Pacific Community Mortgage, Inc. - Gold Reverse, Inc. - Wholesale - Agency, Alt-A, Reverse

This implosion is actually two-fold, with Pacific Community Mortgage, Inc. (dba PCM, Inc.) being the primary subject as well as a back-add (they imploded in November of 2007). A former employee with PCM told us they believed multiple loan buybacks to have been the cause. The company then affected a name change and commenced operating as Gold Reverse, Inc., which has subsequently ceased operation.

Licensed since 1993, Pacific Community Mortgage, Inc. was a privately-owned wholesale mortgage banking operation headquartered in Anaheim, CA. CityTownInfo shows a total of five offices, two in CA and two others in NV and UT respectively. According to our source, PCM was averaging between $20 and $30 million per month, with peak volumes cresting around $50 to $60 million. Volume in 2006 averaged over $25 million per month.

After having funded Agency and Alt-A business for over 10 years, PCM entered the Reverse Mortgage arena in late 2006, offering FHA Home Equity Conversion Mortgages (HECM's). The reverse mortgage market was growing rapidly, and in May of 2007 PCM launched a proprietary jumbo reverse mortgage product. They had stopped doing "forward" loans at some point, and we're told reverse mortgage originations ranged between $10 and $20 million during the first few months after the new jumbo product was release.

Success with an exclusive line of reverse mortgage products was apparently short-lived for Pacific Community Mortgage. We heard the company changed some ownership positions, and was now privately owned by one family. On or about November 1st, 2007 the entire sales force was fired. The President, COO, CFC, U/W Manager and the Sales Manager all left. From one email we received around that time:

"They were an Alt A company until this year and then started doing reverse mortgages and the owner, Kurt Kingsolver will not return calls and simply refers people to his attorneys or ignores them."

Not long after Pacific Community Mortgage, Inc. shutdown, an email was sent out to brokers announcing their name change to Gold Reverse, Inc. and the relaunch of their proprietary jumbo reverse mortgage product, now called the "Gold Reverse JUMBO."

Gold Reverse, Inc. operated out of the old PCM headquarters in Anaheim, CA, specializing in Reverse mortgages - it had become their sole product offering. With a second office in Las Vegas, NV (per NV records), Gold Reverse was touted as having the "Most competitive jumbo available" per ReverseMortgageDaily when they suspended the program. Modeled after FHA's Home Equity Conversion Mortgage (HECM) program, Gold Reverse offered loans ranging from $150,000 to $2 million in CA, NV and FL. There were four AE's listed on the last rate sheet published on their web site.

Exact volume totals are not known, but a former employee we spoke with said Gold Reverse had funded roughly $20 million in Gold Jumbo loans for 2008 (an average of $2.5 million per month). A small portion of their volume included FHA HECM loans; a total of 97 HECM loans were originated between 8/1/05 and 8/30/08, 19 of them in 2008 per spreadsheet info downloaded from HUD's Neighborhood Watch. They did not service any loans.

The announcement said the shutdown was "temporary" but the secondary market's [lack of] appetite for non-Agency jumbo loans leaves little doubt this dry well may take some time to come back.

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