Freestand Financial - Mortgage Banker/Broker (mostly Subprime/Alt-A?)

A reader sent in a report that their previous employer, Freestand, was shutting down. We followed up and found that the company's retail and wholesale web sites were down (though commercial loans is still up). We're unsure at this point which divisions (or all) have specifically shuttered.

Via Google cache, we found the following list of loan types from the wholesale page: Refinancing, Interest Only Financing, 5/1 ARM Option, ARM Purchasing, and Debt Consolidation. The company also had the following description of itself posted:

Our History
Freestand Financial was first formed in 1994. Originally a small mortgage broker, the company has since grown by leaps and bounds. Currently Freestand Financial is a leading mortgage banker employing over 500 people with many branch offices throughout the southwest. We believe the reason Freestand Financial has been able to grow by leaps and bounds is our reputation in the mortgage world, particularly to our clients. We are sure that you will recognize our attention to detail and to your needs. That is what sets us apart from any other mortgage banker. Our corporate headquarters is located at 3200 N. Central Ave. Suite #2450, Phoenix, AZ 85012.

Solutions for Every Type of Homeowner
We are specialists in Purchases, Refinances, Home Equity loans, including lines of credit, no equity loans, Investment property purchases/refinances, multi-unit property refinances/purchases, less then perfect credit purchases/refinances, bankruptcy and foreclosures, and private money loans. So whether you are buying your first home, upgrading to your dream home, or investing in the hottest real estate market in the country, we have the knowledge to make it all come together.

Our Goal
Freestand Financial's goal is to build and maintain our business based on referrals of past clients, business associates, friends, family members, and others who seek a company that offers first class service and an ongoing commitment to excellence. We value our reputation in the mortgage world and do everything to keep our standards of commitment above the rest.

The reader and former employee had the following additional information regarding loan volume:

We cam from Freestand Financial, who closed its doors as of yesterday as well. We were just a small lender, relatively speaking, doing about 80 mil a month towards the end. We were pumping out about 270 mil a month in the heat of the boom. At the very end it dwindled to about 20 mil a month. I hope this helps you.

Anyone who can confirm or provide further information on Freestand, please email us.

Update, July 7th: A reader writes in with additional information on Freestand:

Freestand stopped banking operations earlier this year (Aprilish) and reverted to only brokering loans. They closed completely the end of June. The "commercial division" was spun off as a separate company about the same time they stopped banking operations (no apparent connection). Freestand also had an "insurance division" that was spun off as a separate company. Both the commercial and insurance groups are still operating.

It appears that part of their problem was a proposed merger they attempted with a local group of investors who were attempting to turn the mortgage bank into a "one stop financial shop" offering lending, insurance and investments. That was their primary focus for about six or seven months beginning last summer and ending earlier this year when the merger imploded for reasons never made public. Rumor has it that the fallout from the merger was one of the major issues causing Freestand's demise and that lawsuits are flying as a result. There is no confirmation of that from any of the principals involved in either company.

I was a loan officer with Freestand for about a year and dealt with the principals from time to time on their merger and the proposed business plan for establishing new branches. Feel free to contact me if you have questions.

Another writes (July 5th):

I was a current branch manager at Freestand Financial in Arizona.

Freestand did close their corporate office since last Friday but had informed all branches about it since the third week of May. They gave us enough time to close our loan. The retail and wholesale was shut down in the beginning of May and finally the broker shut down on Friday. We are still able to fund loans up to July 30th. The corporate staff opened a new small office with a different name.