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CTX Mortgage Company (Retail) - Retail



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Update - 2008-09-05: We have received the following communication from Centex spokesperson Eric Bruner:

  • CTX Mortgage is in the final stages of its transition plan for its network of retail branches. The transition plan for nearly all of these branches is effectively complete at this time, with most of them successfully transferred to other mortgage lending firms.

This was provided to us by way of confirmation that the retail offices were no longer a part of CTX Mortgage. The mortgage lending arm of their financial services division will continue to originate loans exclusively in support of the builder business. This listing will be removed from our Ailing/Watch list of lenders in a few business days.

Update - 2008-08-28: Recent tips that have come in set the end date for retail (non-builder) origination offices at the end of August. Some offices have already migrated to other companies, but an official statement has not been issued. Said one tipster, "they are closed as of September 1." Another writes:

"Its been my understanding that CTX Mortgage (retail) is discontinuing all loan originating in September. The only part of CTX that is slated to continue is working directly and exclusively for their home building unit, Centex Homes."

From their 2008 first quarter 10Q filing on August 5th:

"During July 2008, we made the decision to wind down the origination by Financial Services of mortgage loans for homes built by others as well as the refinancing of existing mortgages, which we refer to as Retail Loans. The wind-down will be executed in an orderly basis over the next several months. Financial Services, which currently operates approximately 80 retail branches, is expected to substantially complete the exit of its retail activity by the end of January 2009. We estimate pre-tax charges of approximately $20 to $30 million, which will be recognized primarily in the second and third quarters of fiscal year 2009, related to severance and contract termination costs and non-cash asset impairments in connection with the closure of our retail branches."

"Substantially complete... by the end of January 2009" gives the impression the winding down will go on for quite some time.

Update - 2008-07-18: The Dallas Business Journal reported Centex is "putting its network of mortgage retail offices up for sale:"

"Centex says the mortgage retail offices impacted by the decision are not tied to the company's internal loan origination program, which is coupled with the company's home building platform."

To reinforce information we've previously reported or been given, this applies to "street-level retail offices," not the "company's internal loan origination program, which is coupled with the company's home building platform."

We were unable to reach Centex for comment.

Update - 2008-07-09: In an email to employees today (view pdf) Prospect CEO Mark Filler announced they would not be buying CTX Mortgage:

"Today, I am sorry to inform you that Prospect Mortgage and Centex Homes have failed to reach mutually acceptable terms and we are no longer moving forward with the acquisition of the CTX Mortgage retail business. We truly respect CTX Mortgage and Centex's leadership and sincerely wish them the very best. While disappointing, this does not change Prospect Mortgage's commitment to growth or our continued financial backing from Sterling Partners."

This just in from a tipster: "CTX just notified their employees this morning via a conference call that they are shutting the doors." Right behind that, we got "Prospect is NOT buying CTX; they just the the word this morning and will be shut down by end of August." Another wrote "CTX is done and prospect deal is over."

It all sounds like CTX Mortgage is no more, but a source we spoke with said employees were not let go in that conference call, but rather "left to wonder how much longer" they would have their jobs.

An official statement (view pdf) was sent to us by Centex spokesperson Eric Bruner:

"Earlier this year, Centex announced plans to restructure its mortgage operations to focus exclusively on originating mortgages for homes built by Centex. Centex has been in discussions with Prospect Mortgage for several months to transfer its retail branches that focus on non-Centex Homes-related mortgages, and those discussions have ended without the companies reaching final agreement. In a conference call with employees this morning, Centex told employees that it intends to work with its retail branch teams to facilitate a smooth transition of its retail branches to other mortgage companies over time. In the meantime, CTX Mortgage continues to provide full support to its retail branches and loan officers, including accepting loan applications and offering rate locks. And for its builder-focused platform, CTX Mortgage will continue as a full-service lender."

That statement echoes the message from Centex CEO Tim Bartosh in an email (view pdf) sent to employees this morning:

"When we made the difficult decision to exit our retail mortgage operations several months ago, one of our principal considerations was to ensure the continuity of business for our retail team members. After making steady progress in our discussions with Prospect Mortgage, we were unable to overcome certain unexpected issues and we will not be moving ahead to complete that transaction...

For any branches that are unable to find a new mortgage partner, we'll work with the branch manager on an orderly wind-down and transition of our loan officers to new opportunities."

Bartosh's memo goes on to mention they will hold two "town hall" meetings tomorrow to address employee questions.

Centex shares (CTX), originally up at mid-day, started sliding by mid-afternoon.

We were not told how many CTX Mortgage employees will be affected by the offing of the retail mortgage branches. Please contact us if you have more detail.

Update - 2008-05-06: Multiple sources have told us that the CTX acquisition by Prospect is now complete. We have been told CTX Mortgage President and CEO Timothy Bartosh is now an employee of Prospect Mortgage, LLC, and Daniel Deaton, E.V.P. of National Retail Production, along with all others in the non-builder retail origination branches.

Others we spoke to indicated that the builder-specific origination branches were also part of the deal. It remains unclear if Kevin Gillespie, S.V.P. of Builder Loan Production remains behind to maintain that business channel some people say no. One tipster writes:

"SVP of Builder loan production remains an employe fo Centex Corp and will handle the ABA between Prospect Mortgage and Centex."

A third-party source familiar with the company we spoke with today indicated the builder lending branches (and Gillespie) were also now with Prospect.

Centex spokesperson Eric Bruner could neither confirm or deny any of this development, and sent us this statement:

"As we've said on several recent occasions, Centex is in discussions with Prospect concerning its retail mortgage operations. Those discussions are ongoing."

Update - 2008-03-20: This just in from an email:

"CTX will now be completely sold to Prospect Mortgage including all builder branches. They will operate under the CTX brand name for now but will now be financed through Prospect's lending facility and not Centex. This just announced through a conference call held earlier today about a month after reporting they would be selling only their retail division to Prospect."

Calls to CTX spokesperson Eric Bruner were not returned. Given the ambiguity surrounding Prospect's take over, we have reason to believe that CTX Mortgage will make an announcement soon that all business going forward will be under Prospect's operations.

Update -- 2008-02-07: From an email in today:

"CTX has been sold to Prospect. They had a meeting last night with their chairman's circle in which they flew in their top producers from all over the country to Dallas. At the meeting they introduced them to the big wigs with Prospect which is a division of Sterling Capital."

I'm sure there will be a certain amount of due diligence associated with this deal, so let's start by opening the first 'can-of-worms.' Other members of the media are watching CTX closely, and this initial report was sent to us:

"CTX in [city name] was bleeding loan officers, especially after they shut down their construction lending division. Borrowers who took out construction-to-permanent financing ("one time close" product) don't know it yet, but the permanent financing they already paid for with their origination fees is no longer available. When construction is complete they will be looking for financing (and probably filing lawsuits). The local regional manager called a meeting in January and promised loan officers that if they hung in it would be "Christmas in July" next week. Now they have been told that "Christmas" has been put off until March."

Part of the above statement may be paranoia, as we reported earlier CTX has forward commitment for $74.4 million against those perm loans with their credit facility (figures from their 3rd Quarter 10Q). But now there are two points of view, and only time will tell which scenario plays out.

Original Post -- 2008-02-06: Following in the wake of a dismal earnings release today by parent Centex Corp., employees learned the retail lending division, CTX Mortgage is in "discussions" to be sold to Prospect Mortgage Co., LLC, a unit of Sterling Capital Partners. (Revenues for the 2007 3rd quarter of $1.9 billion and a net loss of nearly $1 billion were reported.)

Back in July 2006, the Company sold "Home Equity" for $518.5 million in cash to be renamed Nationstar Mortgage, LLC. We posted Nationstar to the Imploded List 14 months later.

In a recent email communication to employees, Centex says:

"In recent months, we have communicated frequently to keep you abreast of the challenges facing our mortgage company and the financial services industry. Given the volatility of the market and the capital requirements needed to fund CTX volume, we reluctantly decided that the time had come to consider options for our retail mortgage platform. To better ensure that our retail branches receive the capital and other support they need to compete effectively in this new environment, we decided it was time to transfer these operations to a company devoted more exclusively to financial services. As we have communicated, many possibilities were explored in an effort to best position the CTX retail platform for future success."

A reader told us "Centex is supposedly still keeping CTX to do the loans from the builder new constr. sales." The following statement is taken from their 3rd Quarter 10Q:

"As of December 31, 2007, Financial Services is committed, under existing construction loan agreements, to fund $74.4 million in addition to the construction loan balance shown above. Financial Services has ceased origination of new construction loans; however, it will fulfill its existing funding commitments."

According to company spokesperson Eric Bruner, CTX Mortgage has 58 retail branch offices independent of the building finance operations. The number of employees in those locations was not immediately available. Bruner said they "were working toward a solution that will balance the company's (Centex) essential need for in-house mortgage services that support their mission of selling homes." He added that "no decision has been made" but acknowledged that they were involved "in discussions" regarding the retail unit. Per their web site, CTX Mortgage originated almost $14 billion of loans in fiscal 2007 with over 200 offices.

Contact us if you can provide additional information. Certainly a company worth watching.

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Bankergal at 14:05 2008-05-28 said:
Has anyone looked at Prospect Mortgage, the company who has purchased CTX? I Googled Prospect Mortgage and this is what I found:

"Prospect is a retail mortgage consolidation business focused on the prime market. Founded in 2007, Prospect's strategy is to purchase and consolidate approximately 25 smaller and mid-sized retail mortage banks in selected regions across the country with the goal of achieving a run-rate of approximately $20 billion in annual origination volume and generating $50 million in pre-tax income by year five. Prospect then intends to package and auction its loans on the secondary market to either government-sponsored entities or correspondent invesotrs. A part of Sterling Partners. "

Sure doesn't sound like a stable place to work for?? Permalink

Trojanbiz at 18:27 2008-06-16 said:
perhaps Wells or B of A....Sterling is an equity fund and those guys always have an exit strategy... they plan to build a retail platform and then sell it (five years down the road) Permalink
Alexius12 at 14:41 2008-08-01 said:
This company tried to steal employees from us via bogus free seminars sponsored by them, and then our LOs would get calls and e-mails trying to recruit them. I knew cockroaches would be gone eventually. These are good times for honest lenders and originators, as they clear and remove the criminals, thieves and crooks from our industry... Attorney General Offices and other Department of Consumer Protection agencies have gone after CTX once the plot was discovered on different states going back to 2004. The CT AG called CTX "a corporate parasite". There is a testimonial letter for you not posted on their website!!! LOL There were other Cos in our same position. Some had to spent huge amounts of money trying to stop CTX.

The lesson of the decade... it pays to remain honest and decent and do the right thing, even during tough periods such as this one where so many other crooks are lying and deceiving applicants due to slow business, whom believe me, will slowly but surely be gone. It is during these challenging times that the core values of decent and hard working loan officers nationwide, as well as high moral values and character develop and get shaped. I salute all my peers that share my views and try everyday to deliver good services to their clients, knowing that we can sleep well at night because we are not looking to swindle anyone, even during high temptation periods when incomes are substantially lower than what we are used to. Our beautiful country is being looted and sold by politicians, fund managers and bankers with no integrity and basic moral values. We are insolvent right now, as we all know too well from the great news we daily read on this site,, and tougher days are to come. We must all rise to the occasion and get rid of the parasites that put us in such vulnerable position at the mercy of our enemies or countries that despise us. We cannot blame anyone but ourselves if we continue to allow crooks to take over the economy of such great leading nation that gave us so many opportunities for so many decades.

Why would anyone want to buy such trash is beyond me? Countrywide and others should have already been a good lesson for future company buyers. Are buyers paying attention here?

Below are the mails I sent this "corporate parasite" starting in 2004.

To: "Mark McCauley" <> From: ALEX Subject: disguised seminars to recruit personnel Cc: ,,,,,,,,,,,,,,,,,,,, Lovina Worick <>, "Warren H. Myer" <>,,,,,,,, Sent: Thursday, November 04, 2004 1:07 PM

Mr. McCauley,

what kind of crook engages in the activities you do spamming us to recruit our loan officers behind our backs under false pretenses?

To attract loan officers to your seminars lured to them by the good name and reputation of its speakers, and then sneak behind the scenes trying to recruit the same loan officers based on the private information provided to the Originator magazine, has to be one of the scummiest acts I have seen in this profession in a while. You certainly are the kind of people that give our industry, or any other, a bad name and should be forbidden to operate in our industry and our planet. What is next on your list, attracting senior citizens to free breakfasts to rob them blind?

We were always under the impression that the Originator Magazine was a legitimate publication and that Centex was a trustworthy public company with some minimal moral values. Never would have I doubted their alleged good name and reputation in sharing our data and resources with them.

Your despicable actions have certainly changed our feelings and I sincerely hope that you are removed from your position for the good sake of the public and good business relations.

Mr. McCauley, you and your accomplices make me sick to my stomach.

Never contact anyone at any of my companies ever again.

Alex President and CEO

From: "Mark McCauley" <> To: <> Subject: Passion For Production Date: Thu, 4 Nov 2004 14:40:03 -0500

I hope this email finds you productive and profitable, during this changing market! Your name was referred to me, as a result of your interest in attending a Passion For Production Seminar, hosted by Barry Habib and CTX Mortgage. As you may know, Barry transferred to CTX Mortgage several months ago. Although our next seminar is scheduled for Atlanta, GA, later this month, I will keep your name and contact information on file for future seminars in The New England Area. If you're interested in talking about the many opportunities here at CTX Mortgage, please do not hesitate to contact me at the phone number of email address listed below. We have several management and loan officer positions available in our offices throughout MA and NH. I hope to hear from you soon! Best regards, Mark Mark McCauley CTX Mortgage Company Northern New England Area Manager 603-427-0001 X14 <>

Date: Mon, 6 Nov 2006 15:42:02 -0500 To:, From: ALEX Subject: CTX mortgage Dear Mr. Bartosh, it is funny how life has its ways in making sure the truth always prevails. The first lesson I learnt when coming over to this beautiful country 25 years ago was to always do the right thing, at any price. This philosophy has always paid me well. As you know, I wrote to you in 11/4/04, in regards to what I believe to be the illicit activities that had taken place while your firm was sponsoring seminars where our employees would later on be contacted in order to entice them to switch employment to CTX. Now we know that at a minimum, the Connecticut Attorney General Richard Blumenthal and Department of Consumer Protection Commissioner Edwin R. Rodriguez is suing CTX Mortgage Company for illegally raiding at least one competitor for employees and secret consumer lists. They have even gone further and called CTX "a corporate parasite". This incident is alleged to have taken place at the same time that ours did. To make things worse, we later on discovered that your Reading, Massachusetts office had virtually copied many of our old web pages in order to build theirs. I am attaching proof of the pages that were copied. If you look at the pictures attached showing the source of code on the pages you will find on our website all over them. Our pages were used to copy and steal graphics and content from our copyrighted pages. Just look at their mission statement page and compare it to ours.. They are identical, except that our mission statement was created in 1994! (attached) Now my options are to a) contact the CT Attorney General, the CT Commissioner of Department of Consumer Protection, as well as their Massachusetts peers, and share with them my experience with your firm, which is quite similar to what you are being sued for, or try to settle amicably with you. I understand that good businesses sometimes make mistakes, just from the sheer amount of people they employ. But I also believe in giving people and companies a second chance to be good and mean well to others. b) to wait and let Connecticut win the case and use that to my favor in a court of law teamed up with the Mass. AG's office. I believe that either of them would be catastrophic to your firm and therefore I am willing to listen to what you have to say, before rushing into actions. Very truly yours. Alex President Permalink

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Important: This company is on our list of lending operations that are apparently ailing or which we think are worth watching for any other reason. We make no representation or claim that any company on this list will or will not continue as a going concern, or change in any other way, adverse or beneficial. If you have concerns about this company, we suggest contacting them directly and/or checking with other reliable sources.