Current news for this company:
HCI Mortgage - Retail, Net Branch
More than likely Lake Ariel, Pennsylvania-based Home Consultants Inc. (dba HCI Mortgage) is or will soon be out-of-business, perhaps in part due to a guilty plea from owner Richard Harsche. We've received a number of recent tips that point to a complete shutdown of the company and its network of retail and net branch offices. HCI had both a retail and net branch operation doing business in 25+ states per their branch recruiting web site (view cached). CityTownInfo lists 22 offices, but several sources we spoke with indicated the company had between 70 and 80 remote offices at peak.
We attempted to contact all of those 22 offices, and were met most often with "disconnected" or "invalid" numbers. The few that were still active phone listings were no longer operating as HCI Mortgage branches (and acknowledged such). The main office is answered by an auto-attendant that offers no access to a "live operater." A former office in Mississippi is forwarded the same location, along with the toll-free number for an office in California. The primary web site is no longer working. The Reverse Mortgage department web site is still active, but the phone is answered with a recording that says "the office has been closed."
A tipster writing on behalf of himself (and others) sent us an inquiry back in March saying they "have not been paid on loans closed over two months ago." Then a few weeks ago, we were told that HCI Lending had stopped doing business in New York, closed all of its branches in the state and surrendered the licenses. This was confirmed by additional sources:
"HCI Mortgage surrendered its NY License today (2009-05-08) due to its inability pay fines and its quarterly assessment from 2008. All branches in NY were terminated effective today... the quarterly assessment from q-4 2008 and q-1 2009 was never paid, they were officially suspended on Oct 18th [of 2008] and continued to do business until now."
To date, we have not been able to verify this with the PA or NY State Banking Departments, who declined to comment or acknowledge any pending actions and do not report any such activity on their respective web sites. As of the posting date, HUD still shows 10 locations in MI, PA, NJ and NY on its FHA-approved lender list, and Home Consultants Inc. is still listed as an active "Mortgage Lender" in the database of Pennsylvania's Department of Banking.
Our research led us to an article in the Pennsylvania Scranton Times from mid-April. HCI owner Richard Harsche plead guilty to "two federal counts, both related to tax evasion." From the article -- Lying to IRS costs man at least $500G:
The IRS case (still pending sentencing) could mean up to 10 years imprisonment and over half a million dollars in fines, fees and penalties for Harsche, but it's not the only legal trouble that's plagued the company of late. HCI Mortgage was one of two lenders that reached a settlement with New York Attorney General Andrew Cuomo in January of 2009 for discriminatory practices. According to the NY AG's press release, HCI Mortgage and Consumer One Mortgage were ordered to pay $665,000 in restitution for "illegally charging Black and Latino customers higher brokerage fees."
The company averaged $15.5 million per month in originations for 2007. That represents a big drop from average monthly volume in 2006 which topped $21.4 million, with a significant portion (more than 36% that year) of total applications coming from African American and Hispanic borrowers.
Former branches and their managers are still owed substantial reserve funds according to reports we received, a familiar story we've seen play out with other defunct net branch operations. Sources we spoke with said they never expect to see the monies returned, and wouldn't be surprised to see a bankruptcy filing.
Please contact us if you can provide additional information (past or present) on this company.
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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.