Homefront Mortgage Inc. - Net Branch Operation

On December 11, 2007, Homefront V.P. Thomas Fry put out an email stating "...Homefront Mortgage Inc. must discontinue all business operations on December 31st 2007." In fact, he went as far as to say if you couldn't get your loan funded by that date, "...we suggest you cancel those loans and open them with a new broker."

From a tip:

"This company was set up as a "membership" broker/banker net branch operation, they were charging the loan officers(auto pay credit cards ) a flat monthly fee of $399-799 depending on volume. At the peak they had over 250 "members" were licensed in 8 states, and funding aprox 75 mill (cannot confirm from Hmda due to lack of reporting/compliance."

We're sure the primary reasons for the shutdown are in the first sentence of Mr. Fry's letter:

"Due to the tremendous number of buy back requests on loans that our loan agent staff funded, and due to the overwhelming number of lawsuits as a result of loans that our loan agent staff funded, and due to the massive increase in our errors and omissions insurance coverage as a result of these issues, Homefront Mortgage Inc. must discontinue all business operations on December 31st 2007. "

This had to be one of the more disturbing "shutdown" letters we've ever seen! We made a phone call and spoke to Stuart Spencer, President. Needless to say, he felt the email was going to be kept a secret, and was not very pleased it was in our hands. In an about-face, he stated "we haven't decided what to do yet." He then proceeded with "Keep your f***king nose out of our business," carefully spelling out the 'F' word, and ended the phonecall with "...and f***k you too."

We checked the D.R.E. website on Dec. 12, and this firm listed 65 licensed salespeople. We checked three days later, that number was down to 57. One salesperson who contacted us was shopping around to place a file for a purchase that Homefront wouldn't do, even though it was a fully approved file! Numerous web sites for the company are not operating.

We've received complaints about overcharging 'member' fees on Credit Cards. We've heard rumors of a Bankruptcy. In an email to one creditor regarding payment, Mr. Fry states that "...will need to be handled by the trustee." From our discussion forum:

"Word of advice: cancel that particular card number and have your bank "watch" the acct if possible. I was unable to get anywhere for MONTHS until I was able to procure help from a outside brilliant banking person who assisted in getting the charges reversed (boy oh boy, thank goodness for him, Santa came early via my reversed charges (yes, that is a plural). I wouldn't want to be one of those that are thrown into a (possible BK) situation and out completely the unapproved charges."

In addition to the Dept. of Real Estate License, Homefront of Tustin CA also operated under a California Finance Lender License (#603C728) and an Escrow License (click here for corrected information).

As you know, we do our best to discover the number of people affected and dollar volumes. We're still working on this one, but here's what we have to start with from a tipster:

...other than I think it was pretty substantial. They were a net branch operation. Homefront was licensed in seven states. They were probably doing near the same amount of business as some of the other net branch operations like Dana Capital, probably a bit less though.

...I have a list of their branch offices. There are over 100 people on that list alone. But each person on this list could have a whole office of loan officers working under them so the numbers are actually much larger.

Before the dust has settled, it appears the Phoenix is rising again, although the name will most certainly change. Thomas Fry has put out an invitation for a breakfast meeting January 3rd where he says, "I invite you to come and meet the new partners for my new company."

He goes on to provide his personal cell number to the Homefront recipients to capture all the loans Homefront couldn't close by the 31st: "...I will get it placed and get you the info so you can get it in and locked."

There is an excellent discussion on this 'net branch' operation on the forum here. Please register and add your comments and experiences.

Correction: Homefront Escrow, Inc. of Irvine CA has no affiliation with Homefront Mortgage, Inc. They have no common shareholders, have never conducted business with Homefront Mortgage, Inc., nor does Homefront Escrow, Inc. know any of the principals of this company. Readers should not confuse Homefront Mortgage, Inc. with Homefront Escrow, Inc. of Irvine CA.