Ace Mortgage Funding, LLC - Retail, Net Branch Operation

Update - 2008-11-13: We'd heard it was coming, and now confirmed: Ace Mortgage Funding LLC filed for Chapter 7 Bankruptcy on 2008-11-05, claiming assets and liabilites each between $1 and $10 million with creditors numbering between 1,000 to 5,000. While the list of 20 largest creditors as of initial filing was mostly comprised of marketing (leads) firms, credit report service providers and lease holders with claims ranging from $163 down to $28 thousand dollars, the complete list filed two days later was 360 pages long. Income data reported reflects a loss of $30.5 million for 2007 per audited financials, and $11.4 million in the red for 2008. View all sections of the complete list (pdf) by selecting from the following links: Part 1 (100pgs), Part 2 (100pgs), Part 3 (100pgs), and Part 4 (60pgs).

Ace Mortgage Funding, LLC shut down today, marking the end of a drawn-out process of layoffs and branch closures we've been following since June. Just a month ago, we were told AMF was down to about 400 LO's from previous highs of 800-900. Branch offices numbered 28 at peak, and many jobs with base pay had been eliminated over the past 12 months. "Close to 100 at corporate in Indianapolis, and 3 per branch" had been let go our source said. Another source we spoke with said there were probably between 25 and 30 operations staff remaining at the headquarters. The web site listed 15 offices remaining in June, each having anywhere from 30 to 40 LO's according to reports we've received.

One tipster told us Ace Mortgage Funding had "difficulties making transition from subprime 'superbroker' to FHA based 'competitive internet leads'." Previous yearly volume of about $3 billion was said to currently be down by half as much. One AE told us "They were funding about $100 – 125 Million per month from their branch operations."

Part and parcel of the company's demise, aside from the general market's downturn, may have been to do with the settlement of a lawsuit filed by former employees for unpaid overtime. According to one tipster:

"As it stands most of the offices are NOT profitable and it is widely felt with in the organization that thier days are numbered. They recently settled a lawsuit with former loan officers and processors; damages awarded were in excess of 5 Million dollars..."

Actual damages awarded were $4 million plus over $1.2 million in attorney fees. The case had been dragging on since July of 2005. There are two other civil actions pending against Ace Mortgage Funding, and several more that closed in recent months according to public records.

View the most recent Discussion of Ace Mortgage Funding on our forums, or post your comments below. As always, feel free to contact us with more details.