payments on paychecks and did not reimburse “hundreds of thousands of dollars” in approved expenses.
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