RMK Financial Corp., which also does business as Majestic Home Loan, has abruptly closed, according to posts on social media.
The Ontario, Calif.-based wholesale mortgage lender “had to close their business due to a legacy issue,” according to a comment posted on LinkedIn on Feb. 2 by Christine Bahnsen-Smith, a former account executive.
A similar comment was posted the next day by another former account executive, Michelle Turcich.
Neither former employee offered any information about the “legacy issue,” nor did they offer specifics about the closing.
Company officials could not be reached for comment.
According to Mobility Market Intelligence, RMK had seen a nearly 70% drop in total loan origination volume year over year as Nov. 1, 2022, including a nearly 84% drop in refinance volume.
The closing was first reported by National Mortgage News, which cited unnamed sources stating that most of the company’s staff was laid off via Skype in mid-January, and that the company closed Jan. 31. More than 60 employees were affected, the report said.
California labor department officials confirmed Monday that neither RMK nor Majestic had filed a notice under the federal Worker Adjustment and Retraining Notification Act, which requires at least 60-days notice of a facility closing or mass layoff.
While it is not known what legacy issue may have caused the company to close, the company was fined by the Consumer Financial Protection Bureau (CFPB) in April 2015 for deceptive mortgage advertising practices, including ads that led consumers to believe that the company was affiliated with the U.S. government..
At the time, the CFPB ordered RMK to end its illegal and deceptive practices and to pay a civil penalty of $250,000.
According to the CFPB, RMK mailed print advertisements to more than 100,000 consumers in several states, using the names and logos of the Department of Veterans Affairs (VA) and the Federal Housing Administration (FHA) in a way that falsely implied that the advertisements were sent by the VA or FHA, or that the company or the advertised mortgage products were endorsed or sponsored by the VA or FHA. RMK sent its advertisements to tens of thousands of U.S. military servicemembers and veterans, and other holders of VA-guaranteed mortgages, the CFPB said.
According to Majestic’s website, the company was licensed in 29 states and offered a full line of mortgage products. It also offered a “proprietary loan origination system” that provided “innovation, allowing mortgage brokers the ability to track loan status in real-time and work directly with in-house origination and underwriting teams dedicated to providing exceptional customer service while directing you through the origination process from start to finish.”