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Celebrity Home Loans Cuts 92% Of Its Staff

David Krechevsky
Feb 15, 2023

Illinois-based mortgage lender sent termination notices Monday.

Celebrity Home Loans, a retail lender based in Oakbrook Terrace, Ill., abruptly terminated about 92% of its staff this week, citing “unanticipated events.”

The company on Monday emailed a notice, a copy of which was obtained by NMP, explaining to each affected employee that “we must terminate your employment today … at 5 p.m. EST.” It also stated the company will be “unable to process our full payroll obligations on 2/16/2023. This means that you will not receive compensation during this pay period.”

The note continued, “We understand the impacts this may have on you and your family, and we deeply apologize.”

The total number of terminated employees is not known, because many members of Celebrity’s staff had been on furlough the previous week. 

Former employees say the company held a conference call on Feb. 7 with all employees to announce a deal with On Q Financial Inc. 

The former employees say, however, that it was not clear during that meeting whether On Q was acquiring Celebrity or announcing a merger of the two. The situation became even more confusing when company officials announced during the same conference call that about 75% of Celebrity’s staff were being furloughed at 5 p.m. that day, with no date set for being reinstated.

The former employee said no explanation was given for why the furloughs were necessary. A subsequent email stated that some employees were being furloughed immediately, while others would not be furloughed until Feb. 27.

Then came Monday’s email, which terminated the bulk of the remaining staff. The email suggested that employees “may qualify for a hardship withdrawal or loan from your 401k.”

The notice also said the company is “anticipating additional funds and believe[s] this is only a timing issue with our sincere intent to provide you all compensation that is owed to you over the next several weeks. We would recommend that you submit any outstanding healthcare claims as soon as possible to avoid any interruptions in coverage.”

Former employees say the payroll due to be paid on Thursday included not just salaries and wages but also commissions and bonuses for loans originated during the entire month of January.

Celebrity has approximately $5 million in loans still in its pipeline, the former employees said, adding they were not told what would happen to those loans.

According to Mobility Market Intelligence, Celebrity Home Loans reported $5.9 billion in total mortgage origination volume for the 12 months ended Dec. 1, 2022, a 21.5% decline from the same period a year earlier. That included a 64.2% decline in refinance volume, which was offset by a 22.9% increase in purchase volume. 

Officials with Celebrity Home Loans and On Q Financial did not respond to requests for comment.

In addition to the termination notice, employees also received a letter providing information about what to do with company equipment and other information “as you separate from the company.”

Among the items in that letter, it states that employees’ benefits “will no longer be provided by Celebrity upon the last day of the month you separated your employment,” and then offers the option to extend health benefits via COBRA coverage. The notice does not offer a severance package, instead providing information for contacting state unemployment services in Illinois.

The company did not file a notice with state labor officials in advance of the mass layoff, which generally is required by the federal Worker Adjustment and Retraining Notification Act. The law requires companies to give at least 60-days advance notice to employees of any mass layoff.

The terminations come six months after Celebrity closed Cypress Mortgage Capital, its four-year-old Utah-based correspondent lending division. 

Celebrity Home Loans had been operating in 48 states and has done $21 billion in home loans since 2006, according to its website.

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