Fidelity Home Mortgage Corp. - Wholesale - Agency, FHA/VA, Jumbo/Alt-A, Subprime

Update - 2008-04-03: We have been informed by company CEO Edward I. Simmons III that Fidelity Home Mortgage Corp. is back in business:

"Additionally, please note that our forecast to commence wholesale operations by April 2, 2008 was in deed accurate as we have resumed wholesale lending effective April 1."

In a full page Letter of Explanation available here (.doc), Fidelity explains they voluntarily decided "not to accept new applications until such time as all loans on our line had been funded/purchased." (read more)

Original Post - 2008-03-28: We learned that Fidelity Home Mortgage Corp. (FHMC) in Baltimore, MD has suspended their wholesale operations and are not funding any loans. In a 2008-03-03 announcement sent out to brokers, FHMC stated "Due to funding capacity issues, Fidelity Home Mortgage is temporarily suspending its wholesale operations." The memo goes on to say "We foresee a resumption of wholesale lending activities by April 2nd 2008."

Numerous brokers across the country have emailed to tell us FHMC continued to close loans despite not being able to fund them. One wrote "This company lost their warehouse line and has 108 loans they cannot fund ... and the most incredible fact they are still drawing docs on loans they cannot fund ..." Another said "The following FHA lender closed loans the end of February although they did not have the funds to fund the loans. They laid off their staff at that time and were not accepting new submissions. No one would answer the telephone at any extension." In Ohio (a "good funds" state), one broker told us they were just notified last night "they do not have the money or the investors at this time to fund loans." All told us they had signed deals that should have been funded by the end of February.

We received a copy of the following complaint that was sent to HUD:

"Please be advised that Fidelity Home Mortgage Corp., 1012 North Point Road, Baltimore, Maryland 21224 Tel# 888-354-3794 Tel# 443-503-0300 closed FHA loans the end of February 2008 and were unable to fund the loans. They suspended their operations and terminated or laid off their staff. They claimed their investors did not make funds avaliable or did they have any funds avaliable to fund loans. Do to their negligence they have jepordized the borrowers credit. Their FHA license should be suspended at this time and an investigation in to their loan policies and practices should be initiated. They obviously do not have funds or assets to sustain their operation. Please advise if you need additional information Received an up date from The Implode that the owner "Stan" Mavroulis and his son were indicted for tax fraud 2/28/08. This can be found on The Dept. of Justice Web site for documentation. Thank you for your assistance."

There's also the matter of a federal indictment filed against Owner Stilianos ("Stan") Mavroulis, his son Kyriakos ("Kirk") Mavroulis, and Accountant Joseph Poole for allegedly diverting over $1.9 million from the company for personal expenses. The U.S. Dept. of Justice has this press release on their web site.

According to their web site, FHMC offers FHA/VA, Agency, Jumbo/Alt-A and Subprime loan products in 44 states.

Please contact us if you can provide additional details about the layoffs and any other info for this company. See the forum discussion here